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Wal*Mart
First established as a self-service discounting store in 1962 by Sam Walton
Formats:
Wal*Mart Warehouse Supercenter Hypermarket Close-out store
Wal*Mart
Major competitors: Kmart Target
Phenomenal success:
At the end of 1993: No.1 of the top 50 Discount Department store - Market value: 57.5 billion - Sales per square foot: $300 (the industry average is $210)
Everyday-low-prices
Business strategies
Product Place Price Promotion
Product:
Food
Stationery Automative
Home hardlines
Wal*Mart
Sporting goods
Place:
Small towns Rural areas
Price:
Always low prices-Always
Promotion:
Everyday-low-prices
- few promotion: - advertising expense: 1.5% of sales (while 2.1% for direct competitors)
1.
Changing Customer Demand Flexible shelf space allocation Private label lines 2. Changing prices Always low prices, always 3. Technological Change Heavy investment in information technology Innovative Strategy
Discount stores -> Supercenters
Wal*Marts Strategy
Low Cost Industry-wide Differentiation Differentiation
Cost Leadership
Single segment
Focus
LOW PRICE
Value Employees Most Customer-Oriented Efficient Operation Management
Partnership with suppliers eg P&G-Sharing information electronically Vendor-managed inventory systems eg Wrangler & GE
Efficient communication
Lower Cost
Lower Cost
High Productivity
Lower Cost
Customer -Oriented
No. 1 Boss the customer
People Greeter Satisfaction Guaranteed policy Sustainable?
Loyalty
low price
successful vendor relationship efficient communication network value employees most efficient operation management customer oriented
Low Price
in Hong Kong
Land rent
Promotion
in China
Land rent
Promotion
in China
compete with established competitors
In China
flat organization information sharing
payment system
programming
Motivation + incentive
Customer Orientation
In Hong Kong
In China provide subsidiary services customer = the boss
In Hong Kong
In China
1. Maintain and reinforce Wal-Marts core competitive advantages. 2. Growth Strategies: Technology: Join forces with a well-known Interactive Service Provider(e.g.AOL) to bridge the physical and virtual world.
Advantages:
(1) Global Promotion (2) Cost saving
(3) Customers Serving i) By setting up searching engine ii) By providing personal online services iii) Could listen to consumers opinions promptly (4) Facilitation on operation management
Conclusion:
1. Catch up the trend of e-commerce 2. Reinforce Wal*Marts core competitive advantages. 3. Adopt changes when necessary
THE END
Thank You!