International Supply Chain: Wal-Mart Case Study

Topics: Vertical integration, Supply chain, Strategic management Pages: 4 (1235 words) Published: December 11, 2006
Before analyzing Wal-Mart's corporate strategy, it is important to decide what business it is in. For example, if Wal-Mart is in the business of selling consumer goods such as TV's, sheets, clothes, etc then it is pursuing a concentric strategy by entering the food business. However, this changes depending on how you analyze what business Wal-Mart is in. Wal-Mart is in the business of selling everything customers need in their everyday lives. This includes the consumer goods listed above as well as food-service items. Even still, Wal-Mart pursues multiple strategies. Concerning concentration, Wal-Mart continually finds more consumer goods to sell at its stores which can take money from competitors. Additionally, when Wal-Mart entered into the food market, it quickly consolidated and held to good, saleable products. Wal-Mart never forays too far into a market and only sells what will make it a profit. Lastly, an argument can be made that Wal-Mart is also pursuing a vertical integration strategy. Wal-Mart has developed its own name brand to sell products called Sam's Choice. This puts Wal-Mart into the business of making things like soda, cereal, and dog food. While they still don't grow their own crops or raise their own livestock, it is still a form of vertical integration. Also, Wal-Mart works heavily with its suppliers. This symbiotic relationship can be see as vertical integration due to the level at which Wal-Mart analyzes its suppliers and improves their manufacturing processes, etc. Wal-Mart definitely has the business strategy of Low Cost Leadership. They do nothing to really differentiate themselves from competitors and provide no-frills self-service stores that always provide the lowest prices. Wal-Mart has built enough clout with suppliers that they can dictate the prices and go in and change suppliers manufacturing processes in order to wring out more and more savings for the consumer. Everything that Wal-Mart...
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