Wal-Mart-retailindustrystrategyanalysis(沃尔玛战略分析).doc

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1、Wal-MartCompany ProfileWiththe continuous improvement oflife quality, peoplesdemand for retail industry is growing more and more, Thetraditionalretail industrycan not meetthe needs ofthe people, the traditionalretail is disappearing, chainsupermarkets andhypermarketsand othertypesare starting to dom

2、inate.At present,the retail companies that listed in the Top 500 global corporationshasmore than 50,the majority of whicharesupermarket chains andhypermarkets. Western developed countries experienced development and revolution for many years, the traditionalretaildepartment storesare facingincreasin

3、g tough challenges, which is being replaced by the mode of chain operation, Especially the transnationalchain operation whichisin arapid growing trendbecomingthe dominant operation mode in modernretail industry. Nowadays,The forefrontcompanies of retail industryin the world include:Wal-Mart of the U

4、nited States,Carrefourof France,the NetherlandsRoyalahold supermarket group,GermanysMetro, JapansIto-Yokadochain etc., all of them are rapidly expanding to be the leader in the international retail industry by means of chain operation without exception.Wal-Mart Stores, Inc.was establishedin 1962 by

5、the U.S.retail legendSamMr.Waltonin Arkansas. Afterfortyyears development,Wal-Mart hasbecome thelargest privateemployer andthe worlds largestretail chains enterprise. Currently, Wal-Marthas openedmore than8,000stores,having53brands,employsmore than 2.1 million staff,the number of customerswho visitW

6、al-Marts per week is about 200 million.The business of Wal-Mart has distributed in Europe, America,Asia.In 1991,Wal-Martsannual salesexceeded40 billion U.S. dollars,turned into one ofthe worlds major retailcompanies. According toMay 1994Fortunemagazine published inU.S.service industry classification

7、list,Wal-Martsannual sales wasup to$ 67.34 billionin 1993. Over the previous yearmore than 11.8 billion, and exceeded Sears which was thenumber onerankingin 1992, andranksthe nationstopretailers instead. Wal-Martssalescontinued growingin 1995,and createda world record inthe retail industry, achieved

8、annual sales of93.6 billion U.S. dollars, and rankedfourth in the ranking list of the largest U.S.companies in the Fortune magazine(95). In fact, Wal-Martsannual saleswas equivalent tothe sum ofall U.S.department stores, besides it still maintained astrongmomentum of development as yet.So far, Wal-M

9、art has 2,133 Wal-Mart stores, 469 Sams Clubs and 248 Wal-Mart shopping plaza, located in the United States, China, Mexico, Canada, United Kingdom, Puerto Rico, Brazil, Argentina, South Africa, Costa Rica, Guatemala, Honduras, El Salvador, Nicaragua and other 14 countries. Within just afew decades,i

10、tcreatedsuch a rapiddevelopment inthe retail industry, wehave to say it isamiracle in the retail industry.In 2003,Wal-Mart boarded the worlds most respectedcompanies list of theFortunemagazine andtopped. The well-knowninvestor WarrenBuffettalso votedit, even though hiscompany was also onthe list ofc

11、andidates. Hecommented: Wal-Martis theworlds largestcompany, butit is still keeping the same vitality as well as when the company started And thisfounder of the company SamWaltonis one of theworlds mostinfluentialEntrepreneurs. The academic and business press has chronicled the wide-ranging effects

12、of the mega-retailer over the past two decades (McCune, 1994; McGee and Peterson, 2000; Stone, 1993). Although there is growing evidence that Wal-Marts hold on retail may be slipping, it remains a competitive nightmare for many of its competitors, particularly small rivals in local markets (McWillia

13、ms, 2007a, 2007b). Strategic AnalysisWal-Mart was developed into the worlds largestretailer from asmall grocery in Bentonville, Arkansasof the United States. Wal-Martslow pricestrategyand supplier managementare both the important factors ofits rapid development.No matter in the theory field or the e

14、nterprise field, the cost reduction, information sharing, quick response to market,optimization of resources allocation and otherhighlights brought by the supply chain managementarestrongly attractingeveryonesattention.But for many reasons, Wal-Martis nowalso facingtremendous pressure and the great

15、challengefrom the competitors. Advantage of Wal-Mart StrategiesWal-Mart implements the way of low price everyday, wideselectionof goods,a higher proportion merchandise ofwell known brands, friendly andwelcomingstore environment for customers, loweroperating costs,well-trainedexpansion to the newgeog

16、raphicalmeaning market, And innovativemarketingand excellentafter-sales service guarantee. From the construction ofstorestosuppliers providing low-costgoods for Wal-Mart, and then throughhigh-speeddistribution systemdistributingto eachstore, which makesWal-Mart maintaininga costadvantage. And the co

17、st saved by Wal-Martwas transferred tothe store customers in the form oflower retailprices. preferring to rely on the maxim people respond to incentives. Prices are the most important incentives in a market economy, and Wal-Marts policy of Every Day Low Prices has been so effective that the consumer

18、 price index is overstated because of failure to account for Wal-Mart and other superstores (Hausman and Leibtag 2004).Disadvantage of Wal-Mart StrategiesThe advantage of information system is difficult brought into play. The advancedhighlyefficient informationsystem of Wal-Mart iswell respected by

19、the industry. Withitscommercialsatellites,Wal-Martsinformation systemsquickly and easily achieveda globalnetwork. Through this network,more than 4,000storesworldwidecould be inventoried about itsstocks, goods added, andsales within one hour. The close connection between the internal and external inf

20、ormation systems help Wal-Mart exchange goods sales,transportation and orders information with suppliers. So as to keep pace with the sales,orders and distribution of stores. Andat this stage,the business environmentin developing countriesboundsthe Wal-Martsadvantages.Not pay attention to the locali

21、zation of internal corporate management. Wal-Mart had tried to copy its consistent business model and cultural ideas in many countries, but often failed. The main problem is: the system can be re-established but the culture can not simply be copied. Because the construction of enterprise culture can

22、 not be achieved only by something written in the manual or having some meetings, corporate culture is a continuous deposit of business philosophy, values and ethics in the development process,it permeates into every employees mind. For example, to the ideological education of that “the customers ar

23、e always right, the performances of Wal-Mart employees may be different, thus,the corporate culture issues is the crux behind many of the phenomena in Wal-Mart management.Development opportunities for Wal-MartThroughout the development of the world retail industry in recent years, we can see a clear

24、 trend that the control ability of retailers to market is gradually increasing. Traditional view is that, throughout the course of commercial circulation,the retail industry is at the bottom of the sales chain,can only accept the manufacturers products passively,and subjected the limitations of manu

25、facturers. However, due to the progress of science and technology and social development, behavior of consumers has become more diversified and personalized, the initiative on buying behavior has been greatly strengthened,Therefore, it is getting more difficult for the manufacturers to grasp the req

26、uirements of consumers,however its relatively easy to grasp the changing needs for the retail industry which is closest to the consumers, and its more accurate and timely to grasp information than the manufacturers. In this way, retailers grasp and control market more effectively, to a certain exten

27、t, it determines the fate of the manufacturers. The rise of E-commerce, online shopping, mail order, direct marketing demonstrates this point.The external threats to Wal-Mart Pressure from exterior competition: Although Wal-Mart remains the leading enterprise in American retail industry, it still fa

28、ces aggressive threats posed by some strong competitors like Target,Sears,and Kmart. In particular, Target, the second largest discount store of America, is growing far more rapidly than Wal-Mart. In 2005, sales of Wal-Mart Stores Inc. increased by 3.6%, while sales growth in the same stores of its

29、rival Target reached 5.6%. And Targets sales is predicted to achieve further growth.Now Target owns 1400 branches in America, whose sales reached $53billion in 2005. The key to Targets success is their small and fashionable layout and goods which have successfully attracted more high-income customer

30、s.Target is mainly aimed to meet the demands of young but relatively rich customers. Its chain stores are focusing on brand designers, and combining low prices in big supermaket with large numbers of designing elements, and attracting customers hoping to gain taste with cheap clothes by remarkable a

31、dvertisements and famous clothing designer like Isaac Mizrahi. Meanwhile, Wal-Mart has to confront the criticism from manufacturers who have contradictory attitude toward Wal-Mart, because they cannot go without Wal-Marts big distribution capacity and also cannot bear the squeezed prices.SWOT Analys

32、is of Wal-Marts strategies Strengths (S)- Wal-Mart is a famous retail brands, it is well known by its value for money, variety and one stop shopping. Weakness (W) - Although Wal-Mart has a leading IT technology, but because of its stores are distributed in all over the world, this span will lead to

33、not strong enough controlling force in certain aspects of it.and the differences of corporate culture brought some problems to the development of Wal-Mart. Opportunities (O )- Demands on Retailing are snowballing in the market,this is a good chance for Wal-Mart,Wal-Mart can cooperate with other inte

34、rnational retailers by means of taking over,merger or strategic alliances,specializing in the certain market of europe and greater China region. Threats (T) - Wal-Mart is the target of all competitors to catch up ,and it will face the threat of many competitors, meanwhile Wal-Marts low price strateg

35、y has caused a lot of resentment and condemnation from the manufacturers.Future development strategies for Wal-Mart1. Sticking to the strategy of “low price Basker (2005) finds that Wal-Mart reduces prices in the short run by 1.5% to 3%, but the effect grows by as much as a factor of 4 as we move in

36、to the long run. Wal-Mart is the worlds biggest business company with $360 billion annual turnover, and more than 5500 affiliated agencies globally. Managing such a big organization requires a unified concept and guidelines, otherwise the company will sink into a mess and disorder.So “low price beco

37、mes Wal-Marts goal and banner, because cheap prices are permenantly attractive to consumers. Compared with the same goods in other local stores, the prices of those in Wal-mart is 20%-30% lower than general markets.Its goods are the most fashionable brands with high quality, through high-volume, lar

38、ge-scale purchasing lower the purchase price, then sell in prices obviously lower than the local markets, in order to make a greater sensational effect and promote the sales of other commodities. It is known as low-cost promotional strategies for key commodities, which can make the price of the good

39、s give a very low price impression in consumers mind. Hausman and Leibtag ( 2005) argue that the consumer price index is systematically overestimated because the Bureau of Labor Statistics does not adequately account for the impact of Wal-Mart and other Big-Box retailers in its calculation of the in

40、dex. Hausman and Leibtag (2005) also argue that the benefits from Big-Box retail flow primarily to low-income households.2. Improving internal managementTo embody the advantages on scale and efficiency in merchandize retailing, it is essential to have a support on computer technology, an innovation

41、on marketing conception, strategy, tactics, and element. It is also indispensible for construction of a new mode on human resource management. Companies with favorable structures offer the greatest opportunity for firm profitability (Bain, 1968). It all boils down to business management talent with

42、high quality. A reform and optimizing strength on management within the corporate is to act upon a transverse integration, to strengthen managements on logistics and office departments. Localization on internal management is required to strengthen because countries vary from each of the different co

43、rporate cultures. To be a worldwide multinational, it must not be taken in a universal way of running a business. Wal-Mart should improve its way of running a company in a combination of a local custom. Wal-Mart should allow its subsidiaries to develop each of the different corporate culture under a

44、 monitoring and management of headquarter. Only with this will Wal-Marts subsidiaries benefit from their best development.3. Enlarging the market positionThe expansion develops on consumer market in countries. Wal-Marts consumer market expands. Wal-Mart is able to offer not only fair-price products

45、to low ends but also fashionables to high ends who do not belong to Wal-Marts target customer. This will help to increase Wal-Marts revenue. At the same time, wal-mart need ongoing innovation, only innovation can attract new customers. Florida (2004) argues that the creative class essential to job g

46、rowth and economic dynamism in the twenty-first century is attracted to a vibrant arts scene. 4. Working with strong suppliersSuppliers are participation to a corporate supply chain formation, which brings an indispensable impact on how well a business is run. A key point on supply chain management

47、is to establish strategic partnership with suppliers in a harmony, so Wal-Mart is always capable of maintaining a lasting stable low-price resource. These products, in the meantime, do not lead to an inferior quality because of a low price, thanks to Wal-Marts involvement on helping reduce productio

48、n cost. This way Wal-Mart continues strength on her capacity on competition because working with strong suppliers who are able to guarantee quality while remaining a price advantage.Strategy formulationProfessor MichaelPorter of Harvard University is a typical representative of business strategy at the traditional definition. He believes that strategy is a combination of some goals the company fighting for and the ways to achieve the goals the company seeking(1980). Porters definition summarizes the general understanding of business strat