Planning concepts and applications

Business Management

Strategies and Courses of Action at Wal-Mart

Wal-Mart Stores has revolutionized retailing with the processes, practices, systems and retail techniques they have developed and now consistently rely on to run a profitable enterprise. The company's strengths in branding, information technologies including Radio Frequency Identification (RFID), logistics and supply chain management, and retailing are all discussed in this paper. All of these factors combine and provide Wal-Mart with leverage over their suppliers and significant buyer power globally.

Analyzing Wal-Mart's Strengths

Branding and Price Leadership

The low price leadership branding and messaging Wal-Mart has successfully identified itself with is supported by the internal process efficiencies for their supply chain management and logistics processes. Wal-Mart consistently promises and delivers on low prices, which has made large segments of middle class Americans very brand loyal (Arora, Stoner, 2009). This loyalty is so strong in fact the sociologists indicate many middle class Americans see Wal-Mart as essential for their ability to live between paychecks and make their money last longer (Gereffi, Christian, 2009). This is powerful branding because there is a perception that the company's value is integral to their customers' ability to meet the needs of their families.

Information Technologies and RFID

Wal-Mart was one of the first retailers to realize the value of investments in information technologies and systems to make their company more effective. The reliance on information systems today is so extensive that the satellite links the company has in place from 1997 (DeSanta, 1998) deliver pricing and shipment data to the headquarters in Bentonville, Arkansas for nightly analysis for meetings the next morning. The collection of these technologies is also exceptionally valuable during the holiday season when the company regularly engages in competition with Target Stores on consumer electronics and toys.

In addition to these technologies, Wal-Mart has been an early adopted of Radio Frequency Identification (RFID) technologies which can significantly increase efficiency in logistics and warehouse applications (Krotov, Junglas, 2008).

Logistics and Supply Chain Management

Perhaps the best evidence of Wal-Mart having exceptional insight into managing logistics and supply chains was when Hurricane Katrina hit New Orleans earlier this decade, the Federal Emergency Management Administration (FEMA) called on Wal-Mart to get supplies into the city immediately (Dobbs, 2007). In fact Wal-Mart delivered thousands of pounds of food and essential items three days before FEMA was able to logistically gather supplies and air ship them in. Logistics and supply chain management is what Wal-Mart has as a core strength, and have consistently found new processes to accelerate inventory turns, reduce waste of time and money in the process (Dobbs, 2007). This efficiency of the Wal-Mart supply chains and its ability to move millions of products into the hands of consumers weekly is what gives the company exceptional power over supplier relationships as well (Hansen, 2009).

Retailing

The unique strategies that Wal-Mart relies on for retailing emanate from their expertise in logistics and supply chain management, and the ability to manage pricing exceptionally well as a competitive strength (Appelbaum, Lichtenstein, 2006). The approach to retailing at Wal-Mart is more comparable to the end-point of a supply chain where the distribution center is actually the retail store. This is precisely the model that Wal-Mart relies on to gain process and cost efficiencies from its support and retail staff. It is common for retail staff to be called upon to assist with the unloading of tractor trailers during slow periods on the retail space floor.

Conclusion

The strengths Wal-Mart has in branding, information technologies including Radio Frequency Identification (RFID), logistics and supply chain management, and retailing all emanate from their ability to quickly translate market opportunities into supply chain execution strategies. Branding and retailing are the two most visible areas of their value chain network. The ability of the company to make and keep the commitment of delivering low prices every day is made possible by this process-centric expertise and efficiency they have developed over decades of effort.