Wal-Mart Is the Largest Retail

Wal-Mart is the largest retail chain in the United States and this virtually means that its distribution network is different from that of other retailers. Generically, retailers buy their merchandise from wholesalers and then sell the items to individual consumers. Wal-Mart however managed to construct an independent distribution system directly with the manufacturers of the merchandise. By eliminating the intermediary, the company was able to cut costs, and as such offer its products at lower retail prices, all to the satisfaction of the final consumer.

Another means in which Wal-Mart's distribution system varies from that of traditional retailers refers to the consumers to which the products are sold. From this standpoint, traditional retailers sell to individual consumers. Wal-Mart however sells to both individual consumers, as well as smaller size retailers. In other words, Wal-Mart can itself be perceived as a wholesaler.

The position of largest American retailer brought the company both praises as well as criticism. While it is blamed for paying low employee wages, it is praised for its cost cutting system and the ability to offer low retail prices. The company's logo is even focused on this business model of cost savings, which advices customers to "save money [and] live better" (Wal-Marft Website, 2009). This is virtually the primary means by which the company attracts new customers. Aside the low retail price -- generally the selling point -- the retailer also implements other strategies to capture the interest of the consumers.

An example of complementary strategy is that of the creation of exclusivist clubs. The direct benefit of these stores, Sam's Clubs, is that they sell commodities at lower retail prices. The underlying attraction is however the fact that penetration of this club is limited; and what is limited is often interesting and appealing as it gives a sense of specialty to the buyer.

Another means of attracting customers is that of promoting the American way of being, embodied in a great purchasing power revealed by the large amounts of goods that can be bought in the Wal-Mart stores. Additionally, the American sentiment is preserved through the Wal-Mart greetings and the cheerful staff.

A proven advantage Wal-Mart has over its competitors is the abundance of financial resources. Yet, it is the means in which the company invests this money that creates comparative advantages. Such a means is the sustained investment in Information Technology. Wal-Mart uses IT applications at all levels of corporate affairs with the stipulated aim of increasing operational efficiency. The technologies they use support better customer relations; improve inventory management; enhance customer safety; reduce the risks of theft or reduce the time for waiting in line at the cash register. And these are just a few of the technological applications at Wal-Mart.