WALMART STORES: “EVERY DAY LOW PRICES” IN CHINA Question 1 Why is Wal-Mart successful in the US? * Focus on price and service – Providing the best quality goods at the lowest price in a friendly environment. Wal-Mart is well-known for selling brand name products for less. Moreover, providing great customer service, showing respect for the individual and striving for excellence become its organizational culture, which has been carried out through the company’s history and been followed by employers as well as employees, no matter what the location is. * Successful marketing to attract customers.
I think Supermarkets have a minimal competitive impact because they try to reach a different target market, even though Supermarkets and the wholesale club industry both carry similar products. As customers, we are always looking for the best deal and price, and the demand in this industry is very high. The ability to provide better prices hinges on the company’s relationship with its suppliers. 2. Do all three warehouse club rivals—Costco, Sam’s, and BJ’s Wholesale—have highly similar strategies?
They have a good variety of products to shop for. Wal-Mart has many competitors, but one of the strengths that the company has the ability to lower the prices for their customers need. Wal-Mart can be consider a unique store because of one special strategy that they have. The strategy consists of comparing the prices of the other stores, if the other store has an ad of a lower price than Wal-Mart, then they will give it to them to the same price. Many costumers is one of the plus that they give to Wal-Mart because this means that they don’t have to go store by store catching all the specials that they have.
What is Wal-Mart’s distinctive capability? Wal-Mart has the goal of providing "quality goods at low prices, responsible manufacturing, and opportunities for growth. Due to their expansive nature and broad customer base, they are able to provide a large discount on many of their products. They are also the leading employer in the United States of African Americans, Hispanics, women and senior citizens. What business are they In?
In this particular case we can observe how low labor cost contributes to obtain low import tariffs therefore leads to cheaper products. Walmart’s success in Mexico was definitely possible because of the NAFTA implementation. Question 2 NAFTA benefits every company that is willing to operate abroad. This agreement solved some difficulties but Wal-Mart`s inherent competitive strategy was effective in the Mexican Market. As we all know Wal-Mart`s strategy to win against its competitors is its offered prices.
Porter's Five Forces Model Bargaining Power of Customers: LOW Wal-mart faces the weak intensity of the bargaining power of buyers in the retail industry environment. The large population of buyers makes it difficult for them to impose significant pressure on retail firms. • Customers usually make small purchases • A large number of customers • Wal-Mart;s main customers are individuals • Consumer could shop at a competitor who offers comparable products at comparable prices, but the convenience is lost. Bargaining Power of Suppliers: LOW The bargaining power of suppliers has weak intensity in the retail industry environment. There are many suppliers in the retail industry.
Comparison of Communication Style Wal-Mart v/s Sears Both, Wal-Mart and Sears retail outlets have embraced low price strategy to motivate customers to buy their goods. These two retail outlets have many marketing strategies in common. They also have some different approaches when dealing with customers of diverse culture. Wal-Mart aims to sell specialized items to its customers. In regard to this, Wal-Mart management stocks items that they feel would sell out faster during specific times.
Wal-Mart is basically a store where someone can buy everything unlike K-Mart. Second, the affordability and quality of goods at each store are different. At Wal-Mart items can be found for a lesser price than K-Mart. Wal-Mart will match the price if an item is found for less at another store, but K-Mart does not do this. Usually items at K-Mart are usually a couple of dollars higher than Wal-Mart.
Strengths Wal-Mart has a profusion of strengths which is apparent due to its outstanding success. This retailer is the largest in the United States and a place to get a respectable job without a college degree. Criticisms have been made how Wal-Mart pays low wages, but this still gives people jobs and being employed is important in this economy. Wal-Mart beats the competition by saving families hundreds if not over a thousand dollars a year with their aggressively low pricing strategy. Slashing prices as they have over the many years lures in consumers to bring in more sales.
The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Wal-Mart’s prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share. Low prices, advanced data management and extremely motivated employees (“10 ft rule”, “sundown rule”) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. It’s worth mentioning that Wal-Mart acquired volume through a careful consideration of locations, away from competition.