Supply and Distribution Strategy
With the unique supply chain and the distribution strategy Wal-Mart fetch the products quickly from suppliers and partners and transfers the products from the dock to stores and customers in 72 hours. Wal-Mart requires only 10% footage area of its stores and warehouse for storing for inventory, where as competitors require 30 to 35% footage area. New firms and stores can replicate this model for managing inventory, distribution and take the advantage of specialized trade associations to create of group of local companies. And use the association as a platform to benchmark and share best practices.
Market Segmentation
Market segmentation is a fundamental aspect of Wal-Mart success. Wal-Mart has entered into an era of “store-of-the-community customization” an attempt to capture a large market share in specific segments. And segregated customers into five categories: rural, high-income, African-Americans, baby-boomers and Latinos. Research shows that Wal-Mart is no less costly than Kmart or Target. It has a successful marketing strategy which emphasize low cost. Due to this, customers assume that they get products at lowest prices in Wal-Mart. It's a strategy that new firms can adopt which will help to earn higher returns.
SWOT Analysis:
Retailers should re-define the function they serve. One way to compete with giant retailer like Wal-Mart is to offer goods and services that Wal-Mart does not provide. The key factor to compete and survive against Wal-Mart is to focus on business into a function where retailer can control strengths in the local market by implementing sustainable techniques.
Strengths: Effective supply chain management, Targeted marketing, Innovative products and technology.
Weakness: Labor laws, Public image.
Opportunity: Globalization, E-business, Purchasing power.
Threats: Anti competitive practices, Competitors, International laws.
References:
Aaker, D. A. (2008). Strategic Market Management. New Jersey: John Wiley & Sons, Inc.
Clark, S. (2000`, December). How to compete with Wal-Mart. Washington Business Journal .
Dixon, N. ( 2006 , August). Wal-Mart Unveils Community Store Design Strategy. Retrieved october 23, 2010, from http://www.uwex.edu/ces/cced/downtowns/ltb/lets/LTB0806.pdf
Selko, A. (2007, May). Can Your Company Compete Against Wal-Mart. Retrieved october 23, 2010, from http://www.industryweek.com/articles/can_your_company_compete_against_wal-mart_14058.aspx