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SWOT Analysis


Efficient supply chain l Logistic system

Efficient cross docking and inventory management
Service innovation and technology
Strong penetration strategies
Worlds largest private satellite communication system


Unionized and strict labor laws

Unable to adopt internationally
Poor public image


Globalization, growing middle class globally

Inorganic growth leading to consolidation


International trade blocks and zoning regulations

Terrorism and wars
Strong competition in Europe
Anti-comprehensive and anti-dumping laws

Value Chain Analysis

Wal-Mart takes care of all the activities internally except partially outsourcing its
logistics requirements. Its systems integration from inventory, to stores, to
headquarters to suppliers is the lifeline of its success. The core activity remains in
its bulk buying and inventory management which supports WalMarts competitive advantage of pricing and every element Shows traces of cost
leadership. Wal-Mart located, its discount stores around regional warehouses
allowing a streamlined and low cost physical distribution
Inbound Logistics

Wal-Marts primary activity of receiving inventory is planned right from the point of
which Wal-Mart is not involved with. Wal-Mart has integrated systems with key
suppliers which communicate in real time data with sales information and stock
status so it can replenished in time. Shipments are timed and slotted and planned in
an orchestral way.

Wal-Mart maintains a lean approach to inventory. Wal-Mart innovated a technique
of replenishment called the Cross-Docking where incoming goods are offloaded into
outgoingtrucks directly without stocking them even for a few hours. Most goods
pass through thewarehouses within a span of 48 hours, enabling minimum idle time
and lowering excessinventory possibilities. Most of the goods never touch the floor
of the warehouse, as goods arepassed on 24 miles length of conveyor belts between
incoming trucks to outgoing trucks.
Outbound Logistics
Goods are transferred within 48 hours of receipt from suppliers. The replenishments
are also
done twice weekly, which is double the industrys

Marketing and Sales

Wal-Mart maintains a simple and effective marketing strategy which it has managed
to replicate globally apart it being the focus of its strategy. The Every Day Low Price
(EDLP) is simple and eliminates unnecessary advertising trying to push sales, as
Wal-Mart has successfully sold the concept to the customers, that it sells its
products at the lowest prices,everyday. This is one of the most interesting attributes
of Wal-Mart.

Wal-Marts aggressive yet subtle People Greeters and in its own fashionable and proud way
Aggressive Hospitality are the foundations for Wal
MartS success in the highly competitive market.
Wal-Mart maintains its own fleet of 2000 plus trucks which have scheduled
deliveries between warehouses to stores minimizing delays and over reliance from
Human Resource Management
Wal-Mart is the only retailer to be in Fortunes 100 Best Places to Work. Wal Marts
empowerment of Associates is laudable with instances such as allowing its
Associates to get on the network and lower its prices, nationwide if its found to be
higher than its competitors, all this done without any consultation or permission
requests from superiors.
Technology Development
Wal-Marts technology and inventory management systems and software are better than the
best in the world and also the lifeline of the organization. Wal-Marts early
innovations and


experimentation apart from investments light-years ahead of its time into VSAT
capabilities have boosted its success
Wal-Marts satellite communication and electronic data interchange links all its
stores to over4000 suppliers creating the finest procurement co-ordinated scenario.
Wal-Mart integrates its supply chain management activities with key suppliers like
P&G with direct shipments from

P&Gs warehouses to WaL-Marts stores and warehousees. Wal-Mart inventory

management is so effective that over 70% of its merchandise is purchased and paid
for by customers, even before Wal-Mart has actually paid for the same to its
suppliers. Wal-Mart has outsourced a substantial activity to USSO enabling Wal-Mart
to maintain its logistics cost


Firms infrastructure

It serves over 100 million customers weekly worldwide

There are 1,035,000 associates and the company is Americans largest
private employer

Human Resources Management

The employees are encouraged to communicate openly, offer new ideas,take

risk, strive for excellence and have fun. Employees are getting competitive
wages and comprehensive benefits
In recruiting new associates the company begins a comprehensive
recruitment program in the community where the store is to identify
Recruitment programs are well publicized and convenient, providing an
opportunity for job applicants and the company to start getting acquainted
When new employees start at Wal-Mart they are presented to the two basic
rules of Wal-Mart. These are
1. The customer is always right
2. If the customer happens to be wrong, refer rule 1

Technology Development

Wal-Mart set up own satellite communication system in 1983

Wal-Mart uses Bar Code & RFID technologies, different processes like efficient
picking, receiving & proper inventory control of the product s along with easy
packing and counting of the inventories was ensured.
Electronic Data Interchange (EDI)- a computer to computer exchange of
business documents


Wal-Marts process of procurement involves reducing its purchasing cost as

far as possible so that it can offer best prices to its customers. The company
procures goods directly from the manufacturers, by passing all


The drivers are tracked regularly through Private Fleet Driver handbook
Wal-Mart uses a logistics technique called :Cross Docking
Wal-Mart today about 60% inbound freight (closer to 80% for their grocery

segment) is managed by suppliers.

The important of Wal-Mart logistics infrastructure was its fast and responsive

transportation system.
The distribution centers were serviced by more than 3500 company owned



Wal-Mart operations are comprised of three business segment

Discount Stores
Neighhbourhood Markets

Marketing and Sales

Employees wore blue vests to identify themselves

Aisles were wide
Apparel departments were carpeted in warm colours
A store employee followed customers to their cars to pick up their shopping

Customers was welcomed at the door by a people greeter, who gave
directions and struck up conversations


Opening hours at Wal-Mart generally range from 7 a.m to 11p.m six days a

week from 10 a.m to 8 p.m on Sunday.

All Wal-Mart stores maintan uniform prices except where lower prices are
necessary to meet local competition. Sales are primary on a self-service and
cash carry basis with the objective of maximizing sales volume and inventory

turnover while minimizing expenses.

Banks credit card programs, operates without recourse to the company, is

available in all stores

The replenishment system also helps the store adjust to customers demands.
The stores are organized the same way all over the world, so the customers
will recognized the stores wherever they go.