I chose to research and look into Walmarr‘s supply chain management and its systems within the context of business strategy. Who is Walmart? Walmart currently has around 13 million associates in the United States. They also have around 11,000 stores worldwide and are opening more every single day, At the end of the fiscal year in January of 2014, Walmart had a net sales value of $473 billion. Primary Customers Walmart is widely known for its slogan “Save Money. Live Better.” I think that this speaks well for its customer base, as the majority of customers are looking for the best possible prices possible, and the majority of them take advantage of Walmart’s policies such as price matching, couponing, and its everyday low prices.
Walmart used to be very adamant that its customers preferred the huge stores with tons of product choices that they could choose from. However, they now are targeting customers that are looking for the quickest possible way to get in and get out with the things that they need with having a good experience at the same time and the same low prices as the bigger Walmart stores.
How is Walmart Different? Walmart is by far the one of the most controversial and biggest names in the grocery industry I think that Walmart has differentiated itself from its competition by always being up to date on all the information and how their demographics are changing and shifting. For example, Walmart had self-checkout lines way before most of its competitors did, because they noticed that the customer base was starting to trend more in the direction of wanting to get in and get out of the grocery stores faster.
I think that by keeping up with what customers are wanting and providing incentives for customers to shop there, such as its price matching policies, there is really no serious match for Walmart in competition, Above-the-Line vs. Below-the-Line I think that Walmart has a great grasp of how to utilize its supply chain management system to support above the-line initiatives.
I cannot turn on the TV and not see a Walmart commercial playing every day I feel that Walmart also uses its supply chain management system to support the below-the-line initiatives as well. For example, Walmart brings in huge celebrities monthly to its stores to advertise its lines of products, and there‘s always the Walmart Shareholders Meeting, which also brings in big-name performers for its shareholders to enjoy. I think that they have correctly utilized their SCMs for both above-the-line and below-the line promotions, Porter’s Five Forces Model and Value Chain Walmart has an interesting situation when it comes to Porter’s Five Forces Model in regard to suppliers. Walmart gets everything from its suppliers and also purchases huge quantities of products from those suppliers, Individual buyers have little to zero pressure on Walmart as a whole.
To reduce supplier power, Walmart would just simply switch suppliers, as it is probably relatively easy, and cheap, and they can just switch out different products since they offer so many choices, that customers would probably not notice the change too much. In regards to substitute products or services, Walmart has the absolute advantage in cost over all other competitors, since it offers price matching to all of its competitor’s prices. I think that there are very few new entrants to the grocery industry since Walmart is pretty well-known in the industry and they have lots of resources to fend off any serious competition. I think that this could lead to saying that Walmart is using its support chain management more in a support value process instead of a primary value process. They use SCM to do more of procurement, developing new technology, HR management, and infrastructure than activities in primary value processes.