Walmart case study

1) Describe Walmart value chain and analyze the retailers strength and
limitations to the system?
Walmart has gained much of its market share and customer growth by
passing on saving from the supply chain efficiencies
The company sources from many retailers but does not charge any
slotting fees to them for the shelf space
Walmart tends to skip all the middle men to bring the product directly
to their superstores or other franchise model
Strength:

Walmart can dictate the delivery schedule and inventory level for
suppliers
Gains full control of product design as supplier are forced to follow the
product specifications as per Walmarts requirements
Retail the goods at a much higher discount as compared to its
competitors
Limitations:

Exponential growth has caused Walmart to de-emphasize domestic market

Made in America as it unviable to the scale the company demands
The company has to face a lot of domestic resistance as it below low prices
drive out small retailers
Q2) Discuss the concerns proposed by critics that Walmart has become too large
and powerful?

Walmart is one of the largest companies in the world with $245 billion sales
last year, its $12 billion imports from China accounted for nearly 1/10 th of the
total U.S. imports in a year
The large scale of the company couple with its aggressive discount strategy
has been responsible for the extraordinarily low inflation in recent years
The company also is knows to have caused the sorry state of retail wages in
U.S. (The company pays USD 8.23 an hours or $13,861 which is below the
average federal poverty line for a family of three)
The company faces serious local backlash among competing retailer vendors,
organized labour, community activitst and cultural and political aggressive
Walmart also has ushered in a policing culture by selling only sanitized CDs,
music and magazines. The company demands company to sell clean in the
name of protecting the customers
Its huge buying power and efficiency has forced many local rivals to close, if
there is a local resistance the company is knows to pull strings to lobby the
government to pass a referendum
Q3)Evaluate Walmarts role as a cultural gatekeeper?
 The companys role as cultural gatekeeper role has narrowed the main
stream for entertainment offering while imparting to it a rightward tilt
The big companies have stopped complaining and have now bend backwards
to provide Walmart sanitized version of products (CDs, magazine, and rap
music)
While the company calls itself a first truly urban company it only listens to
customer complaints where product censoring is concerned not when the
people have an issue with opening of a new Walmart store
Q4) Is Walmart conducting adequate market sensing research concerning customer
preference and satisfaction?

The company uses no factual or statistical method to show why it chooses to

sensor only certain products while certain product continue to be sold (Other
Magazines vs. Rolling Stones) or Preven
The company does not in actual track how majority of its customers feel
about products in terms of required censorship
It takes decision in an ad-hoc manner to complaints lodged by a handful of
customers and outside group, which are usually but not always of the
conservative persuasion
Q5) Identify and analyze potential strategic threats that may impact Walmart?

Walmarts low pricing strategy has left all other retailers to scurry around to
find the lowest price points
The companys ambitious growth plans of opening more 1000 superstores
comes at a risk of finding sufficient manpower to run the stores
Its anti-union stand, labour lawsuits, and local protest could result in future
challenges
There are talks in the industry that if competitors do not like Walmart the best
strategy would be to be patient, as new business models will eventually come
in and grab market share