Many retail companies, including Walmart, are focusing on establishing themselves as electronic commerce retailers. Whether that is due to politics or cultural customs, Wal-Mart may not be able to maintain their volume purchasing power in all markets. Efficient and effective use of resources. Due to its size, Walmart can exercise its market power over suppliers by requiring lower prices from them.
By shipping from the store, the company also reduces product delivery time to the customer. No other direct competitor, except Amazonhas made it to the Forbes list of the top 50 most valuable brands. The competitive advantage of volume purchasing will be affected by the international location.
The company can also affect the competition by selling selected items at a loss, thus driving competition out of the market.
This allows Walmart to improve its stores and practices to better suit the customer. Large companies can offer luxurious stores and tailored customer service but all of that comes at a price; a price that CEO decided was an acceptable compromise in order to reduce prices.
The company did not report its total e-commerce sales forbut revealed that Walmart U. The company can identify better ways of performing tasks, managing stores and hiring new employees and can achieve huge gains by implementing these best practices in its vast network of stores.
Extremely well known brand name c. Lots of investment capital 2 How sustainable are those advantages? However if the brand name is in some way tainted, for example how their name has been hurt by the idea that they mistreat their employees then having the well known brand name can be detrimental to the business.
Volume purchasing power e. Large merchandise selection in its many physical stores helps it to develop e-commerce channel sales faster and with lower costs Retail sales in physical stores compared to e-commerce channels are slowing.
InWalmart increased its merchandise offerings to 75 million SKUs. Large variety of products and services b. Huge gains from implementing best practices. Market power over suppliers and competitors. They offer the lowest prices by cutting out the expenses that other retailers are known for.
Although Wal-Mart may have the best technology systems right now, this may not be the case in 5 years if they choose not to update their systems.
Although they do have an international brand name, it is necessary that Wal-Mart builds brand name recognition in new markets. Every expense should be followed with profitability, even business trips. Walmart treated very well and offered compensation packages and stock ownership.
Walmart was very aware of which products were selling more than others and was able to profit from that. There was no need for Walmart to build many costly fulfillment centers, the company converted many of its superstores to fulfillment centers instead.
The company can share its fixed costs over many products, which makes Walmart one of the cheapest places to shop. Although Wal-Mart has the capital to continue to stay abreast with the newest and best technology, continual implementation of these systems can be cumbersome even for a company as big as Wal-Mart.
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