Strategic Management -1

Assignment -2 Group-1
Walmart Stores Discount Operations
Srishti Kuldeep ABM10022; Ananya Dwivedi ABM11025; Mahesh Raja ABM11045;
Dwimalu Basumatary PGP29053; Disha Jaiswal PGP30255; Manish Meshram
PGP30259; Pragadeesh PGP30264; Ravi PGP30269; Shradha Panna PGP30280
1. Activity is the basic unit of competitive advantage. In light of this statement, identify the key
initiatives or activities or actions that you think have an implication on Wal-Marts competitive
advantage. For each activity, identify its implication over the cost and consumers WTP.
The key initiatives by Walmart could be broadly categorized into these major segments:
Expansion
Started with rural Arkansas whereas competitors focused on densely
populated areas
Systematic expansion into towns whose populations were between 5000 and
25000 which was not served by any Walmart competitors and gradually
moved into more contested towns
Gradual increase in the average size of Walmart stores and decided to stay
out of locations that could not be expanded
Purchasing and Distribution
Merchandise requests came directly through in-store terminals to central
distribution system and didnt relied upon sales forecasts
Exercised strong bargaining power with vendors & never ordered more
than 1/5th of its volume from one vendor.
Two-step hub & spoke system- 80% of merchandise passed through this
distribution network.
Store Operations
Reaction time in adjusting inventories was superior than its competitors
Placed more emphasis on hard goods like hardware as compared to its
competitors
UPC Scanning was equipped in all Walmart stores at the point of sale
Marketing
Operated in price sensitive categories; products were marked lower as
compared to its competitors
Promotional strategy-operated on the philosophy of everyday low
prices;saved expenses on advertising
Heavy advertisement while entering into a new market and then dropping
back after establishing a presence
Used CAD-Computer Aided Design to understand consumer preference for a
particular store
Human Resource
Unionized workforce; Passing on half of shrinkage to the employees reduced
the shrinkage cost
Employee incentive programs including profit sharing & employee stock
purchase.
Administration

Supervision by regional Vice Presidents on a weekly basis; routined

approach
Active involvement of Sam Walton despite of Age constraint.
Diversification
Wholesale clubs-emphasis on soft goods, promotion by seasonal flyers.
Broader national presence than its competitors