Walmart

Walmart was founded by Sam Walton in the year 1962. He opened his first store in Rogers, Ark. On 31st
October 1969, the company was incorporated as Wal-Mart Stores. Key success factor was the guidance
of Sam. Presently they are operating in twenty-seven countries with more than 11,300 stores with 2.2
million employees, and have e-commerce stores under 58 banners. It is said that Walmart’s extreme
success could be attributed to its effective supply chain management. However, now Walmart is slowing
down its expansion to increase their online business.

Retail Industry is growing rapidly all around the world, and especially online retail business. There are
different facts given in the case-study, like the sales of US retail stores were $6 trillion in US, and out of
that $520 billion was of e-commerce, with Amazon having more than 40% market share in it.

This case also talks about the development of the supply chain of Walmart. Wal-Mart’s efficiency in
supply chain management was due to two key factors namely automated distribution center and the
computerized inventory system. This brought in minimizing a lot of time the later not only reduced the
checking out time but also recorded the transaction which is much needed to know envisage demand.
Demand forecast is a constant issue which could be a threat when not handled properly. This is due to
the fact that demand prediction is always inaccurate. Aggregation would be a remedy for this
unpredictable demand.

Walmart’s focus has always been to sell goods at a lower price to the customers. Walmart with its
power distribution system made quite innovative changes like reducing paper work, reduced its lead
time drastically, used bar codes to bill which recorded inventory levels and the access to the stock levels
served as the valuable data for management. The movements of products are systematic and
strategically aliened in a way that it reduces the most valuable time and cost and results in efficiency.
Wal-Mart had a very effective rather responsive and flexible distribution system to transport goods from
docks to stores.

In US Walmart started 3 different kinds of online stores, for different purposes, like selling the products
which already existed on physical stores, selling through 3 rd parties, and sell branded products. They also
acquired many other e-commerce stores, in different countries selling different niche products. These
steps had a very positive impact on their sales. They also increased their prices for niche customers. The
main idea of Walmart was to offer lowest prices, and target low-income families. On the other hand,
Amazon targeted high income customers. By coming in online retail, Walmart also increased their selling
prices. That’s what the CEO also said that they don’t just want to save money of people, but also save
their time.

Walmart had a better infrastructure than Amazon, and their big suppliers also opened their offices for
dealing their sales through Walmart. They also allowed the suppliers to sell their private-label products
which also resulted in high margins for Walmart.

During negotiations with the suppliers, Walmart insisted on single price invoice. However, it also helped
the suppliers to forecast the sales, and improve the overall performance. In 2019, Walmart also allowed
its big suppliers to do their advertisement inside Walmart stores, which helped the suppliers to increase
their sales, and Walmart to generate additional revenues.