Case: Wal*Mart

Wholesale club format… ….Why do they

do that?
Wal*Mart KEY SUCCESS FACTORS:
KEY SUCCESS
FACTORS
Wal*Mart CUSTOMER • Lowest Operational & Distribution Costs How Wal*Mart is leading
VALUE PROPOSITION •Operational Efficiencies
COMPETITION
• Logistics Efficiencies / Distribution
• Labor Cost Efficiencies
• Lowes Prices • Lowes Prices
• Economies of Scale •
• Product Offering/Portfolio Convenient Location (covering the map)
• Store Lay-out, logistics (parking) • Wide Products Range • Bargaining Power/ Suppliers Relation
• Service • Consumers Proximity • Associates “policy”
• ……. • HR Management • ………
• Vendor Relationships
• ………….

Store Size mgt Inventory

Sales Mix of Inventory (sales/sq ft) Management
Product Management Capital/Assets
Bargaining Power/ Management
Suppliers Relation

ROCE
Return on Sales Sales/Capital Employed

Wal*Mart PROFIT DRIVERS – Qualitative & Quantitative Analysis

 Wholesale club format… ….Why do they
do that?
the Sam’s Wholesale Club format – WHY?
Because it fits with Company Strategy & Organizational Capabilities

Wal* Mart Strategy

Organizational Capabilities Industry

&
Core
Resources Capabilities Market

Strategy Execution

DIVERSIFICATION INTERNATIONALIZATIO
Sam’s Club N
Wholesale club format… ….Why do they
do that?
Wal* Mart “Market” Strategy:
Keep the Business Growing by Segmenting the Market & leading every
Segment in which Wal*Mart is competing (looking forward to be a
MONOPOLIST) by leveraging its Resources and Core Capabilities.
Strategy Execution

DIVERSIFICATION INTERNATIONALIZATIO
Sam’s Club N

WHY?

CONCLUSION
1) Diversify and grow

2) Taking advantage of existing capabilities

3) Maximize returns by attempting to create a Monopoly

in the wholesale sector