Maintaining Its Buyer Power Wal-Marts largest competitive advantage lies in its ability to eliminate supplier power.

WalMart boasts its huge share of the market, luring many vendors to come and exploiting economies of scale available to their suppliers. With its unusual size in the retail industry and its influence, WalMart maintains atypical relationship with its suppliers. Most of its suppliers largest sales go to WalMart while Wal-Mart allows only a small portion from each specific supplier to add to its revenue; suppliers such as Clorox and Kraft heavily depend on Wal-Mart to generate majority of their total sales. Thusly, Wal-Mart is able to always have the upper edge during price negotiations with its vendors. While many suppliers feel that relationship with Wal-Mart may be hostile, they believe WalMart can thrust them to become more efficient in their businesses. Their relationships achieve something greater when Wal-Mart reinforces the majority of its vendors to install certain systems to foster their supply-chain management: EDI and Retail Link. At no cost, vendors were able to realize faster replenishments, lower inventories, and mass customization for local needs; suppliers have historically benefitted greatly from building their contracts with Wal-Mart. While other large retailers may exercise similar vendor agreement, none in the industry is able to completely eliminate supplier power and provide a unique relationship. Must maintain a relation where neither party is intimidated by the other. No hostile relationship. Any other ideas? Lower Costs through Technology Advancement Wal-Mart has always been ahead of the curve in applying information and communication technology to reinforce its decision-making. Spotting purchasing patterns within different demographics is just one of the few ways Wal-Mart has revolutionized retail markets by integrating information technology to the root of its sales. As one of the industrys key accomplishing factor, IT has successfully linked suppliers and Wal-Mart to reduce its inventory much like production at Harley Davison uses to hold down its inventories (case study). Building on top of its leading IT system, Wal-Mart further integrates technology into its warehousing and distribution systems. From cross-docking to RFID, Wal-Mart has always been a pioneer for many of these systems, obtaining many advantages over its competitors as an early adopter.

Must always be ahead of the curve. Continue to cut cost by adopting new technologies that may help its vast network. Always seek for infrastructure development. Use existing wal-mart oned trucks and trailers to develop extensive ground operations. Reinvigorating Culture Additionally, these stores are operating closely with Wal-Marts headquarters in Bentonville. During its early days in the industry, Wal-Mart was able to hold weekly corporate meetings with its senior managers and vice presidents. However, with its growing empire, many believe that its central management is weakening. Furthermore, Wal-Mart faces dire shortcomings when it comes to its human resource management. Although Wal-Mart strives to appear as a company that embodies responsible employee treatment, emphasis on performance and low-cost has frequently resulted in cases of employee abuse. While other firms in the industry have had similar cases, Wal-Mart, being the worlds largest retailer, has always been a main subject of scrutiny. Create a feedback look where lower ends of the hierarchy can report to upper management without a backfire. Complaints and improvements. Like the following General control mechanisms exist within Wal-Marts corporate structure including internal audits, feedback channels, quality control, and codes of conduct. However, these quality and integrity assurance mechanisms are not properly utilized to ensure employee satisfaction. Management should promote these internal controls to start a transformation back to ethical behavior. Divert away from current decentralization of store management. While individual stores may have their freedom to choose products and prices etc, managers must always be directly linked to the headquarters and its core mission.

Revamping its Brand Image However, Wal-Mart shows its weakest side when it comes to brand image and marketing. Beyond its accent on serving customers with unbeatable low prices, Wal-Mart receives countless attacks from advocacy groups and politicians for its imaginable behavior as a giant corporation.

From changing supplier code of conduct to redesigning of its brand logo, Wal-Mart strives to be redeemed as both socially and environmentally responsible company. However, despite its efforts, Wal-Mart continues to be accused of improperly transporting or dumping pesticides, chemicals, paint, acid, aerosols, fertilizer and motor oil. New face for Wal-Mart? Must cohesively change as a company to be viewed by the public as something more than just cold-hearted giant corporate. Create more buzz and news in the areas of social works and environmental activities. I.e. develop a brand image that is similar to Google. Google may be big, but people dont general have a negative giant corporate image on Goolge, while they do on Wal-Mart. Somehow(?) solve eating up local family markets. Educate them on how Wal-Mart can be a great addition to their town. Education through ad.

Competitive Advantage Brand Image

Actions - Promote - Every day low prices

Advantages - reinforces volumedrive strategy - stable supply chain through steady prices - collection of customer purchase behavior info - efficient supply chain/ lower cost - improved customer satisfaction through accurate demand forecasting - first-mover advantage - Improved supply chain - share economies of scale - Market dominance

Difficulties - maintaining supply chain to lower costs

Technology Integration

- RFID, EDI, Retail Link - Suppliers adoption of these technologies

- Expense - Time consumption in full integration and development

Relationship with Partners

- Advantageous relationship for both parties/profitability - Technology integration

- Requires integrated IT - Access to sales and industry data

Distribution Capabilities

- Cross-docking - inside-out location strategy

- Cost savings from lower inventory level / lower prices - Economies of scale

- Expense - Required integrated IT