Strategic Analysis: Organization & Competitive

3791 words - 16 pages

Strategic Analysis: Organization & Competitive
Levernia M.A. McCree
Business Tactics and Execution | BUS480 A01
Argosy University – Dr. Dillard

Wal-Mart strategy, is selling products at a lower price, than its competitors. “Wal-Mart has a low-cost, high volume overall strategy, and a “Profit-At-Any-Cost” business model (Jway, 2013), which focus is to provide good customer service by keeping the customer satisfied” (Wal-Mart, 2007) This business model makes it possible for consumers to pay low prices for all their needs. Wal-Mart is positioned for long-term, after topping of a great year with a solid fourth quarter (Wal-Mart Corporation, 2012). Wal-Mart continues to meet all of ...view middle of the document...

S. “the number of Wal-Mart Supercenters grew by 60%, from 972 in July 2001 to 1,562 by July 2004, and it has continued to add 100 new supercenter open per year. More than half of all U.S. Wal-Mart stores now sell a full line of grocery items, which is in approximately over 2400 supercenters (Basker, E. & Noel, M.,2009). Wal-Mart have been cited for supermarket bankruptcy cases in the last decade, because of its aggressive pricing and expansion (Callahan, P. & A. Zimmerman, 2003). -------------------------------------------------
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Wal-Mart focuses on_____________-------------------------------------------------
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Wal-Mart's success is often attributed to its expert logistics systems (Westerman, 2001; Ellickson, 2006) Does it convey the purpose and primary objectives of the company? -------------------------------------------------
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Wal-Mart has a sustainable competitive long term advantage.-------------------------------------------------
It has a (Look up) vertical bargaining power of suppliers and buyers?-------------------------------------------------
Overall, we conclude that the impact of Wal-Mart Supercenter entry on competitor prices, while averaging 1.1%, is not uniformly distributed across its competitors. Wal-Mart induces smaller chains to cut their prices substantially more than the Big Three chains do. Meanwhile, “low-end” chains, those most directly competing with Wal-Mart for the same set of price-elastic consumers, respond to entry with relatively larger price cuts. In very dense markets profits may already be razor thin, constraining the price impact of Wal-Mart entry. Basker, E. and Noel, M.(2009),-------------------------------------------------
Look up Targets DCWal-Mart supplies its stores primarily through several dozen Distribution Centers (DCs) around the country. As of July 2001, only 20 DCs dealt with groceries; by July 2004, twelve more opened. According to Wal-Mart Watch, the median DC serves about 90 stores within a 250 mile radius. If it is cheaper for Wal-Mart to supply markets closer to DCs, we should observe more Supercenters in these markets. This logic leads us to use each market's distance to the nearest food DC to instrument for the number of Supercenters. However, conditional on opening a Supercenter in a market, distance from the nearest food DC could also affect the store's costs and therefore prices, and thus the instrument may still be correlated with the error term in equation (1). A second problem is that Wal-Mart determines the locations of its Supercenters and DCs simultaneously (see Holmes, 2008). Even though each DC serves many stores, so that any one market has a minimal effect on the location of a DC, market characteristics tend to be spatially correlated, which can exacerbate the endogenous element in the DC location...

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