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Walmart – Case Study
Operations Management – SCH-MGMT-670
Catna, Shanmuga
9/24/2014
Operations Management – SCH-MGMT-670
To what extent can Walmart’s competitive advantages be transferred into international
spheres?
Based in Bentonville, Arkansas, Walmart Stores, Inc. was founded in 1945 by Sam Walton and is now one of the
largest retailers worldwide. It operates stores in a variety of formats, such as supermarkets, discount stores,
warehouse clubs, and online properties. Its product offerings are wide-ranging: automotive accessories, food and
beverages, cosmetics, clothing, and housewares. Walmart’s strategy is to be the low-cost leader among mass
merchandisers. It operates on a scale unmatched by any of its competitors. To pursue its strategy, Walmart focuses
on using advanced systems and technologies to reduce costs, improving relationships with suppliers by purchasing
enormous quantities, and being a tough bargainer.
Competitive Advantages
Competitive advantage is anything that a company has, or does better, that customers value but the competition
cannot match. The following sections discuss how Walmart uses its value chain throughout its primary activities to
achieve its strategy and have a competitive advantage.
Efficient Inbound and Outbound Logistics: Products from distributors and suppliers are transported
to Walmart’s distribution centers via its large truck fleet transportation system and in case of perishables
such as groceries are concerned, products are managed by Walmart’s suppliers’ inventory management
systems connected directly to the store. Walmart also uses a technique known as “cross docking” whereby
finished goods are taken straight from the supplier’s site, sorted, and delivered directly to the store. This
leads to a reduction in the handling and storage of finished goods, resulting in fewer damaged goods and
decreased staff needs. The efficiency of this system leads to a form of just-in-time inventory, allowing
customers to control the supply of goods they want by their purchases.
