Wal-Mart's Cost Leadership*

Details

Mini Case Code : CLIM013
Publication date : 2005
Subject : International Marketing
Industry : Retail sector
Length : 04 Pages
Price : Rs. 100

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Key words:

Wal-Mart, retail chain, retail industry, cost reduction strategies, cost-leadership, competitive edge, operational efficiencies, pricing strategies, Every Day Low Prices (EDLP), rollback pricing, special buys, distribution network, efficient business practices, supply chain, out-of-stock levels, point-of-sale prices, cross-docking inventory system, inventory management, store layouts, Operating expenses

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

The caselet observes how the strategies adopted by Wal-Mart helped it in attaining cost-leadership. It explains the various innovative methods that the company adopted, which enabled it to achieve a competitive position in the market. One of the major reasons for Wal-Mart's success was the pricing of its products. The caselet explains how Wal-Mart's logistics practices helped it to offer lower prices than its competitors.

Issues: » Wal-Mart's cost-leadership » The pricing strategies of Wal-Mart » How a good distribution network helped Wal-Mart in cutting down costs » Role of technology in Wal-Mart's success story Introduction Wal-Mart, a global retail chain, was founded by Sam Walton in 1962 in Rogers, Arkansas State, USA. By 2004, Wal-Mart had more than 4800 stores around the world and more than 600,000 Americans worked for it.

Questions for Discussion:

1. Wal-Mart has gained a leadership position in the retail market due to its competitive pricing strategies. Discuss.

2. How did Wal-Mart manage to get the cost leadership advantage?

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