Wal-Mart Stores: “Every Day Low Prices in China”
Strengths of Wal-Mart in the United States
Every Day Low Prices
Economies of Scale
Another key advantage Wal-Mart has over the industry is its supply–side economies of scale. The organization enjoys lower costs per units because it purchases products in high volumes. This allows the company to spread the costs over more units. In addition, the company had successful innovation in technology to increase efficiency in distribution and sales. This allows the organization to develop better terms with suppliers to sale products at the lowest price possible (Porter, pg.3). As a result, entry barriers for new competitors are increased forcing competitors to take on the disadvantage in cost. When Wal-Mart entered into the market it was able to avoidthis competitive advantage because they developed only in small towns. Due to the small populations it served, they were able to saturate the market deterring new competition and grow below the competitor’s radar. In addition, since the company was operating in small towns, the company was able reduce costs from the lower land and real estate prices (Farhoomand, pg.5). Customer Satisfaction
The most important competitive advantage for the corporation is its emphasis on customer satisfaction. As a result, it increases the value of the organization that attracted new customers and kept existing customers coming back for more. The key concept the organization utilizes is “exceed your customers’ expectations.” The statement promotes great customer service by showing respect to the individual and striving for excellence. Throughout the organization employees realize that a customer should never be allowed to leave unsatisfied. Wal-Mart reveals that the key to profit and growth is to provide quality goods at a low price in a friendly environment (Farhoomand, pg.4) Distribution and Logistics Technology
The core of Wal-Mart’s business operation...
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