Retail Strats – Coursework Example
Wal-Mart Retail Strategies In one of Wal-Mart’s strategies, it divided its core base--the low price seekers--into three main segments, ly; (1) “brand inspirational,” low income earners who tend to value brands, (2) “price-sensitive affluent,” people with more money but very attracted to product deals, and (3) “value-price shoppers,” low income earners who are restrained by very low budgets. Subsequently, Wal-Mart then starts to develop innovative products that would uniquely cater to each group, e.g. offering well-known brands at a low price to ‘brand inspirational’. This enables Wal-Mart to appeal better to the three segments, as well as to enhance its image as the market leader among all low-cost providers. Lisa Bradner (as cited in Hitt, Ireland, & Hoskisson, 2009, p. 374), senior research analyst, supports this strategy for Wal-Mart because this aligns with the company’s basic brand proposition and its main consumer base.
Another strategy by Wal-Mart is the creation of “neighborhood markets,” done through creating smaller [40,000 sq. ft] stores that only stock around 20,000-30,000 items--compared to more than 100,000 items in superstores. Still in line with cost-leadership strategy, Wal-Mart offered the items at only 1-2% margin and had to position the stores nearby warehouse and delivery systems (as cited in Hill & Jones, 2011, p. 176). This kept the costs low since shipping and transportation costs were lessened. Incidentally, both strategies provide an avenue for Wal-Mart to optimize its cost-efficient supply chain--through national roll-outs on one brand instead of shipping different assortments to different areas. Not to mention, implementing both strategies also enables Wal-Mart to be consistent in its ultimate value proposition, “Low Prices, Always.” Notably, through these strategies, Wal-Mart’s supply chain will remain--as it always had--as Wal-Mart’s biggest competitive advantage.
Hitt, M., Ireland, D., & Hoskisson, R. (2009). Strategic management: Competitiveness
and globalization : cases (8th ed.). Mason, USA: Cengage Learning.
Hill, C., & Jones, G. (2011). Essentials of strategic management (3rd ed.). USA: