Wal-Mart's –
Cost
Leadership
Strategy
Made By:SACHIN MOTWANI
About Wal-Mart

The company was incorporated as Wal-Mart Stores, Inc. on
October 31, 1969 and first distribution center in
Bentonville,Arkansas.

Wal-Mart Stores, Inc. branded as Walmart since 2008 and
Wal-Mart before then, is an American public multinational
corporation that runs chains of large discount department
stores and warehouse stores.
Walmart has 8,500 stores in 15 countries, under 55 different names.
It operates in Mexico as Walmex, in the United Kingdom as Asda, in
Japan as Seiyu, and in India as Best Price.
Made By- Sachin Motwani
Walmart’s Operating Divisions
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Retail Formats
Super
centr
es
Restaur
ants
Made By- Sachin Motwani
Wal-Mart is in the
business of selling
everything
customers need in
their everyday lives.
Wal-Mart pursues
multiple strategies.
 Additionally,
Concerning
concentration,
Wal-Mart
continually finds
more consumer
goods to sell at
its stores which
can take money
from
competitors.
when WalMart entered into the
food market, it quickly
consolidated and held
to good, saleable
products.
Wal-Mart never forays too far
into a market and only sells
what will make it a profit.
Made By- Sachin Motwani
 Wal-Mart
definitely has the business strategy of
Low Cost Leadership.
 They do nothing to really differentiate
themselves from competitors and provide nofrills self-service stores that always provide the
lowest prices.
 While they do try to provide good customer
service on top of low prices, Wal-Mart’s
strength is low-prices.
 No one has such a supplier and distribution
network like Wal-Mart that allows such low
prices.
Made By- Sachin Motwani
3 S of
WalMart
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STRATEGY
 Wal-Mart’s overall strategy is to always
provide the lowest prices.
 They aim to have a store which provides
convenience by allowing consumers to find
everything they need under one roof.
 This strategy has infiltrated the entire company
so that in encompasses all the other S’s.
 The other two hard S’s, systems and structure,
support this strategy.
Made By- Sachin Motwani
SYSTEM
 Wal-Mart has in place a
set of systems that helps it
achieve its strategy of low
prices everyday.
 Wal-Mart has employed
computers, networking,
and the internet to reduce
inventories and waste,
and speed deliveries.
 Wal-Mart has streamlined
the supply system so well
that it would be very hard
to find any inefficiencies
and would be hard for any
competitor to beat.
The largest
and most
profitable of
these systems
is the
Information
Technology
system.
Made By- Sachin Motwani
STRUCTURE
 Wal-Mart also employs a good structure that works
with the systems to empower the low price
strategy.
 Wal-Mart has planned warehouses and integrated
them with systems in order to achieve “crossdocking” so that supplies coming in never touch
the warehouse floor before going out to stores,
which greatly reduces inventory cost.
 They have developed time schedules so that one
truck can service many stores and that after a
delivery the truck can take back returned goods to
the warehouse.
Made By- Sachin Motwani
an
innovative
warehousing
system
an
emphasis
on
everyday
low prices
basing
store
design on
consumer
studies
using size to
negotiate
for the best
price on
brandname items
effective
use of
superstores
an industry
leading
inventory
control
system
Wal-Mart
has pursued
many
strategies
over the
decades to
achieve
and then
maintain a
costleadership
position.
Made By- Sachin Motwani
Aftermath of Walmart- Negative
1.
2.
3.
• As Walmart grew rapidly into the world's largest
corporation, many critics worried about the effect of its
stores on local communities, particularly small towns
with many "mom and pop" stores.
• Economic Research found that some small towns can
lose almost half of their retail trade within ten years of a
Wal-Mart store opening.
• Both positive and negative impacts on existing stores in
the area where the new supercenter locates.
Made By- Sachin Motwani
1.
2.
3.
•Since 2005 spending $500 million a year to increase fuel
efficiency in Walmart's truck fleet by 25% over three
years and double it within ten, reduce greenhouse gas
emissions by 20% in seven years, reduce energy use at
stores by 30%.
•Wal-Mart announced a program to improve the
nutritional values of its store brands over the next five
years, gradually reducing the amount of salt and sugar,
and eliminating trans fat.
•The company announced that it was testing its new
"Walmart To Go" home delivery system where customers
will be able to order specific items offered on their
website such as groceries, toiletries, and household
supplies.
Aftermath - Positives
Made By- Sachin Motwani
SUGGESTIONS
 Since
Indian government is thinking to
allow 51% /49%/46% of FDI for multi brand
retails, So Walmart has a great scope of
expanding their business in India
 They
need to Expand their vendor base
for small and mid cap companies.
Made By- Sachin Motwani
 They
should support mom and pop stores.
They should also be reaching out to local
mom and pops with free consulting advice.
 The world’s largest retailer WalMart has
termed India’s decision to allow 51% FDI in
multi-brand retail as a “first important step”
and said it will study the finer details of the
new policy to determine the impact on its
ability to do business in India.
Made By- Sachin Motwani