Case 1-2 Wal-Mart Stores, Inc.

1. What is Wal-Marts strategy? What is the basis on which Wal-Mart builds its
competitive advantage?
Wal-Marts strategy is selling branded products at low cost.
The basis is Wal-Mart deliberately ensured it didnt become too dependant on
any one supplier, no single vendor constitued more than 4 percent of its overall
purchase volume.
Wal-Mart used saturation strategy for store expansion.
The standard was to be able to drive from the distribution centre to a store
within a day.
Wal-Mart built large discount stores in small rural towns.

2. How do Wal-Marts control systems help execute the firms strategy?

Each store constituted an investment center and was evaluated on its profits
relative to its inventory systems. Data from over 5,300 stores on its such as sales,
expenses, and profit and loss were collected, analyzed, and transmitted
electronically on a real-time basis, rapidly revealing how a particular
region,district, store, department within a store, or item within a department is
performing. Information enables the company to reduce the likelihood of stock-
outs and the need for markdowns and slow moving stock, and to maximize
inventory turnover.
Wal-Mart instituted several other policies and programs for its associates:
incentive bonuses, a discount stock purchase plan, promotion from within, pay
raises based on performance not seniority, and an open-door policy.
Wal-Mart had also persuaded its suppliers to have electronic hook ups with its
store.
Wal-Mart owned its trucks when most competitors outsources trucks.

Case 3-1 Southwest Airlines Corporation

1. What is Southwests strategy? What is the basis on which Southwest builds its
competitive advantage?
Southwests strategy is to improve efficiency and pass cost saving to its passangers
by offering them low prices. The base on which Shouthwest builds its competitive
advantage is putting employees first, this will make them take real care of
customers. There are two main strategic areas:
a. Operating cost
Southwest Airlines has the lowest fares among its competition. Its lowest farres
partly came from low operational costs.
b. People
Southwest tries to different way. For example, not assigning seats in its flights to
reinforce its image that it gets passengers to their destinations when they want to
get there, on time, at the lowest possible fares. By nit assigning seats, Southwest
can turn the airplanes quicker at the gate.

2. How do Southwests control systems help execute the firms strategy?

Southwests control system help execute the firms strategy by:
Implementing short haul and medium haul
On-line booking
Less time at the gate
Hedge fuel and oil