Walmart Case Study

By Adrian Lopez B026 - NMIMS

Evaluated by Professor Cajetan DSouza
1) Describe Walmart value chain and analyze the
retailers strength and limitations to the system?
Walmart has gained much of its market share and customer growth by passing on saving from the
supply chain efficiencies
The company sources from many retailers but does not charge any slotting fees to them for the shelf
space
Walmart tends to skip all the middle men to bring the product directly to their superstores or other
franchise model
Strength:
Walmart can dictate the delivery schedule and inventory level for suppliers
Gains full control of product design as supplier are forced to follow the product specifications as per
Walmarts requirements
Retail the goods at a much higher discount as compared to its competitors
Limitations:
Exponential growth has caused Walmart to de-emphasize domestic market Made in America as it
unviable to the scale the company demands
The company has to face a lot of domestic resistance as it below low prices drive out small retailers
Q2) Discuss the concerns proposed by critics that
Walmart has become too large and powerful?
Walmart is one of the largest companies in the world with $245 billion sales last year, its $12
billion imports from China accounted for nearly 1/10 th of the total U.S. imports in a year
The large scale of the company couple with its aggressive discount strategy has been
responsible for the extraordinarily low inflation in recent years
The company also is knows to have caused the sorry state of retail wages in U.S. (The
company pays USD 8.23 an hours or $13,861 which is below the average federal poverty
line for a family of three)
The company faces serious local backlash among competing retailer vendors, organized
labor, community activist and cultural and political aggressive
Walmart also has ushered in a policing culture by selling only sanitized CDs, music and
magazines. The company demands company to sell clean in the name of protecting the
customers
Its huge buying power and efficiency has forced many local rivals to close, if there is a local
resistance the company is knows to pull strings to lobby the government to pass a
referendum
Q3) Evaluate Walmarts role as a cultural
gatekeeper?
The companys role as cultural gatekeeper role has narrowed the
main stream for entertainment offering while imparting to it a
rightward tilt
The big companies have stopped complaining and have now bend
backwards to provide Walmart sanitized version of products (CDs,
magazine, and rap music)
While the company calls itself a first truly urban company it only
listens to customer complaints where product censoring is concerned
not when the people have an issue with opening of a new Walmart
store
Q4) Is Walmart conducting adequate market sensing
research concerning customer preference and satisfaction?

The company uses no factual or statistical method to show

why it chooses to sensor only certain products while certain
product continue to be sold (Other Magazines vs. Rolling
Stones) or Preven
The company does not in actual track how majority of its
customers feel about products in terms of required censorship
It takes decision in an ad-hoc manner to complaints lodged by
a handful of customers and outside group, which are usually
but not always of the conservative persuasion
Q5) Identify and analyze potential strategic
threats that may impact Walmart?
Walmarts low pricing strategy has left all other retailers to scurry
around to find the lowest price points
The companys ambitious growth plans of opening more 1000
superstores comes at a risk of finding sufficient manpower to run the
stores
Its anti-union stand, labor lawsuits, and local protest could result in
future challenges
There are talks in the industry that if competitors do not like Walmart
the best strategy would be to be patient, as new business models will
eventually come in and grab market share