Know how: Walmart low price strategy

-

Walmart world's largest U.S based retailer is providing lowest price product either it is fmcg or any others. the very first reason is amazing supply chain management,tough negotiator and highest spending on Information technology. Details are followings-
1. Tough negotiator- when they purchase any materials from vendors they make sure that no one sell cheaper and better than this,only than they finalize deal. there negotiator is master in negotiation with vendors or manufacturers.
2. Bulk purchasing- very second reason is they purchase in Bulk because they believe in high volume with low margin. let's see how they purchase items If a manufacturer produce product which cost of production(exclude sales&marketing) is 10 lac in one year and company spend 5 lac for sales&marketing, then walmart will say please give this product to me @12 lac direct from manufacturer plant. so, there is no harm for company or walmart because company is getting direct profit of 3 lac and walmart is getting much lower then market price. this is called win-win situation.
3. Large volume with low margin- Walmart believe in this concept that's what India's retail magnate told, "walmart sales is equal to India's total consumption".
4. Inventory management- Walmart has RFID(radio frequency identification) technology by using this device company can track record of Inventory label time to time. If any product get sold from any store this device can inform all store and distribution centre about this sales within seconds. company has such a amazing information technology so, they are manging it.
5. Transportation management- Walmart has own distribution channels with more than 4000 trucks. they make sure that delivery of product is happening within two days from distribution channel to stores. they hire such truck drivers who has driven more than 300000 lac kilometers without any major violence.
6. Supply chain-
A. In terms of finished products- VENDORS TO DISTRIBUTION CHANNELS TO STORES
B. In terms of others products- MANUFACTURER TO STORE( this is called Cross docking distribution).
whatever I say is very less about walmart in every thing they are master is everything.

Comments

Post a Comment

Popular posts from this blog

World Class Exhibition Center in Dwarka

-
Image
The national capital is set to get a state-of-the-art convention centre on the lines of the ones in Shanghai, Hong Kong and Singapore for hosting exhibitions, trade fairs and summits of international standards. To be constructed in Dwarka’s Sector 25, three kilometers from the IGI airport in south-west Delhi, the two-phased project was approved by the Union cabinet in November while the contracts were awarded last week. Architects working on the project, billed as one of the biggest in Asia, said it is conceived as a smart, zero energy, world-class facility designed for an events like G-20 summit. The  exhibition-cum-convention centre in Dwarka  and its allied infrastructure which includes, an arena, primary structure, Delhi Metro, road connectivity, hotels and office spaces, is being constructed at an estimated cost of ₹25,703 crore. It will be completed by 2025, a statement of Union ministry of commerce and industry informing about the Cabinet decision said.
Read more

Toyota: A Case of Overconfident

-
Image
Toyota a Japanese automobile company and world's largest automobile company in terms of sales. Now a days company is facing crisis this is due to recall of their vehicles(Toyota Prius) which has some sort of problem in brake and accelarater. Why this is a case of overconfident because when company got news about problem in few cars. They were fully confident that they can handle this problem effectively but fact is not like this. Now they are going to become victim of overconfident. According to company's philosophy "each problem provides opportunity for improvement". That's what company is facing problem. According to analysts the main reason for this recall is higher growing rate and other factors as well. so, being a company who believe in Just-in-time facilities how they are facing this types of problems. Now when Toyota started repairing millions of defected car they were not able to handle it. The very first and recent reason is Arrogance which the company h
Read more

DHL: Global Leader in Logistic Industry

-
Image
DHL is a global leader in world market having 43% market share. The name DHL derived from its founder name which is Adrian Dalsey, Larry Hillblom and Robert Lynn. This company has been established in 1969 and its Headquarter is in Germany. DHL operates in more than 220 countries with providing end to end solution of logistic. DHL business is in four segment first one is Air express, supply chain, freight forwarding and Blue dart express due to this capacity they are leader in world market. DHL main competitors are FedEx, USP and others. A far as DHL strategy is concern they are looking at their business from ground to top. Some of their strategy is following- 1. Provide solution of problem- Their business strategy says If you are doing business than you need to understand that why I am in this business. Once you understood the problem than provide solutions of that problem for doing great business for long run. 2. About your competitor- According to this point they says that first you
Read more