Walmart is an internationally known retail company that offers everything from food products to electronics, catering to the needs of a diverse group of people. Through its extensive base of suppliers, the company has made it possible to have a wide assortment of goods, ensuring supply and competitive pricing. Walmart’s core value chain activities center on relationships with vendors, buying goods, managing and distributing inventory, operating the stores, and marketing and selling. These activities are well carried out utilizing highly developed supply chain management systems and store location planning procedures. For Walmart, scale, efficiency, and technology integration drive its competitive advantage throughout its supply chain. Nevertheless, due to increased competition and emerging consumer tastes and preferences, the company must uphold its low-cost leadership number.
Walmart also offers comprehensive products and services like groceries, household items, apparel, electronics, and pharmaceutical services. The key suppliers of Walmart include General Mills, Procter and Gamble, Sony, and Coca-Cola (GlobalData Plc, 2021). Regarding the end users, Walmart’s services go to personal consumers, families, and enterprises in different demographics worldwide, which is one of its competitive advantages.
Walmart partners with various vendors to get different items for a broad range of customers. It entails performing functions like contracting, quality standards determination, and forging long-term relationships that guarantee a continuous supply (Hariga & Ben-Daya, 2023). Through its supplier partnership, the company builds a reliable and efficient supply chain network that helps the retailer to keep their commitment to providing the shoppers with superior value, i.e., popular products marketed affordably. Besides, these collaborations often involve joint initiatives involving driving an open learning environment, sustainability, and social responsibility, thus deepening the partnership environment and fostering positive impact (Hariga & Ben-Daya, 2023). Walmart has high-quality assurance criteria for things it orders from vendors. These standards allow for products with the same or even higher safety, durability, and performance levels than people expect (Hariga & Ben-Daya, 2023). Walmart associates with vendors to present these quality standards, conduct audits, and implement quality control throughout the supply chain. Regular evaluations and remedy actions are implemented to ensure product quality and compliance consistency.
Using purchasing goods from suppliers in larger quantities and planning procurement strategically, Walmart ensures that it receives cheap prices regularly. It could, for instance, identify market patterns, assess requirements, optimize inventory levels, minimize costs, and maximize availability (Tu & Creativity, 2022). Demand forecasting is another critical area within Walmart’s purchasing strategy. Using state-of-the-art analytics and data-driven insights, the company can foresee future demand with a high precision of accuracy. This is a way for Walmart to create a fluid inventory system by appropriately responding to customer preferences to avoid ordering that is too high or too low compared to the demand (Tu & Creativity, 2022). The core cost reduction strategy that Walmart is working on is inventory optimization. The company can reduce storage and old merchandise waste by keeping a short inventory turnover cycle and only producing small amounts of stock (Tu & Creativity, 2022). Moreover, taking proper control of inventory helps avoid stockout situations, and by doing this, Walmart will be able to provide the product to customers as quickly as possible.
Walmart uses modern inventory management systems to manage stock levels, optimize the reordering processes, and prevent stockouts. Efficient distribution networks facilitate the speedy delivery of goods from manufacturers directly to stores, thus decreasing the stock period and reducing holding costs (Alsharari, 2021). Regarding inventory management systems, Walmart employs complex inventory management systems to keep track of product levels, collect sales information, and maximize replenishment operations. These systems use a combination of barcode scanning, Radio Frequency Identification (RFID) technologies, and real-time data analysis to provide accurate and current inventory information (GlobalData Plc, 2021). Concerning stock level monitoring, Walmart’s inventory management helps track the stock levels of all the products in the stores. This data is collected through the UPC (Universal Product Code) system at the point-of-sale level and transmitted to the centralized inventory system. By tracking real-time sales data, Walmart can determine which products are selling fast and which need replenishment (Alsharari, 2021). When the inventory level of a specific item reaches below the predetermined level (reorder point), the inventory management system initiates an automatic replenishment process. The system produces purchase orders or transfer requests to replenish the product inventory from distribution centers or other Walmart stores within the network. By automating this process, Walmart speeds up the restocking and avoids the stockout risks.
Walmart’s worldwide store network adopts strategic location mapping, layout development, and effective store management methods to improve customer experience and grow sales performance (Alsharari, 2021). It includes such efforts as booking adequate workers, keeping the facility clean, and facilitating the process with new and improved technologies. Walmart develops a strategic location for items in their store with high visibility, and that is usually picked out more often. Frequently bought items or perishable goods might be placed at the rear of the store; thus, spending time roaming through other section customers can be more possible for further buys (Alsharari, 2021). Walmart designs its stores to make aisles wide enough for convenient and easy navigation, which is intended to create a pleasant and comfortable shopping experience for clients. A well-labeled signage system and organized product grouping allow customers to quickly locate various goods and reduce their time to look for them (Alsharari, 2021). Walmart also endeavors to shorten the time customers wait to cash out by supplying sufficient cash counters and self-checkout stations. The easier and faster checkout processes are, the more customer satisfaction and repeat visits will increase.
Moreover, in their day-to-day operations, Walmart uses different store management practices to run their stores flawlessly and give customers a good feeling while shopping. In addition, in terms of adequate staffing, Walmart’s provision of immediate help to more customers is to be achieved through staffing at appropriate levels and running the store effectively (Alsharari, 2021). It is meant to set shifts, train employees, and deploy staff in different store departments based on customer flow patterns.
Walmart applies multichannel marketing, including advertising, promotion, and digital marketing channels to reach and interact with customers. It utilizes data analytics to customize the marketing campaign, adjust the pricing strategies, and make loyal customers through rewards programs. Walmart realizes the significance of engaging consumers via various channels, which can be online or offline (Chen, 2021). These include traditional advertising techniques such as television, radio, and print media, outdoor advertising, and digital channels such as social media, email marketing, and search engine optimization (SEO). With the varied selection of marketing platforms, Walmart guarantees that its messages reach consumers of every kind. This is how Walmart incorporates data analytics into its marketing efforts and customizes the content to suit individual preferences (Chen, 2021). By analyzing customer data, such as purchase history, browsing behaviors, and demographics, Walmart can target customers with custom messages and promotions based on preferences and interests. Such relevancy is enhanced by personalized marketing communications, which improves the customer’s experience, thus increasing engagement and conversion rates (Chen, 2021). In the digital platform age, Walmart has grown its online presence and made a provision for e-commerce capabilities. The company’s website and mobile application are the leading sales channels, giving customers the advantage of a simple online shop for various goods (Chen, 2021).
On the other hand, Walmart utilizes digital marketing strategies of targeted advertising, remarketing campaigns, and social media promotion to attract visitors to its digital sites and enhance online sales. Walmart uses data analytics to set pricing strategies so that the price of the whole e-product range will shift more optimally. By examining market trends, competitor prices, and customer demand, Walmart will set a competitive price in the eyes of value-oriented consumers. It will maximize profitability simultaneously (GlobalData Plc, 2021). The use of dynamic pricing algorithms is likely through which prices will be adjusted in real-time depending on the factors, e.g., demand and supply dynamics, seasonal changes, and the competitor’s price change.
Some of Walmart’s activities with competitive advantage include partnering with vendors, purchasing goods, and managing and distributing inventory. Based on partnering with vendors, Walmart has a competitive advantage because of Walmart’s size and market dominance. The company can bargain with suppliers for advantageous terms and prices, guaranteeing a dependable and economical supply chain (Hariga & Ben-Daya, 2023). Walmart has a competitive advantage over smaller retailers due to its extensive vendor relationships and economies of scale, allowing it to offer customers a wide selection of products and secure exclusive deals. In addition, Walmart has a competitive advantage in sourcing products because of its significant purchasing power (Chen, 2021). By utilizing economies of scale, the company can procure products at a reduced cost compared to its rivals.
Walmart can maximize its purchasing decisions and reduce inventory costs by effectively managing its procurement process and using advanced inventory management systems. Lastly, Walmart has a competitive advantage in this value chain activity thanks to its strong inventory management capabilities. The business uses modern technology to track and monitor the amount of inventory in real time, preventing shortages and guaranteeing effective replenishment (Alsharari, 2021). Due to its vast distribution network, Walmart can offer products in-store more quickly and with less lead time, thanks to efficient logistics.
Even though Walmart has a lot of competitive advantages, it is also challenged by some of the barriers to the value chain. A disadvantage may be that it attracts criticism towards its labor and worker care standards (Chen, 2021). This can bring the hazards of brand image damage and even customer outrage. Moreover, retail will become more digitalized, and Walmart needs to allocate more money for IT advances to keep pace with e-retailers.
In conclusion, Walmart boasts numerous competitive strengths that can be found in its value chain processes. Not only does the company have strong ties with the vendors, practical purchases, effective inventory management, mastery in store management, and robust marketing and selling strategy, but they are also at the top. Besides that, Walmart has to overcome the problems related to labor and move its company to a new level of the digital world to keep its position competitive in the retail market.
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