...INTRODUCTION The purpose of this report is to analyse a competitive industry using Terry Porter’s five forces model. The analysis will then narrow the industry into segments and focus on how key players in the segment exhibit distinct advantages. A discussion will follow on how the leading company achieves competitive advantage by means of their distinct competencies and whether they can sustain it over time. The chosen industry for this report is the retail industry, specifically the discount merchandiser segment. The key companies discussed in this paper will be Costco and Wal-Mart, two of the biggest discount merchandisers in the USA. While Costco and Wal-Mart operate under two very separate business models, they carry similar products and compete in similar geographical areas. The life cycle stage of this industry is in the mature stage where the market is now saturated with notable players aside from the two mentioned. Growth in this market is demonstrated by expanding into different geographic and other markets to increase their overall market shares. Under the maturity life stage, minimizing cost and expansion into different segments can develop a competitive advantage over other big box retailer competitors. Currently, Wal-Mart is the industrial and segment leader because of its ability to minimize their expenses and expand quickly in global and online markets. Wal-Mart Wal-Mart is a mass-market retailer operating in three segments: Wal-Mart USA, Wal-Mart...
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...added or removed from inventory items on hand either decrease or increase in number. This paper will review inventory systems within Starbucks, Wal- Mart, Dell, Arby’s, and Starbucks. The paper will also provide information regarding the success of the inventory systems and if the companies are happy with the current systems. Businesses and Inventory Systems Dell is a leading global software company that manufactures desktop computers, notebook computers, network servers, work stations, and storage products. Dell uses the Just-In Time inventory system. Just-In-Time means a company can receive raw materials just in time to go into production and complete and assemble manufacturing parts just in time to ship to customers (Accounting 4 Management, 2012). The advantages of the Just-In-Time system are that it permits Dell to reduce overhead and have certainty that products are available. The Just –In-Time inventory system reduces the cost of doing business. For example, Dell does not have to spend an enormous amount of funds on the cost of warehouse storage and the customer receives the benefit of lower cost for products. The company has a high satisfaction rating because of their ability to produce products at a fast rate. The challenge includes the possibility of the company not receiving the products from suppliers on time. This can cause a delay in shipping of Dell products to its customers. Dell is happy and will continue the current inventory system because of cost savings...
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...Supply Chain Management Case: Seven-Eleven Japan Co. 1 Responsiveness * In general, a convenience store supply chain has three ways of being responsive: 1.1 In-Store Capacity * Integrating cooking equipment inside the stores will match supply and demand for warm dishes. The process of cooking and assembling the food will be moved after the customer order arrives (i.e. pull process) reacting directly to consumers demand. This shift implies a decentralization of the supply chain hence, requiring higher costs and poorer utilization (i.e. efficiency loss). Furthermore, training costs incur since employees at the stores need to run the machines. 1.2 Local Inventory Keeping stock holdings high at the store also is a way of being responsive and offering a high service level. Although this allows for the centralization of cooking equipment, extra space is needed and the efficiency of the supply chain is contingent on the correct forecast of demand thus, creating idle inventory or even wasted inventory if the products are perishable when demand deviates from the inventory level. 1.3 Rapid Replenishment This approach is used by Seven-Eleven. High delivery frequency sets a high responsiveness at the store but increases delivery costs. Furthermore, it keeps the absolute number of inventory items needed to run the store low (i.e. stores are can be smaller than if local inventory was build up), even though the store capacity usage is high. Rapid replenishment also leads to...
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...Apple 1.Supply Management Model Apple gains a massive competitive advantage mainly due to its operational excellence. To abbreviate, it is Apple’s control over the whole supply chain, from designers to suppliers, from logistics to retail stores, that made Apple’s products popular and profitable. Apple’s designers work close to its suppliers and manufacturers, optimizing the old product lines to gain production competence at the very beginning. Apple then makes a great deal investments to suppliers and orders a high volume, so that it can earn stable production and low prices. By aligning with the suppliers, Apple not only gains high profit margin, but also handicap its competitors. As for the logistics, Apple also exerts control over carriers by making massive orders to gain lower cost. Electronic monitors and employees are used to account for every unit. Finally, at retail stores, Apple keeps tracking of the demand by day and adjusts its production accordingly. 2.Strengths and weakness, and potential risks Apple’s strength of the supply management model is rooted in its close alignment with its business strategy. Its creative supply management functions as a drive to its innovation for a decade. The strong control Apple exerts over the supply chain brings it agility from design to retail stores. Meanwhile, Apple earns bargaining power with suppliers by volume. This advantage makes Apple competitive because with a lower price quote from suppliers, it could lower the price...
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...BEIHANG UNIVERSITY 北京航空航天大学 SCHOOL OF ECONOMICS AND MANAGEMENT 经济管理学院 SUPPLY CHAIN MANAGEMENT ASSIGNMENT 1 “Supply Chain Management of Wal-Mart” Professor: ZHAO QUIHONG Student: NGUYEN HAI YEN - LS 1508256 VU THI THU HIEN - LS 1508226 GANTA. MURALI - LS 1508233 NGUYEN KHANH LINH - LS 1508230 NGUYEN THI THU HIEN - LS 1508257 INTRODUCTION Wal - mart was founded in 1962 by Sam Walton in Rogers, Ark. It is an American multinational retail corporation that runs chains of large discount department stores and warehouse stores. Almost everything can be found in Wal-Mart stores and it has everything a homemaker can ever think of. It is arguably the largest retail chain that deals with millions of product ranging from furnitures, clothes, groceries, books, movies, electronic, jewelries, baby products and much more. In the 1960s through the 1970s, companies realized strong engineering, design, and manufacturing functions were strong market strategy keys to create and capture customer loyalty. As the demand for new products rose in the 1980s, these market requirements were to increase their flexibility and responsiveness to adapt existing products and processes or to develop new ones in order to meet customer needs. As manufacturing improved in the 1990s, managers began noticing material and service inputs involving suppliers and their major impact on an organization‘s ability to meet customer needs. As a result of these changes, organizations...
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...MGMT90026 Supply Chain Management Group Assignment Dr. Vikram Bhakoo Class: Tuesday 6:15-9:15 MGMT90026 Supply Chain Management Group Assignment Dr. Vikram Bhakoo Class: Tuesday 6:15-9:15 By: Widad Alharthi 822694 Di Cao Wasinee Phornnarit Yang Chan By: Widad Alharthi 822694 Di Cao Wasinee Phornnarit Yang Chan Table of Contents Introduction: 2 1. Supply Chain Management Practices 4 1.1 Walmart 4 1.1.1 Strategic allignemnt 4 1.1.2 procurement and distribution 5 1.1.3 Logistic and distribution management 5 1.1.4 Inventory management 6 1.2 Amazon 8 2. Strategic Alliances 9 2.1 Walmart 9 2.2 Amazon 10 3. Technologies employed in the SC Network 11 3.1 Walmart 11 3.2 amazon 13 4. Challenges and risks 14 4.1 Walmart 14 4.2 Amazon 15 5. Comparison of sustainable strategies in Supply Chains 16 conclusion 17 References: 18 Appendices: 19 Section A: 19 Section B: 19 Section C: 20 Introduction: Executive summary: This report provides an analysis and evaluation of the current supply chain strategies employed by two leading retail corporates, Walmart and Amazon. The report draws attention to the following aspects; supply chain management practices, strategic alliances, Information Technology, challenges and risks,finally sustainability in the supply chain. Method of the analysis includes reviewing a collection academic journals from different databases, analysing company’s...
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...CASE STUDY Professor: Dr. Mary Flannery Teaching Assistant: Jia-Yuh Chen ECON 136 – Business Strategy February 27, 2006 INDUSTRY ANALYSIS The retail industry is dominated by few retail giants, with Wal-Mart competing in several retail categories. Wal-Mart competes against Kmart and Target in the general merchandise retailing; against Costco in the warehouse club segment; and against Kroger, Albertson’s and Safeway in the supermarket retailing. Competition among retailers centers on pricing, store location, variations in store format and merchandise mix, store size, shopping atmosphere, and image with shoppers. Further analysis provided by the following figure diagnoses the competitive environment of the retail industry. Five Forces Model of Competition Threat of Substitute Products Weak: Substitutes for big box retailers are smaller grocery stores; substitutes are higher priced relative to the performance they deliver. Supplier Bargaining Power Weak: Industry members account for a big fraction of suppliers’ total sales and continued high volume purchases are important to the wellbeing of suppliers. Rivalry among Competing Sellers Fierce: Competing sellers have triggered heated price competition and are active in making fresh moves to improve market standing and business performance. Buyer Bargaining Power Weak: There is a broad base of buyers so no single buyer can demand price concessions; buyers purchase merchandise in small quantities; buyer loyalty for...
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...INTRODUCTION Wal-Mart Stores, Inc. branded as Wal-Mart, is an American multinational retailer corporation that runs chains of large discount department stores and warehouse stores. Wal-Mart is a retail giant. This company is the third largest public corporation in the world. Website link to the selected company, www.wallmart.com Background: Sam Walton, a businessman from Arkansas, began his retail career when he started work on June 3, 1940, at a J. C. Penney store in Des Moines, Iowa where he remained for 18 months. In 1945, he met Butler Brothers, a regional retailer that owned a chain of variety stores called Ben Franklin and that offered him one in Newport, Arkansas [1]. Walton was extremely successful in running the store in Newport, far exceeding expectations [2] .However, when the lease came up for renewal, Walton could neither come to agreement on the existing store's lease renewal nor find a new location in Newport. Instead, he opened a new Ben Franklin franchise in Bentonville, Arkansas, but called it "Walton's Five and Dime." There, he achieved higher sales volume by marking up slightly less than most competitors [3]. On July 2, 1962, Walton opened the first Wal-Mart Discount City store located at 719 Walnut Ave. in Rogers, Arkansas. The building is now occupied by a hardware store and an antique mall. Within five years, the company expanded to 24 stores across Arkansas and reached $12.6 million in sales [4]. In 1968, it opened its first stores outside...
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...in past periods. The founder, Sam Walton, began to design his stores in 1962 to the have everyday low pricing (EDLP) method, opposed to the popular at the time hi-lo pricing. Lucky for Walton, throughout the late 1900s there was a great trend in discount retailing—buying in bulk at a lower price, which EDLP catered to, making Wal-Mart the leading retailer. The firm also strides itself on its efficient strategies in its supply chain, especially within the distribution system. Throughout the past decade, however, there have been other trends, like online shopping, which have resulted in Wal-Mart’s decline. The firm’s stock price had been growing significantly, except in the past 10 years it has been flat—ranging from $45-$55, whereas its competitors’ stocks have kept increasing. This has made many shareholders, including James Neuhausen, a stock analyst, question the firm’s worth and its potential in years to come. When looking at Wal-Mart and its worth, it is important to have an entire overview of the firm, and really analyze the supply chain management installed at the company. First, the EDLP strategy has worked to put Wal-Mart at a competitive advantage over others in the retail industry. EDLP makes the operational costs as low as possible, increasing volumes of items sold, which generate higher aggregate gross profit. After competitors noticed the discount retailing trend and Wal-Mart’s success, they started copying Wal-Mart’s pricing strategy. Wal-Mart still led...
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...Supply Chain Management: Food (Pineapples and Plantains) Chestnut Hill Farms Table of Contents I. Major manufacturers/producers or service providers for pineapples and plantains II. Total output worldwide regarding pineapples and plantains – divided by countries. III. The import export statistics to show major producers and major consumers for pineapples and plantains IV. Local manufacturer Chestnut Hill Farms: vendors/suppliers, distributors, wholesalers and retailers. V. Pineapple and plantain flowchart (vertical integration) VI. Discuss major problems and issues in the pineapple and plantain supply chain VII. Include, suggestions, if any, for making improvements regarding the pineapple and plantain supply chain I. Major manufacturers/producers or service providers for pineapples and plantains Today many countries have become pineapple producers, making the fruit production grow over 400% since 1960. Then again, a rise of 50% was seen after the introduction of what they call the “Gold” variety, developed in the 1990s by Fresh Del Monte. Pineapple consumption has double in last 10 years, making the industry grow into a more complex chain. Other major fruit product today is plantains, which production has grown over 60% in the last 30 years. Plantains have become a major part of food in Central and West Africa, and in other regions such as the Caribbean Islands, South, and Central America. As comsuption for both fruits have...
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...tracking: Radio Frequency Identification (RFID). Introduction A typical concern of all retail establishments is maximizing profits while maintaining customer loyalty. Now where this is more of a concern than with the Big-Box stores such as, Target and Wal-Mart in the United States. These stores offer a wide variety of goods and provide a “one-stop” shopping experience for their customers. The challenge for the store is to provide the variety and availability of merchandise without the high cost of inventory storage and over-stocking. Consequently, the goal is to have the merchandise available to their customers, “just in time” for them to make the purchase. These stores have a greater challenge than the warehouse club stores such as Costco and Sam’s Club because they require their members to buy in quantity. This paper will focus on the special problem that non-warehouse club stores encounter in selling smaller quantities and describe the “just in time” philosophy and how it is applied in today’s retail industry. A case history of how Wal-Mart is applying this approach to their operation and some of their implementation challenges. Addressing these challenges, suggestions and recommendations on how this approach can be successfully implemented will be provided. Background The “just in time” strategy was first introduced by Toyota to manage their production process and keep the inventory moving at just the right pace in order to have cars available just in time for...
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...Aligning Supply Chain Strategies with Product Uncertainties Hau L. Lee upply chain management has emerged as one of the major areas for companies to gain a competitive edge. Managing supply chains effectively is a complex and challenging task, due to the current business trends of expanding product variety, short product life cycle, increasing outsourcing, globalization of businesses, and continuous advances in information technology. The Internet has contributed to both the increasing needs and opportunities for improved supply chain management. With the Internet, companies in a supply chain can be connected in real time with information and knowledge shared continuously, new products and services can be designed to fit special market segments, and new supply chain structures can be developed to serve customers in a more direct manner. S When a company faces the pressure of excessive inventory, degraded customer service, escalating costs and declining profits, or a poor return on assets, its supply chain is out of control. On the other hand, when a company moves in to new markets or new technologies, it must have its supply chain prepared for the new business challenges and opportunities. Although there are many new supply chain concepts and fads designed to exploit the advantages of the Internet, successful companies understand that the right supply chain strategy is dependent on a number of factors: ▪ The strategy needs to be tailored to meet specific...
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...[;’p// Walmart Case Study: Half a Century of Supply Chain Management SCM 607 Dr. John Wu March 15, 2014 Table of Contents INTRODUCTION 4 BACKGROUND OF THE COMPANY 4 GOALS AND OBJECTIVES 5 KEY ISSUES 6 EXTERNAL ANALYSIS 7 Economy 8 Customer Behavior 8 Technology 8 Politics & Legal Aspects 8 INTERNAL ANALYSIS 9 Company Culture 9 Operations 9 Purchasing & Suppliers 10 Inventory 10 Logistics 10 SWOT ANALYSIS 11 Strengths 11 Procurement 11 Distribution 12 Store Network 12 Information Systems 13 Weaknesses 14 Procurement 14 Store Network 14 Human Resources 14 Focusing on the Supply Chain 14 Opportunities 15 Focusing on the Supply Chain 15 New Initiatives and a Reorganization 15 Threats 16 Human Resources 16 DECISIONS 17 CONCLUSION 18 EXHIBIT 3 19 EXHIBIT 3 (continued) 20 EXHIBIT 3 (continued) 21 EXHIBIT 5 22 REFERENCES 23 Walmart Case Study: Half a Century of Supply Chain Management INTRODUCTION Walmart dominates the retailing industry in terms of its sales revenue, its customer base, and its ability to drive down costs and deliver good value to its customers. After all, the world’s largest corporation, employing 1.8 million associates worldwide, takes pride in having received numerous accolades for its ability to continuously improve efficiency in the supply chain while meeting its corporate mandate of offering customers everyday low prices. Walmart demonstrates how a physical product retailer...
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... Written by: Haolin Li(ID:1207710), Jing Zhao(ID:1210347) Words : 1617 Specialty Food and Beverage company (SF), which founded in 2004 in Denmark, mainly covers foods and beverage, restaurants and hotel area. Recent years, the company had faced several problems which lead SF to an embarrassing situation. This assignment will introduce SF’s current issues, analyze the decision and then discuss the solution way which chose by SF’s high level management team. Tim Casey, the owner also the operator of SF, has made an extraordinary forward for the company business in 1992. He used over fifteen years to arise the company revenues from $1 million to $25 million mark, successfully opening business markets for the company and transfer them to the permanent customers. As a growing business, there were lots of troubles start showing and many business competitors appear to share the market, which would give the retailers more pressures and force them to choose another cooperator. The supply chain of the company is complicated and sensitive. The company gets the primarily tea from the Asia countries, such as China and India, which could make the company gets higher amount of tea with lower price. In contrast, this will costs extra time transfer tea products to the packing firm in delivery process . As Nepal stated that “ With annual production of 1,640,310 metric tonnes annually, only 299,789 metric tons, worth $965,080,000, are exported in the international...
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...Wal-Mart Principles of Management Introduction Wal-Mart (Wal-Mart Stores, Inc.) is currently ranked not only as America’s largest, but also as the world’s largest company (Soderquist, 2005). The store’s three business segments, Wal-Mart International, Wal-Mart Stores and Sam’s Club all operate in discount retail industry. Currently Wal-Mart’s leadership is facing challenging issues including an invariable customer base, a declining same store base and a crumbling reputation. However, Wal-Mart’s history is a living example of innovative and successful leadership. The company started with a single store in 1962, in Rogers, Arkansas and it has grown into what is now regarded as the world’s largest retailer. Wal-Mart runs each store with the products stocked in the store, to the front-end equipments, helping to speed up checkouts. Using the same philosophy in all its stores to provide low prices and superior customer service, Wal-Mart can sell at low prices and thus eliminate expenses associated with frequent sales promotions as well as have predictable sales. Wal-Mart has invented its own unique inventory system, the cross-docking system that has enabled the company to achieve economies of scale, thus reducing the cost of sales. In this system, goods are continually delivered to Wal-Mart’s stores within 48 hours and without the store having to inventory them. This allows the stores to replenish their shelves four times faster than...
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