International business management - Global supply chain

International business management - Global supply chain

International Strategies Adopted by Walmart

The supply chain management of a global company also has to be global. Walmart is a pioneer in determining the global supply chain trends. To begin with, the retail giant is coercing companies manufacturing in the US to shift their production units to oversees countries where they can get benefit of lower wages. In an interview with one of the Supply chain Managers at Walmart Gary Maxwell, he suggested that Walmart has shifted from world class supply management strategy to best-in-market supply chain strategy. The latter strategy means that the company has a customer centered approach (TrueDemand, 2012). It is always thinking of the customer's needs and wants and keeps tab on the external environment. This means that the company knows precisely when the market has matured and takes proactive actions to retain its margins.

The company has a policy of conducting a comprehensive market analysis. It examines the localities where it wants to open, studies the real estate cost structure, the policies and regulations that pertain to the business as per the host country, risk assessment and utilization of market. Also, the price structure of the market is decided based on market analysis and purchasing power of local target market (Workflow IQ, 2009).

This means that the global supply chain strategy of Walmart is not uniform in that the strategy in Japan is different from the strategy in India. While the company uses up to date technology, automated cranes, sortation systems and miniload systems in Japan for supply management, the system in India is largely dependent on forklifts and racks.

International business strategy through cost and responsiveness trade-off

The aforementioned challenges are being faced by Walmart in the Chinese market. To begin with, Walmart needs to understand how things work in the Chinese market. Even today business in the Chinese market is done on paper. This means that the cost of business will be higher, the approvals will take longer and the company will need excess manpower because of lack of automation. In addition, there will be high chances of human error for which the company will have to hire supervisors who look after the work that is delivered. However, there are other avenues through which the company can save on the costs (Quinn, 2009).

China is a promising market in terms of the size of the target market, their purchasing power and the demand for Walmart products. Walmart should adopt a strategy for Chinese and other likely markets whereby it should work in collaboration with other company in the form of joint venture. For instance, one of the major costs for walmart in the Chinese market is that of transportation (Reducing & Packaging, 2009). The company can cut down on the transportation costs significantly by working with logistics and transportation companies that are state owned. There are many companies for parcel, foreign freights and local transportation that can be signed a contract ...