STRATEGIC MARKETING

Strategic Marketing



INTRODUCTION

Wal-Mart, a discount store was founded in 1962 by the Walton family and opened the first outlet in Arkansas. Wal-Mart store was initially constructed as warehouse like store which housed everything from apparel to automotive supplies to small appliances at very low prices which allowed the company to cater to the masses. In today's day and age Wal-Mart's annual sales now exceed $288 billion more than 1.7 times the sales of its main competitor Target, Sears, JCPenney, and Costco put together, therefore making it the world's largest company. (Bergsteiner, 2011).

Discussion

Moreover, the Company now is well established in larger cities and has tapped into the international market, where it is gained popularity and is expanding on a rapid pace. Wal-Mart is a globalized company with more than 2 million associates worldwide and nearly 7000 stores and wholesale clubs across 13 countries in the world. Their mission statement is “Lower the world's cost of living” as it is conservatively dedicated to its value proposition of “Always Low Prices, Always” which means that things can be attainted under lower prices too.. They believe that everyone is entitled to some sort of luxury. That is why they carefully segment the market and therefore, target those who need the most, offering them a larger variety of things under one roof.

However, the company has competitors spread almost all over the world. The companiy's fierce competitors includes department stores like Kmart, Target which are based in America, ShopKo and Meijer, Canada's Zellers, Hart the Real Canadian Superstore and Giant Tiger, and Mexico's Commercial Mexicana and Soriano. Moreover, many small time retailers, mostly one dollar stores, which were successful able to find a small space in the niche market and compete successfully against Wal-Mart for home consumer sales. The company also faced fierce competition in some foreign markets such as in Germany it had captured just 2% of German food market following its entry into the market in 1997 and remained "a secondary player" behind Aldi with a 20% share. Wal-Mart is the number one seller in multiple categories of consumer products, including groceries, toys, CDs, and pet-care, 30% of the hair-care products, 26% of the toothpaste, and 20% of the pet food . And now most recently, they have ventured out in whole foods as well, which allowed them to tap into another section of the market they were already catering too. (Zhu, 2010).

Moreover, key part of Wal-Mart's competitive advantage is its relationship with its suppliers. Wal-Mart has made specific supplier choices along the way that are geared towards minimizing costs and maximizing efficiency. By doing this they were able to saved money from 3-4% and started buying from centralized head quarters to cut costs. Through latest technology they are able to communicate with their 3,600 vendors for order, forecasting, planning and transferring electronic funds. For the large key suppliers, Wal-Mart ships all the products itself, so it can avoid paying logistics. All of these activities are aligned with maximizing revenues ...