Wal-Mart Negotiations with Suppliers

Wal-Mart Negotiations with Suppliers

Introduction

Wal-Mart operates in several international markets, but these are the United Kingdom, Canada, Japan, Mexico, Brazil and China. The company sells a number of retail goods and services at low prices. This product range includes both national and private- brand manufacturers. These distribution centers primarily serve the operating segment called Wal-Mart Store. In addition, these centers are also the distribution of supplies from Sam Club perishable items, jewelry, tires, and the product returned. Wal-Mart establishes a customer relationship depending on self-service and automated and towards co-creation of some products once it is possible (Basker, 2007).

Wal-Mart tends to reach the mass market toward mass customization. Wal-Mart's customers can be divided into three groups: “brand aspirations”, people with low incomes who obsessed with brand; “price-sensitive effluents” wealthier shoppers who love deals; and finally “value-price shoppers” who like low prices and cannot afford much more. Wal-Mart's technological edge is in its inventory control, logistics, and distribution. The ability to move products place to place quickly and efficiently keeps the costs down as well as the time system in combination with logistics force permits Wal-Mart to have accurate time information of products to the stores shelves that allow restocking automatically (Basker, 2007). Wal-Mart's core competitive advantage is that delivers the lowest possible price and its business strategy aligned with this advantage, based on cost leadership. Its wholesaler Business Models supports this strategy, all elements focused on using the least amount possible of resources, always looking into how to improve performance and effectiveness.

The sole purpose of a business is to generate profits so that the shareholders' wealth can be maximized. In order to stay productive, the management has to effectively manage all the resources of an organization. This can be achieved by negotiating internally and externally; internally with the employees and externally with suppliers and shareholders. It has to maintain good relationships with all of its stakeholders that mainly include suppliers, customers, shareholders and employees. The relationship with suppliers has to be maintained with good terms and conditions as they are the backbone for a Wal-Mart's production department (Briers, 1999, 2). The quality of the finished goods entirely depends upon the quality of the raw material that is provided by the suppliers. The organization has to keep a constant check over the supplies so that defective material could be extracted out from the line. The organization has to make sure that the suppliers are meeting their goals. Most of the organizations have placed a metrics system to evaluate the performance of the suppliers.

Discussions

Components of Supply Chain

Production

Production is a significant aspect of Wall mart's supply chain decision regarding the focus on customer needs, capacity, quality and market demand. There are some issue that the company may face in the production of goods such as changes in taste and customer choice, new technology, and quality of raw material. To cope with this problem, Wal-Mart conducts surveys and gets continuous feedback from the customers so to effectively oversee the changing production demand ...