Wal-Mart And Target's Business Strategy

The founder of Wal-Mart was Sam Walton. From the start he believed that introducing discount merchandising would be successful in small towns. Sam Walton wanted to build up his volume sales in very small towns and expand to metropolitan areas. He also recognized that the stores should offer brand name merchandise at discounted prices. The first Wal-Mart store was open in Rogers, Arkansas. Its original format was of a discount store. Walmart expanded slower than other discount retailers but after the year 2000, Wal-Mart has dramatically increased their number of stores and increased sales volume. Wal-Marts strategy of “everyday low prices,” their distribution logistics allowed them to cut costs. This was advantageous since in the 1960’s there

They also developed a better cost efficient delivery system. They were successful in shifting the risk of overproduction and late delivery to its suppliers. They achieved this by developing integrated solutions to their supply chain.
Wal-Mart is able to keep costs low and provide a great variety of products with excellent accuracy by anticipating their customer demand. They are great at getting their suppliers to conform to Wal-Marts way. Wal-Mart now uses a private distribution system that supplies all of their stores.
Wal-Marts main competitors are or have been K-Mart and Target. Target focuses on the middle class rather than the blue collar clientele. Target has mainly focused on metropolitan markets. They sell merchandise at low profit margins. Target has a main strategy of offering an upscale ambiance, for example, many Targets include a Starbucks Café. They focus on a more expensive, stylish and a higher quality of products. They tend to focus on a niche market of consumers that prefer the upscale discount store. Targets market strategy has led them not enter states without a high demographic with this personal preference. Target also has developed products that are Target private label which are advertised as gourmet and not a low priced

They have done an adequate job at identifying many of their limitations. To succeed in the e-market center they have increased the accuracy of anticipating consumer demand. They have developed a distribution system that is more efficient and provide fast delivery. They have reduced or eliminated middle man to keep costs down and improve their supply chain. They have shifted the risk of overproduction to its suppliers. To deal with customers expectations of fast delivery they have overhauled their distribution strategy. They now have a strategy of deciding how specific products move through their network. They determine what products to stock at different locations. They have purchased software which helps them automate and optimize shipments package size select of shipment method. One of the biggest ways they have prepared for the demands of e-commerce is to invest in technology to improve distribution flexibility. They have reduced the time that distribution centers have with merchandising activities. They have done this by incorporating RFID tags which reduce waste in the distribution process. RFID tags are implemented to avoid misplacement of products and the ability to trace products to their location. Walmarts investment with the purpose of increasing efficiency have enabled them to enter the e-commerce