Walmart Case Study

MBA 8155 Operations Management

Spring 2019

CASE STUDY ONE – WALMART

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1. Create a Positioning Map for the Market Walmart Serves:

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1. Describe Porters Five Forces with respect to Walmart (Low, Medium, High) and why:

New entrants (Low)

• Moderate cost of distribution system and supply chain
• Moderate capital costs
• Require a lot of financial/human resource investment and time
• Economies of scales and brand development creates barriers

Competition (High)

• Large number of firms in the retail market
• Many firms with different sizes competing
• Major competitors: Costco, Best Buy, Amazon, Target, Dollar Tree, Macy

Customers (Low)

• Large population of buyers
• High diversity of buyers
• Individual buyers usually make small purchase
• High switching cost (Walmart’s lowest pricing strategy)

Suppliers (Low):

• Large number of suppliers in the retail market
• Tough competition among suppliers gives low switching costs for Walmart
• Walmart makes large purchases, giving it significant buying power over suppliers.

Threats of Substitutes (Low)

• Moderate availability of substitutes (Costco, Target, Best Buy)
• Higher cost of substitutes (not many retailers offering prices as low as Walmart)
• Walmart offers a wide range of products, which also reduces the threats of substitutes

1.  List Walmart’s Order Qualifier, Winner, Delight and create a Polar Diagram:

Order Qualifiers:

• Reasonable quality
• Accessible to customers: parking lots, convenient locations
• Keep the shelves full of products (In stock/ Available)
• Maintaining a broad selection of brands and product types
• Customer service
• Good employee’s attitude (helpful)
• Organized store layout with clear direction

Order Winners:

• Location near the customers with a huge number of stores
• 24/7 shopping

Delight:

• Every Day Low Pricing

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