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Question: 1
Write the brief summary of the case study?
Answer:
Wal-supply Mart's chain management is widely regarded as one of the retail
industry's greatest logistical and operational accomplishments. More than 1.8
million employees work for the organization worldwide. Because of the supply
chain that the company's founder, Sam Walton, established in the building of this
retail marvel, it has constantly grown and operated profitably. Purchasing,
placement, and distribution, all of which are part of the supply chain, proved to be
significant contributions to the Walton's fortune. Eliminating intermediaries, such
as wholesalers and distributors, decreased Walton's administrative costs while also
giving him more control over his sources.
The firm benefited from the integration of Walton's transportation and distribution
methods in two ways: it kept operating expenses low by using non-unionized and
in-house drivers, and it used the transports to bring back unsold products. The
cheap pricing looked attractive and attainable to consumers in the region served by
the retailers because they were located in low-rent suburban communities.
Parties in supply chain and functions
The companies supply chain takes two forms, from the manufacturer to the
company’s stores, and from the stores to the customer. The parties to Wal-Mart’s
supply chain are:
Suppliers: they are manufactures who make different products that the company
stocks. They are supposed to honor an order and deliver products of the right
quality and quantity.
Customers: Wal-Mart supplies goods to customers who buy certain volume using
their trucks and when they are international customers they look for the best means
to deliver them, this includes sea and air transport.
Wal-Mart’s procurement department: the department is composed of heads of
different sections whom advice the head of procurement on their section’s demand,
both for inward and outwards logistics.
Freight section: this is transport/truck management section. The section is
mandated with the task of ensuring right numbers of trucks are maintained in the
company, they are operating well and allocates the right number of trucks to a

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department in need. Detailed flowchart or diagram of your companies supply chain
including domestic and Global. Wal-Mart has domestic and international supply
chain mechanisms.

Suppliers

Purchasing

Production

Distribution

Customers

Supply chain is managed

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of certain goods. After a sale at the cashier, a code records the sale in the main
database.
When any good gets into the company’s stores, it must go through the database
section for entering in the system. With such kind of management, Wal-marts
procurements managers at section levels and head office are able to manage their
stocks effectively.
Technological trends and its influence in Wal-Mart
According researches, there has been a 16% reduction in out-of-stocks since
Walmart introduced RFID technology into its supply chain. The researchers also
pointed out that the products using an electronic product code were replenished
three times as fast as items that only used barcode technology.
In addition, Walmart also networked its suppliers through computers. It entered
into collaboration with P&G for maintaining the inventory in its stores and built an
automated re-ordering system, which linked all computers between the P&G
factory through a satellite communication system. P&G then delivered the item
either to a Walmart distribution center or directly to the concerned stores.
And it’s not just high-tech innovation that Walmart innovates on: last year,
Walmart announced the trial of a new system to manage its stock, called Top
Stock, in which the top shelves are utilized for more storage, freeing up back
rooms. This move is designed to get products on the shelves sooner, creating more
space for fulfilling online delivery orders and allowing more visibility of stock
levels for both staff and customers. The move also means that customers don’t
have to wait to find a staff member to track down an item they don’t see on a shelf.
Walmart’s supply chain management strategy has provided the company with
several sustainable competitive advantages, including lower product costs, reduced
inventory carrying costs, improved in-store variety and selection, and highly
competitive pricing for the consumer. This strategy has helped Walmart become a
dominant force in a competitive global market. As technology evolves, Walmart
continues to focus on innovative processes and systems to improve its supply chain
and achieve greater efficiency

Question: 2

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Describe Wal-Mart’s supply chain and how it integrates with the
other elements in its strategy?
Answer:
Walmart has been a supply chain pioneer since its inception, most notably with its
use of satellites for transmission and cross dock storage. It has also pioneered
innovative methods, such as P&G's vendor-managed inventory. It has lately
advocated for the usage of RFID. This is an excellent description of some of the
things Walmart accomplishes by leveraging its size and incorporating new
technologies on a regular basis.
Supremacy in the Trade Market
Wal-main Mart's objective is to dominate the retail business. Sam Walton, the
firm's founder, established a retail philosophy that the company now embraces.
Wal-Mart is largely a bargain store, as its items are sold at the lowest feasible cost.
By selling for the "lowest possible price." The essence of effective discount
retailing, according to Walton, is to reduce the price of an item as much as
possible, minimizing the markup, and earning profit from the increased volume of
sales.
Development in the U.S. and International Markets
Wal-strategic Mart's objective is to grow. It has done so with great success. The
corporation's control and strength are plainly demonstrated by the facts and figures.
Currently, the company employs approximately 1.3 million people worldwide,
including one million in the United States alone. Over 4000 outlets are owned by
the corporation worldwide. There are around 1,200 units (stores) in operation
across the world. Wal-Mart is the largest retailer in the United States, employing
over a million people. There are nearly 3,000 stores and outlets, as well as 77
distribution sites, in the company. Every week, the corporation serves more than
100 million clients in all 50 states, Puerto Rico, and a number of other countries.

Branch Out into New Sectors of Retail

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The expansion of the corporation into new retailing areas has proven to be a
successful strategy. Wal-Mart has lately expanded its offerings to include a
pharmacy, an auto repair business, and now grocery sales. Wal-traditional Mart's
retail operation has been selling low-cost housewares and plastic items, as well as
clothes, athletic goods, and toys. Stationary and office supplies, hardware, home
renovation, paint supplies, arts and crafts, cosmetics and toiletries, shoes, books
and magazines, greeting cards, and confectionary are among the other divisions.
Wal-Mart now sells home electronics, automotive supplies, medications, jewelry,
photo framing, trip booking, and home gardening. With its new "Neighborhood
Markets," Wal-Mart has just entered the food store market. Everywhere the shop
has a section, it competes with firms that specialize in that industry, frequently
driving out smaller competitors.

Question: 3
Why has Wal-Mart not been as successful in Europe as it has in
North America?
Answer:
A lot of factors contributed to Wal-failure Mart's in Europe. Since its inception,
Wal-German Mart's branch has been beset by egregious management errors. The
following are some of Wal-German Mart's market errors.
 The loss has been mostly due to a lack of cultural awareness.
 Obtaining entry to the German market through an acquisition strategy.
 Failing to produce on its value proposition of "everyday low prices" and
"excellent service."
 Negative press for the company as a result of a breach of various German
rules and regulations.
Wal-Mart was also the first American company to enter the European market when
it purchased Wertkauf hypermarkets in January 1997. Later that year, Wal-Mart
purchased Inters par, a German hypermarket chain. The company's 1997
acquisition of the 21 Wertkaufstores was not its first, owing to the company's
increased profits, attractive sites, and experienced management. Wal-1998 Mart's
subsequent purchase with Bar for 74 super markets was widely seen as a poorly
and ill-advised decision for a variety of reasons. Due to its prevalence of run-down
stores of various sizes and layouts, the majority of which are situated in less

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wealthy inner-city residential districts, Spar is considered as the weak competitor
on the German market. Wal-Mart’s cultural insensitivity led to its failure in
Europe.
1) Specific Difference in German Consumer behavior and Culture in
comparison with US consumers:
Wal-Mart made the mistake of neglecting local culture and purchasing patterns
while putting an American in charge of its German business. Wal-Mart stores
appeal to customers who are eager to shop for an extended period of time.
However, shopping hours in Europe are shorter: on weekdays, shops close at 5
p.m., and on Sundays, there is no shopping. As a result, customers are less likely to
spend a significant amount of time going around a store seeking for the things they
desire.
In addition to this issue, German shoppers dislike being helped by Wal Mart's nice
store workers. Germans tend to shop for discounts on their own. Rather of learning
and adapting to its customers' cultures, Wal-Mart attempted to force its own culture
on them, which failed miserably.
Without having to ask the store clerk, Germans want to see the advertised bargain
items up front. This means that discount items must be displayed at eye level.
Instead, Wal-Mart adopted a US-style goods display approach, in which higher-
priced items are displayed at eye level and lower-priced items are displayed on
higher shelves or in the bottom racks. The German customers were irritated by this.
Wal-Mart also got its store inventory wrong, Wal-Mart stocked its store with
clothes, hardware, electronics and other non-food products were given much bigger
floor space than food products, and as a result more than 50% of the revenue was
from non-food products. But other German retailers stock more of food products.
For example for metro, food products constitute more than 75% of the revenue.
Germans prefer to bag groceries themselves into reusable carriers, or at least to pay
a small fee for the avoidable sin of needing a plastic bag.
German’s are introvert in nature and doesn’t like display of emotion in public, as
they always care for their private personal space. Employees, like the reserved
customers, didn’t care for Wal-Mart’s public displays of corporate moral such as
the morning cheer. The German Customer’s even didn’t liked to be accompanied
by the Cheerful employees either, as they would like to make choices by
themselves. These are cultural misunderstandings as well, but one could say the
cultural philosophy of Wal-Mart could not survive in the context of a German
culture with a Happy Planet Index significantly higher than America’s.

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2) Inefficient Top Management which ignored the relevance of local Culture:
It was evident that Wal-cultural Mart's insensitivity began with the company's
highest management. During the company's first four years of business, it selected
four CEOs. Rob Tiarks, an American expat who didn't comprehend Europe or its
culture, was the first head of German operations. He had previously overseen over
200 Supercenters in the United States. He was not just deafening English was
quickly declared the official corporate language at the management level due to his
refusal to learn the language. In addition, he overlooks the complexity and legal
structure of the German retail sector, as well as any strategic advice offered by
former Wertkauf executives. This has resulted in the resignation of top three
management executives from Wertkauf. His successors were also unsuccessful in
integrating German Outlets with the Wal Mart’s Business model and culture.
Other Reasons of Failure
Different business cultures, political clout, tough rivalry, and ineffective
management and marketing tactics were among the factors that contributed to Wal-
failure Mart's in Europe. To begin with, in 2004, Wal-CEO, Mart's David Wild,
considered that cultural disparities between American and German consumers
posed significant obstacles to the company. In 2006, Debby, the CEO, decided that,
unlike American customers, German buyers are accustomed to shopping at small
scale cheap retailers such as Aldi and Netto, which provide a restricted choice of
items with weekly special deals and minimal customer care. In addition to having a
diverse business culture, the battle between Wal-Mart and domestic merchants has
gotten increasingly fierce. The price difference has so lessened that sometimes
even Wal-Mart had a higher price than their competitors. Consequently, consumers
had little incentive to visit Wal-Mart Europe because of no obvious price
advantage.
Moreover, as per German legislation there were some specific retail related laws,
such as, limited legal working hours (80 hours/week) which were way less than the
other European countries and had strict rules governing closure on Sunday’s and
holidays. Wal-Mart repeatedly infringement German laws but were able to do
away with it mainly because of global presence and influence on the government of
US which played a major role in global politics. Some of incidences where the
company broke few laws and was able to get away are summed up below:
1. ‘Unfair trade’ practices such as selling goods below the cost price was
prohibited in Europe but Wal-Mart was found violating these laws as it
randomly sold some product below cost.

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 2. German law required a company to disclose its financial statements
annually, Wal-Mart seldom did that and was spared without any fine or legal
proceedings at number of occasions.
3. Obligatory Deposit Regulation’s law stipulated the retailer to provide
deposit-refund-system on few products like metal beverages, cans etc. But
Wal-Mart never followed this law.
Thus from the above incidences it can be concluded that Wal-Mart used its global
influence to refrain from some of the German laws.

Question: 4
How are Wal-Mart's problems with its supply chain related
to its global expansion?
Answer:
Walmart think tanks correctly recognized the necessity for globalization in the
early 1990s. Wal Mart needed to investigate markets outside of the United States in
order to develop in the future. There are three major causes for this: For starters,
Walmart determined that the United States' population accounts for only 4% of the
global population, limiting itself to a little slice of the pie. Second, even though it
was a tiny market, it had become saturated, and growth had slowed. Finally, some
experts feel that bargain retailing has a bigger promise in emerging nations. As
previously stated, Walmart's market expansion options in the United States are
becoming increasingly constrained. As a result, the corporation chose to begin its
global development in the early 2000s.
Beyond its massive home market, Walmart has a number of regional alternatives,
including expanding into Asia, Europe, and other Western Hemisphere nations.
Walmart, on the other hand, lacked the financial, organizational, and management
capabilities to pursue a number of nations and areas at the same time at the time.
Instead, Walmart opted to enter the market in a logical sequence that would allow
it to apply what it learned from its first forays to future ones. For the next few
years, Walmart has opted to concentrate on establishing a footprint in the
Americas, specifically Mexico, Brazil, Argentina, and Canada.
In 1991, Walmart began expanding into the foreign market; they began its
internationalization by entering the two nearest markets, Mexico and Canada. They
first chose to enter Mexico, a country where Walmart had a highly successful joint

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venture with Mexico's largest retailer, Cifra, to create Sam's Clubs in 1991 (Chain
Store Age, 2001), and then they chose to enter Canada through purchase in 1994.
Naturally, Canada and Mexico are the neighboring markets with the most favorable
business climates and the simplest entrance routes to the United States. Because
most Canadians reside near the US border, they have been familiar with the brand.
Canada is a mature market with considerable income and cultural parallels between
the US and Canadian markets. As a result, Wal-Mart had minimal need for fresh
training. Mexico and Canada are two excellent areas for Wal Mart to begin its
international expansion.
Wal-Mart, on the other hand, has plans to grow into the European and Asian
markets, but they acknowledge that the Asian markets, such as China and Japan,
are vastly different from the US market in terms of distance, entrance obstacles,
and cultural differences. Otherwise, the European retail industry was mature, which
meant that new entrants would have to take market share away from existing
competitors. However, there were some well-entrenched competitors in the
European market, such as Carrefour in France and Metro in Europe, who would
likely retaliate vigorously against new entrants, making Wal-expansion mart's
strategy difficult to implement.
Due to the fact that Wal-Mart is quite active when it comes to entering
international markets, Silverman (1999) claims that the process of joining another
country might be very difficult. For example, this company's efforts to penetrate
Argentina were not particularly effective as a consequence of social traditions in
this nation. This suggests that shoppers in Argentina do not embrace American
supermarkets, putting Wal-Mart in a difficult position. Wal-Mart had high
aspirations for transforming the cultural impacts of the people in Argentina in
1995, but they were not effective. According to Henderson (2006), an
organization's culture typically affects its success or failure.

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