Thesis: Value Chain Analysis of Wal-Mart

Sample Thesis Paper

Wal-Mart is considered to be the giant retailers of the world and Wal-Mart can be considered as an efficient example of value chain management in the retail sector. The traditional supply chain of retail flows from manufacturer to wholesaler and from wholesaler to retailer and finally to the customers. However, in Wal-Mart the chain flows from manufacturer to Wal-Mart and then Wal-Mart directly sells it to the customers. Their inbound logistics costs were of 2%-4% of their sales and distribution and logistics structures would cost 2-3% in cost savings. Similarly, their store rental costs were 2.2% of sales.

The best part of Wal-Mart is that they actually leverage the information technology infrastructure and this infrastructure was actually based on a combination of point-of-sales systems and a data warehouse was also included in it. This was included to help the suppliers to manage their products on Wal-Mart’s retail shelf and this would also allow the suppliers with up to date information about all the products that which products are selling at certain locations. Wal-Mart directly helps them to monitor and adjust the levels of inventory and this would easily reflect sales at a fine-level of granularity. This strategy helps Wal-Mart’s huge size and it enables the organization to demand massive discounts and rapid replacements. This can be considered as the core element of Wal-Mart’s competitive advantage in the retail market.

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