Wal-Mart case:

Why walmart is successful in US?

Walmart price lower and drive competitors out because they purchase
items in very large bulk. This reduces the total cost for them including
ordering costs. Walmart is successful because it sells products that
consumers want at low prices, satisfying customers' wants and needs.
Walmart's critics say that Walmart's lower prices draw customers away
from
smaller
Main
Street
businesses,
Second, Walmart is a big name and many firms want to have their
products in their store. Walmart forces these firms to lower prices as an
agreement to put the items in their store. This increases the quantity
demanded and allows a large total profit but a small marginal profit.
Value Proposition
Customers do not need to wait for sales to have the best deal possible .
Walmarts customers saves time and money. It follows principle Every
Day Low Prices .
Key Activities :
Purchasing Goods :
Their Delivery :
Total Cost Control
Inventory Control , Logistics and Distribution :
Ability to move products place toplace quickly and efficiently keeps the
costs down as well as the time time system in combination with logistics
force permits walmart to have accurate time information of the products
in stores shelves that allows restocking automatically.
Buy Supplier Relationship :
Supplies are considered close partners of Walmart. Part of Value chain of
each other and chance of accessing to a large market.
Best Supply Chain Management Process involves :
Demand Forecasting >Production Plan >Material Requirement Plan >
Vendor Selection > Placing Orders > Receiving materials > Immediate
issue to production from stores.

Walmart also follows the above best industry practices for SCM at minimal
Cost
Strategic Vendor Partnerships
Walmart embarked on strategic sourcing to find products at the best price
from suppliers who are in a position to ensure they can meet demand. The
company then establishes strategic partnerships with most of their
vendors, offering them the potential for long-term and high volume
purchases in exchange for the lowest possible prices.
Furthermore, Walmart streamlined supply chain management by
constructing communication and relationship networks with suppliers to
improve material flow with lower inventories. The network of global
suppliers, warehouses, and retail stores has been described as behaving
almost like a single firm.
Cross Docking As Inventory Tactic
Cross docking is a logistics practice that is the centrepiece of Walmarts
strategy to replenish inventory efficiently. It means the direct transfer of
products from inbound or outbound truck trailers without extra storage, by
unloading items from an incoming semi-trailer truck or railroad car and
loading these materials directly into outbound trucks, trailers, or rail cars
(and vice versa), with no storage in between.
Suppliers have been delivering products to Walmarts distribution centres
where the product is cross docked and then delivered to Walmart stores.
Cross docking keeps inventory and transportation costs down, reduces
transportation time, and eliminates inefficiencies.
Technology
Its state-of-the-art technology and network design allow Walmart to
accurately forecast demand, track and predict inventory levels, create
highly efficient transportation routes, and manage customer relationships
and service response logistics.
Suppliers and manufacturers within the supply chain synchronize their
demand projections under a collaborative planning, forecasting and
replenishment scheme, and every link in the chain is connected through
technology that includes a central database, store-level point-of-sale
systems, and a satellite network.
Walmart Failure in China

The retailer has had problems in understanding discerning Chinese

consumers as their buying decisions arent always price driven. They are
more inclined towards tailor-made products and a shopping environment
that reflects local preferences. Wal-Mart China contributes only around 2%
to the companys overall revenues, which is surprising considering that
China is one of the fastest growing retail markets in the world.
In China, in order to protect the interests of state monopolies, sectors
such as energy, heavy industry, chemicals and communications, have
high barriers to entry and are often showing high profitability. There is
little space left for small and medium enterprises (SMEs) and the private
enterprises and cut throat competition results when too many companies
try to grab the remaining limited opportunities.
There are government regulations: continued government involvement in
the market in a developing market economy creates greater government
ability to obtain income.

Can Wal-Mart sustain its competitive advantage in global retailing?

Domestically, Wal-Mart is growing through its Superstores. Traditionally,
this business is a very low-margin space, but with Wal-Mart's competitive
advantages in distribution and leverage over suppliers, they can make it a
big winner. International expansion has been robust and will continue to
be an important part of Wal-Mart's future growth opportunities. Certainly
the Internet provides a growth avenue as well that will open a new faucet
for them to potentially take over an upcoming market. Importance of
selling only brand-name merchandise to the Wal-Mart strategy. The focus
that Wal-Mart shares in all advertisements is service, low prices, and
quality of goods. Wal-Mart is not a specialty shop focusing on one good,
they are innovative offering a selection based on consumers overall
needs. They do have some brand name merchandise however do not have
a specific section set aside for Polo Shirts. Unlike Wal-Mart, brand name
stores in most circumstances, only offer their product at a price that is
normally above affordable. These retailers rely on their name to sell; WalMart relies on their convenience and low prices.
Challenges in Chinas retail market
It currently seems that the opportunities envisioned by looking at Chinas
high growth market, uprising middle class and still unexplored markets are
being undermined by the serious challenges this market entails. Following
is a brief description of some of those challenges.
Diverse population the Chinese people experience some huge
differences in income, depending on their employment and social status,
province they live in, and whether theyre from an urban or a rural place.
Some of the population is very poor and perhaps have different
purchasing habits that pose new if not impossible challenges for retailers.
Too many players the China retail market is now exploding. Foreign
companies in the market enjoy relatively strong liquidity and international
backing while local companies have an advantage in their in-depth

knowledge of the local market, being very quick to adapt and establish
wide spread and cheap distribution systems.
Local protectionism - Local governments are always following directions
given by central government. There seems to be a strong local bias
against foreign companies and for local and state-owned companies. State
regulations against it are rarely enforced. Backward infrastructure infrastructure is lacking and costly roads are still not up to modern
standards and are usually toll-based, distribution from port to destination
by rail extremely slow and often require overnight storages.
IT communications still far behind in most areas on both speed and
connectivity. Regulatory restrictions and bureaucracy at the beginning confining growth to 3 stored per city, and only a few cities in southern
China. Government had to approve each branch. Walmart abided to
regulations while competitors bended those. Employees relatively
unsatisfied, high turnover, low pay could not be compensated by stocks,
Chinas mandatory labour union relatively more hostile towards foreign
brands, especially Walmart.

Walmart needs to adjust to the Chinese market, while leveraging its

source of competitive advantage. This requires a delicate balance. At the
US, the brand Walmart is associated with low price rather than quality. In
China, where everyone is going for low prices and providing low quality to
do so, Walmarts own brand could be an assurance for low prices but with
quality by making the Walmart name about more than just retailing. The
suggested strategy in the 2008 Walmart supplier meetings shows that its
heading in that direction (Business Week). This also follows Gomes
strategy of renaming its suppliers to their own brand (Business Week), but
goes beyond it as the foreign brand in China is already associated with
higher reliability and quality assurance.

This actually holds true in China were retailers do a better job of enforcing
supplier quality than the local regulations. With that, Walmart is still able
to use its expertise and knowledge in supplier negotiation and distribution
system to keep costs down. Although Walmart is a Joint-Venture, the
sources do not mention any attempt to leverage the local partner to meet
the local market, which seems the opposite to some other joint ventures
discussed like Danone and Wahaha. Working together with the local

partner to understand where and how the local regulations can be used or
adjusted for Walmarts success and gaining a stronger hold of the
potential customers heart might help Walmarts growth and dominance in
the Chinese market (The Economist).

Chinese lifestyle trends Chinese consumer habits needed to be kept in

mind as the Chinese consumers go shopping to get out of the house, not
necessarily to shop. Theyre more impulse driven and like on-site
promotions. Theyre brand conscious but not loyal. Theyre frequent
shopper of small amounts and especially appreciate freshness (alive) due
to limited space at home (The McKinsey Quarterly). This seems a bit off
the original Walmart strategy and so Walmarts needs to go deeper in
trying to understand who the consumers are and what theyre looking for
(How to Market to Asias Masses). Following those characteristics it
might be more relevant to focus on the shopping experience and
salesperson fleet using aggressive promotion methods. A bigger number
of smaller shops with a more of wet-market feeling might be more to the
local taste than the American style shops. (CCRRCA)
Last, the strong centralization that has helped the American Walmart
seems to hold back Walmart in China. China is less homogeneous than
America and that calls for decentralization, giving more power to local
managers and their supplier-network or perhaps even moving to
franchising in some of the more remote locations (Bringing best practice
to China, The McKinsey Quarterl

DABBAWALAS CASE STUDY

What are the main learnings of the case?
The dabbawalas carry tiffin for the employeesehich contains two main committees of
the contractors who run the business.from the case we can learn why the tiffin
carrying service has been successful in Mumbai
Following are learnings of case
Understanding the logistical system that can survive due to the culture in
various places

How can human resource management used in this field

Flat hierarchy of the dabbawalas and how well they deliver the services
How the food is delievered and what are the other things involved in tis
service

What team and inter-team processes are reflected in the

operation of the dabbawala system?
The essence of this whole system is the trust that is there between the
employees and the contractors
There are two commitees:

The Mandal committee

The Trust committee

It is mostly flat hierarchy

5000 workers called carriers

800 supervisers
11 members in the mandal committee
In total there are 5800 members in this system

The inter team process is between the carriers and the delivery address:
Carrier will pick up tiffin at 10 am labels the essentials about where
it is to be reaches
Special carriers are those who take up area wise service
All the tiffins are taken to the railway station where another carrier
arranges them and puts them on a 2.5 m long wooden cart carrying
upto 40 tiffins at a time
After that he ascends the train and reaches specific destinations
where another carrier collects them at different places
This carrier who picks up the tiffin will deliver it to the office of the
customer
The tiffinns are collected later and the same chain is repeated
backwards

How has dabbawala system responded to the changing context of

the life of office- goers in Mumbai?
The dabbawalas main feature is the trust that runs along in their
system.employees who go for work cant of return back for having
lunch .and hence they miss their home food and had to spend

unnecessary money eating outside food.Dabbawlas are giving the

employees what they want at the right time HOME MADE FOOD.it helps
them in saving lot of money and also save wastage of time.
Which behaviourial sciences are relevant for understanding the
dynamics of the dabbawala system?

PSYCHOLOGY: Although all the workers are not educated, their

main motto is same i.e. customer satisfaction the trust and the
behavioural science is the reason why the dabbawalas are
successful in their work
SOCIOLOGY:This behavioural science is depicted in the
management and time management and the punctuality that
dabbawalas have. The way they carry out all the work given is all
through simple communication and labels that are stick to the
tiffins .the trust and the punctuality are the reasons for the success

External Internal

of dabbawalas

Positive

Negative

Strengths:

Weaknesses:

Perfect time management

No fuel Costs
No dependency on technology

Opportunities:

Threats:

Low operational cost gives the

opportunity of expanding and
maximizing the benefits.

Low literacy in Workers

High dependency on public
transport
Fast food free delivery chains
coming up
Adverse weather Conditions