How Wal-Mart became no 1 in Retail

M G Singh By M G Singh, 12th Oct 2015 | Follow this author | RSS Feed | Short URL http://nut.bz/115nutoi/
Posted in Wikinut>News>Business

Walmart is the No 1 retailer in the world and from Japan to USA it hold sway. This is because a dedicated retail policy based on the satisfaction of the consumer.

Wal-Mart is a Lesson to Others

Wal-Mart is the top retailer in the world. It has moved far ahead of its competitors in both sales and global reach. Wal-Mart started its ascendancy from its policy in the retail trade.
Some of the reasons Wal-Mart went ahead of its competitors was the excellent use of logistics to replenish and transport merchandise. The system is called “cross-docking”. Basically this concerned the transportation of goods. These goods were delivered uninterruptedly to Wal- Mart’s warehouse. After delivery to the warehouse these goods were then dispatched to stores. This quick dispatch of goods resulted in keeping the goods inventory at almost zero.

This was a very significant step as it meant that Wal-Mart safeguarded itself from the risk of cost(s) associated with items / goods being damaged or becoming obsolete. This was a tradeoff between having goods sit in the inventory on one hand and having the same goods available for sale to be converted into cash. This has direct relation to the Cost of Goods Sold (COGS). The significance of logistics cannot be underrated with 158 distribution centers and a fleet of 6,500 tractors, 55,000 trailers and more than 7,000 drivers, the retail giant was on its way to capturing the market .This was part of a massive supply chain which has no rival.

The second aspect of the rise of Wal-Mart was its spread to outlying areas and remote areas which had been ignored by most retailers, who concentrated on metro or areas which can be termed developed. Wal-Mart had to sustain the market that it had developed in the outlying areas. Here is where logistics played a very significant role. The fleet of transports, the biggest in the field established a supply chain to even the most remote store. It accentuated the brand image of the company as well as kept inventories at warehouses low or almost zero.

One of the cardinal principles of commerce is profit and that relates to prices, supply and sale. Wal- Mart established these through logistics, and customer service, which was a major factor in the success of the retail store. Thus Wal-Mart had goods to sell at a competitive price and this was a big factor in the success of Wal-Mart. For this Wal-Mart carried out a survey and cost and price analysis of other stores in the area and priced its good lower than the smallest store. This generated volumes and massive sales that allowed Wal-Mart to become number one in the retail field.

Tags

Business Model, Customer Satisfaction, Retail, Selling Retailing, Walmart

Meet the author

author avatar M G Singh
A man who spent his early years in Air Force. An avid writer with over 6000 articles and 60 short stories published.Two novels on the anvil for publication.

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Comments

author avatar Fern Mc Costigan
12th Oct 2015 (#)

Like to shop there but still disagree the way they play tier employees!

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author avatar brendamarie
12th Oct 2015 (#)

I worked from them some time ago. They do not treat their employees well.

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author avatar Kingwell
14th Oct 2015 (#)

I too shop there but have heard that they do not treat there employees well. Blessings.

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author avatar Ptrikha
14th Oct 2015 (#)

Big Bazaar has tried to follow this model in India, but I don't think its scale is as much as of Walmart.

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