this shows how wal-mart plans to add value to its products to ensure its international sustainability. from http://walmartstores.com/sites/sustainabilityreport/2009/s_rs_newGoals.html

negative side of wal-marhttp://www.chaosscenario.com/main/2006/12/walmart_blows_i.htmlt's extensive cost-cutting: poor employee benefits from

*Brief note : In Class 13, we discussed Dell’s innovative value-adding strategies. In this post, I’ll do a mini Wal-mart (again) case study.

Article taken from: http://mohanchandran.files.wordpress.com/2008/01/wal-mart.pdf pages 3-8

Like Dell (class reading #13), Wal-Mart bypasses dealer channels to eliminate costs and risks. It follows the compact model : suppliers -> manufacturer -> customer. It also has faster inventory replenishment and lower shipping costs.

Wal-mart practises ‘cross-docking’ which challenges the notion of supply chain, focusing instead on the demand chain aspect. This reminds me of the Economics principle of the Invisible Hand, espoused by Adam Smith. Customers determine exchange of goods as it is based on their demand. The value chain, composed of staff, manufacturers and suppliers (not supply chain like Dell) is tightly coordinated.

Wal-Mart places an emphasis on maintaining good relationships with its suppliers, compared to Dell which focuses on assessing real consumer demand and segmenting consumers to service their needs. Similar to Dell, Wal-mart implements sophisticated technology to track inventory and sales levels and has quick inventory velocity (decreased inventory, increased speed).

However, this article presents Wal-mart in a positive light. While its strategies add value, employee welfare is an area of concern — low wages. Also, Wal-Mart poses a threat to its competitors due to competitive pricing, its flip-side is predatory pricing – deliberately pricing goods below market price to drive out rivals.