Business Strategy

Which of the 4 generic business strategies is used? If differentiation, then how do they differentiate their services/products?
Wal-Mart’s slogan is “Always Low Prices” and “Every Day Low Prices” this accurately described the strategy of overall cost leadership. For everything from women’s lingerie to car batteries, Wal-Mart’s focus is on offering the same products as the competition but at a lower price. Wal-Mart relies on an IT-enabled tight supply chain management system to squeeze every penny possible out of the procurement, distribution, and warehousing of its products. It uses sophisticated business intelligence system to predict what customers will want and when. This is an example of overall cost leadership. They offer the same or better quality products or service at a price that is less than what any of the competition is able to do.
Wal-Mart's job is to bring product from the dock to the customer's trunks in as little as 72 hours. It has a distribution network of over 100 centers nationwide. This provides efficiencies for the retailer. Most people think it’s buying at the lowest price but, they actually concentrate on the lowest distribution costs.
In every supply chain there are multiple intermediaries that aid in getting the product or service from the manufacturer to the consumer. The only challenge here from a business standpoint is that as a result the amount of profit potential possible to the eventual retailer is small compared to what they otherwise would get to keep if they owned the whole distribution chain like Wal-Mart.
With the advent of the internet a lot more of the intermediaries that used to be deemed irreplaceable in the supply chain can now be replaced and their profit shifted elsewhere. Wal-Mart's business model eliminates the wholesalers and jobbers and lets them access the manufacturers more directly. This is why they are able to offer a wide range of products at very cheap prices.

If the products were allowed to pass through the hands of the other intermediaries then the price would have to go up because Wal-Mart would have to incur the cost of paying the jobbers and wholesalers. So distribution gives you the ability to access certain links in the supply chain based on your company's competitive advantage and eventually eliminate some of them so you can keep more of the profit.

How do Wal-Mart reduce the buyer and supplier power? How do they create switching costs and entry barriers?
By using Porter’s Five Forces Model, it contributes to Wal-Mart’s business strategy. Although, Wal-Mart has many competitors, their buyer power is low because they offer products at a much lower price. In the case of supplier power, Wal-Marts supplier power is low because they buy products from a wide range of suppliers. Wal-Marts threat of substitute products or services is high due to the fact that you can buy many of their products from similar retailers such as Target and K-Mart. However, Wal-Mart takes full advantage of the switching costs by offering the lowest prices for their products. It is difficult for new competitors to enter this type of market therefore the threat of new entrants is low. By, presenting many products all at low prices Wal-Mart establishes an entry barrier. The rivalry among existing competitors is high which is why Wal-Mart offers discounts and focuses on advertising strategies geared toward lowering prices.

What major business initiatives are used or being considered? What software is used? Are they top-line or bottom-line initiatives?
As a major business initiative, Wal-Mart is using the Supply Chain Management system. Wal-Mart has its stores all over the world and thousands of suppliers, to connect with those Suppliers. Wal-Mart is using the IT-based supply chain management system. This system also keeps tracks about inventory and information among business processes and across company. Supply Chain Management also focuses on quantity of product; indicate that the product is not too much and not too few.
Wal-Mart is using the RFID software called Radio Frequency Identification it helps to Improve supply chain management system.
Wal-Mart follows the bottom-line business strategy that helps them to keep their cost low, minimize their expenses, reducing the costs of human capital and also helps minimizing errors in process.