Wal-Mart Rfid Case

As the largest retailer in the world, Wal-Mart applies the strategy of selling branded products at low costs to attract customers to purchase in their store. To implement the strategy, Wal-Mart increases its efficiency from the inventory, distribution centers, supply chain, and information management. Therefore, when other retailers schedule sales days in one year, Wal-Mart offers low prices products to customers every day. Without doubt, the low price of branded product strategy builds a strong competitive advantage from other competitors, and becomes the retailers leader in the world.

Wal-Mart develops different ways to monitor all units in the supply chain and control its cost through many sides. For example, Wal-Mart has 8.9% share in the retail market in the United States, but no single supplier occupies over 4% of the overall purchase volume according to the passage. Wal-Mart applies this rule because it needs independence to prevent from cost increments because of dependency to suppliers. Besides, Wal-Mart also reduces cost of its distribution system compared to other competitors. It locates distribution centers as close as possible to each store within one day driving. Therefore, to meet store requirements every day, staff needs to make sure all required goods are located in each truck delivery, and this helps Wal-Mart to save delivery costs. According to the passage, its distribution cost only occupies 1.3%of sales, while the nearest competitor spends 3.5%. These are effective plans to decrease the cost. However, to become a successful retail store, the core issue is still the management of its inventory.

In order to manage its inventory more effectively, Wal-Mart adopts new technology, which is known as RFID, to track and control its goods. Also, this dramatically improves the monitor and efficiency of inventory management, which is the most critical issue to control the cost as a retailer. Although Wal-Mart has many factors to improve its efficiency and decrease the cost, the most important reason that Wal-Mart can be so successful is holding most accurate and current data of inflow and outflow of its inventory. Furthermore, Wal-Mart calculate profits, analyzes and evaluates the performance from each store according to a real-time basis data, and spends the information to all the related departments including their suppliers. All of its task controls support its core business strategy, and Wal-Mart becomes outstanding from other