Walmart example - cont - -1 million sq feet-Cross docking...

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12/3/2014 1962: Walmart founded 1991: Walton dies 1992: Stock price down 1005: Big shift to China Sourcing Porter: “Operational efficiency” does not equal strategy lowering costs Easy to imitate 1. Establish a valuable position in the market 2. Support that position with tailored activities - if you take one away, the others do not function - 1st, 2nd fit (complexity of the system) - over time -> 3rd order fit (learning curve) - Tradeoffs -> walmart IT growth opportunities Walmart’s Position: Discount retailing in rural areas Distribution Centers - Would first lead with a dist. center, then stores while expanding - All stores 1 day or less from a center….150 stores per center, 150 miles away
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Unformatted text preview: -1 million sq feet-Cross docking - no sitting inventory, inbound inventory loaded into another truck-Supported by IT 2nd order fit:-IT with no stock outs 3rd order fit:-Inventory turnover (cross docking)-COGS/avg inventory on hand = days Buyer Power:-No negotiation-Retail link -> information on suppliers + Volume Hard to Imitate:-No negotiation - volume-Cross docking Easy to Imitate:-In house brands-china sourcing - easiest-big distribution centers How should Walmart position itself in the online market?--------------...
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