Literature research Essay Example | Topics and Well Written Essays - 2500 words

Literature research - Essay Example Case studies have also been analyzed that were related to the operational characteristics of Wal-Mart and its competitors. A descriptive approach has been adapted since the respective research involved the analysis of the existing operational characteristics of the retailing companies. 3. Analysis 3.1 Assumptions Kmart and Sears were competitors of Wal-Mart; however they merged into a single retailing organization in 2005- Sears Holding Inc. This report refers to the individual names of both the organizations whenever incidents have been quoted from the year before the merger. Wal-Mart is a multinational company with head offices in US, therefore only US markets and competitors have been discussed in the report. 3.2 Analysis of Operational Characteristics of Wal-Mart 3.2.1 Company Portfolio Wal-Mart is the largest retailer of the world. Sam Walton, the man behind the retailing stores chain, began its operations in 1962. The first store opened in Arkansas, which marked the start of th e rapid expansion of the respective business. Sam Walton became known as a clever businessman in a very short span of time due to the success of his retailing stores. After conquering the US market, the owner decided to expand his business globally. According to a report issued by Wal-Mart in 2010 (Wal-Mart Stores); Wal-Mart operates around 4,000 stores around the world in 15 countries, namely China, India, United Kingdom, Japan etc. Kotabe stated that Wal-Mart is responsible for operating five divisions in US; Wal-Mart Stores, Wal-Mart Supercenters, Sam's Club, McLane's Company and Wal-Mart International. All of these different divisions amount to 4,300 establishments in US. The company recorded up to $405 billion as their annual sales last year, whereas target recorded up to $65 billion in 2009 (Target Corporation) as seen in figure 1 in the Exhibits section. The biggest competitors of Wal-Mart are Target and Kmart. 3.2.2 Operational Characteristics Operation management can be def ined as the overseeing, management and formulation of business operations in such a manner that the quality of the service and products is maintained. The company has been able to attain competitive advantage in the market due to their low prices, coupled with quality. They believe that their customers should be able to have a share in their profits; that share is made available to them in the form of low costs. Wal-Mart is able to maintain low cost operational activities in their stores due to their efficient supply chain management, vendor relations and integration of information management processes. These aspects shall be discussed in detail in the following sections. The core expectations of a customer that need to be met by a retailer are: High quality Broad scope Low prices Good customer service Convenience (Cowgill) The percentage of expectations met by different retailers is shown in Figure 2 in the Exhibits section. 3.2.3 Channels of Distribution Wal-Mart owns up to 3,300 company trucks that facilitate the supply from the warehouses to the retail stores. Competitors do not maintain such an extensive distribution network of their own due to which their costs are much higher than Wal-Mart’