ASDA & Wal-Mart
Wal-Mart basically takes care of its strategic management by expanding customer base and selling at lower prices than competitors. Hence it is not surprising that the company has been reported to be practicing predatory pricing (Wikipedia, 2007). This is evident in being market share in the US and its presence on many countries of the world through the Wal-Mart International.
With the simple model adopted by Wal-Mart, it could be inferred that it regards that the nature, scope and purpose of strategic management is just expanding customers and doing more business and therefore more business growth. This observation is readily apparent when in describing company’s corporate affairs, Wikipedia, (2007) said, “Wal-Mart's business model is based on selling a wide variety of general merchandise and marketing, "always low prices. " The company refers to its employees as "associates.
"All Wal-Mart stores in the United States and Canada also have designated "greeters", whose general role is to welcome shoppers at the store entrance, as well as playing a role in loss prevention. Unlike many other retailers, Wal-Mart does not charge a slotting fee to suppliers for their products to appear on the store. Alternatively, they focus on selling more popular products, and often pressure store managers to drop unpopular products in favour of more popular ones, as well as manufacturers to supply more popular products.
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On September 14, 2006, the company announced that it would be phasing out its layaway program, citing declining use and increased costs. Layaway was offered until November 19, 2006, with merchandise pickup by December 8, 2006. They plan to focus on alternative payment options, such as increased use of 6 and 12 month zero interest financing. ” To appreciate how Wal-Mart regards strategic management, there is need to observe how it addressed competition in the industry.
To understand the competition where the company is in, Wikipedia, 2007 said, “In the United States, Wal-Mart's chief competitors in low-end general merchandise include Sears Holdings Corporation's Kmart chain and Target. Many smaller regional chains, such as Meijer in the midwest, are also competitors. Wal-Mart's move into the grocery business has also positioned it against major grocery chains such as H-E-B, Kroger, Albertson's, Publix, Giant Eagle, Safeway, Winn-Dixie, Ahold, Wegmans, P ; C, Price Chopper and many other regional chains and independents.
A niche has been carved out of Wal-Mart's dominance in the United States by several retail corporations. By focusing on a small number of low-cost products, dollar store retailers such as Family Dollar and Dollar General have successfully competed head-to-head with Wal-Mart for home consumer sales. In 2004, Wal-Mart responded by testing their own dollar store concept, a subsection of some stores known as "Pennies-n-Cents”. There is thus basis earlier strategy that the company competes with the use of low cost products.
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