Swimwear Industry

Nikki Aggarwal

Myriam Bien-Aimй

Nicole Genta

Simon Gorter

Mimi - gingar240@aol.com

Tom - mercen4ry@hotmail.com

Strengths and Opportunities

Wal-Mart has been able to lead the retail industry with three core tactics: 1. It has consistently taken advantage of developing technology; 2. It has maintained a working relationship with its suppliers; and 3. It has kept its culture consistent across all stores. As technology has advanced, Wal-Mart has taken the opportunity to utilize the advancements, making its operations more efficient and enhancing its on economies of scale. In the 1990's, Wal-Mart used Electronic Data Interchange (EDI) for forecasting, planning, replenishing, and shipping applications, allowing vendors to receive orders and interact with Wal-Mart electronically. In 2002, it required its suppliers to use Retail Link, providing point-of sale data and product inventories for each store. Most recently, it has "lead the retailing world into the next-generation technology of radio frequency identification (RFID)" (p.2).

Utilizing technology has allowed Wal-Mart to maintain lower inventory with "cross-docking," which transfers products directly from in-bound vehicles to store-bound vehicles, continuously delivering goods to warehouses, repacking them, and dispatching them to stores within 48 hours. With its own transportation systems, Wal-Mart is able to replenish its shelves four times faster than its competition. Wal-Mart also owns the largest and most sophisticated computer system in the private sector, connecting all stores, headquarters, distribution centers, and suppliers through advanced satellite communications. Along with being among the first to use point-of-sale uniform product codes scanning, Wal-Mart's use of technology has allowed for a just-in-time process of control, which reports when items are sold and knows to include replacement in the next shipment. Wal-Mart's investment in high technology enables it to operate more stores without an increase in expenses, capitalizing on all cost saving opportunities.

Wal-Mart's regulations over its suppliers have also led to major advancements in its business. Automated reordering systems link Wal-Mart's computers between major companies and distribution centers, identifying items low in stock for automatic replenishment. With its "Buy America" philosophy, Wal-Mart has made a commitment to buying quality American-made goods with the same quality and affordability as foreign-made products. Partnerships with its associates have facilitated leveraged buying power with suppliers, made purchasing agents very focused, and lowered costs for both parties.

The third strength underlying Wal-Mart's success is its consistent culture. Each Wal-Mart is tailored to its specific market and region providing local customers with their preferences of merchandise. It has a focused strategy in place for human resource management development, taking the time and money in training people and ensuring they are satisfied. With its "led from the top but run from the bottom" philosophy, Wal-Mart empowers, enriches, and challenges its employees to work towards making the company successful. Wal-Mart makes an effort to listen to employees and challenge them to come up with ideas to make the company better, providing them with the appropriate tools to do their job effectively. Wal-Mart also takes notice of the most intricate details of store layouts and merchandising techniques to make a better shopping experience for its customers. "The customer is always right" defines Wal-Mart's philosophy towards serving customers to the best of its ability. Throughout the chain of stores, Wal-Mart has had a reputation for absolute trustworthiness, friendliness, and high performance spirit toward customers. Wal-Mart has even gone beyond its doors through community outreach programs and environmental consideration, proving its dedication to serve customers fairly in every aspect of their experience with Wal-Mart.

Weakness and Threats

Wal-Mart's constant drive for perfection in all areas of the value chain means that it has very few weaknesses that are not already being addresses directly. However, this does not mean that Wal-Mart is problem free. While Wal-Mart is in a strong position in relation to its suppliers and its consumers, it has other problems to deal with both internally and within the communities it affects.

With the success of Wal-Mart's low-cost strategy, the possibility of competition increases as other firms are able to observe Wal-Mart's strengths and weaknesses and improve on Wal-Mart's shortfalls. Among the challenges Wal-Mart faces is the proximity of globalization as more companies find cost-reducing strategies in outsourcing, lowering manufacturing costs and diminishing Wal-Mart's ability to marginalize costs. Most notably, Wal-Mart has been largely ineffective in attempts to establish itself in India and China two of the world's fastest growing markets. This has lead to the threat of intense price competition which has resulted in price deflation in some areas. Also, while Wal-Mart has been a clear industry leader in promoting the use of technology in its supply systems, it has been criticized for not making proper uses of the internet and other purchase options like catalogues. Competitors like Target and Sears have a vast amount of inventory available online but Wal-Mart seems to have only limited offerings.

Paradoxically, Wal-Mart's ability to out-price smaller competitors makes it hard for them to survive as more rural communities prevent Wal-Mart from entering their market to protect local businesses and prevent Wal-Mart from driving down standards of living. Wal-Mart's cost-cutting strategies have driven small businesses to bankruptcy by fiercely undercutting them in their home territory and maximizing perceived utility and output well above what they can provide.

Although Wal-Mart seems to still be in its super-normal growth stage, the US market is showing signs of saturation in many areas, which may lead to the maturity and possible stagnation of Wal-Mart's operations. As Wal-Mart nears its peak, it seems that the company has prolonged turning its attention to diversification. Operating in this single business