Walmart is unarguably the largest and leading retailer in the global retail industry with the net sales of $482.2 billion in the financial year ending 2015. The success of the company is based on various elements and strategies, and the effectiveness can simply be noted from the fact that it serves nearly 250 million customers every week, managing and operating over 1050 retail stores across the world in over 26 countries with more than 71 brand identities and corporate banners (Walmart, 2015).
However, the moist important yet interesting fact about the Walmart is defined as its supply chain and distribution strategy which is also considered as the industry benchmark. The main reason is the fact there is no other corporate player in the global marketplace owning the similar size of business portfolio and along with such diversified market existence. It is also revealed from the research studies that the place and distribution strategy that is designed and executed by Walmart is not only the key to its success, but also a source of its competitive advantage.
The company also claims that the primary reason behind its fast pace growth, continuous financial success and diversified product, market and customer portfolio is its distribution strategy which is further supported by the logistics and operations. The effectiveness of Walmart’s distribution strategy can also be noted from the fact that it claims to be seriving more than 250 million customers every week, which in practical context can only be possible, if the strategy is truly effective (Walmart, 2015).
The company i.e. Walmart has established highly automated and centralized distribution units which operate round the clock and 365 days. In order to ensure that customers in each of its targeted regions are served and entertained effectively, the company has established multiple distribution centres in every regional zone. For instance, in the case of United States, over 45 distribution units are established which are dedicated to import goods from around the world and ensure each of the store within the US is managed with the demanded products. These 45 regional distribution units are further supported by over 150 distribution centres that are in direct contacts with retail units across the region. It is also important to understand each of the distribution centres caters the need of 75 to 100 retail stores (Walmart, 2015). This distribution strategy can further be defined as hierarchy which operates in most unique and systemized way to ensure the errorless flow of products from the suppliers to customers at their door step.
Taking the global distribution context into consideration, it is observed that the company in total has established 158 distribution centres which are claimed to be the keys to organisational success. Unlike any other retailer in the world, the Walmart’s distribution network is also claimed to be the world’s largest and most effective within the retail industry. Its logistics activities are performed with the help of more than 6,450 tractors and over 54,000 trailers which are operated by more than 7,000 drivers (Walmart, 2015).
Furthermore, each of its distribution centres has high-tech and modernized systems to moves hundreds of thousands of cases each day. In addition, each distribution centre caters 90 to 100 stores on average that are strategically located with an aim to provide rapid responses to the connected retail stores.
A part from the activities and operations within the context of distribution and place strategy, the company is also found to believe that its workforce assists it to generate enough power to cater its stores as well as every customer at the same time. Walmart therefore puts extra focus on its recruitment, selection, training as well as development and considers it as a part of its distribution strategy. Since the distribution activities involve the logistics too, the company ensures that each of its drivers is not only qualified, but also experienced. The strict company’s policy can be noted from the fact that it only hires drivers those have driven minimum of 300,000 accidental free miles (Walmart, 2015).
In addition, the company also accepts its corporate social responsibility and ensures that its distribution and logistics activities are environmental friendly (Walmart, 2015). For this, the Walmart does not only follow the self-designed and self implemented code of conduct, but also ensures that the global standards in relation to corporate social responsibility are met at all times (Walmart, 2015).
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Walmart, 2015, Truck Fleet, retrieved 20th May 2015, <http://corporate.walmart.com/global-responsibility/environment-sustainability/truck-fleet>
Walmart, 2015, Reducing Carbon Emission in Our Stores and Global Supply Chain, retrieved 20th May 2015, <http://corporate.walmart.com/global-responsibility/environment-sustainability/greenhouse-gas-emissions>
By- Sagar Lakhisarani and Siyu Yue