Wal-Mart is known nationally as a discount retailer, yet the company is stepping up efforts to market itself as a low-price leader. Current advertising focuses on internal operating efficiencies that are helping keep prices down. This strategy was implemented because the discount giant believes that consumers are still concerned about the economy. At the same time, the company announced plans to offer 3-D television later in the year, a move clearly tied to an economic rebound. Some analysts are questioning the feasibility of such a move.
- Use the planning process to imagine the steps Wal-Mart took to develop its price-cutting strategy.
- In terms of planning, is low price leadership a strategic or tactical move? Can you make an argument for both?
- Watch the related video clip. The analyst suggests that there is a lot of uncertainty about Wal-Mart’s ability to offer 3-D television this year. In terms of planning timeframe, is Wal-Mart’s decision a short- or long-range plan? Why would Wal-Mart adopt this perspective? What planning tool(s) is Wal-Mart utilizing to make this decision?
- Now consider the implications of Wal-Mart’s two-pronged strategy. How should cutting costs and introducing cutting-edge high tech products affect the planning of Wal-Mart’s suppliers and competitors?
SOURCE: M. Bustillo & T. W. Martin, “Wal-Mart Bets on Reduction in Prices,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052702304198004575172271682347064.html)
Related video clip: