Example of cost leadership
Wal-mart is one of the prime examples of cost leadership. Wal-mart is a retailer that uses its supply chain, logistics expertise, and cost management strategy to provide the lowest prices to customers. Customers have responded favorably, and despite some social opposition to their business model, Wal-Mart has enjoyed consistent expansion.
Wal-mart’s use of distribution centers and inventory management enable the firm to quickly identify shortages on store shelves. In addition they are able to analysis customers buying patterns on a national, regional, and local basis and through partnerships with suppliers can quickly communicate new orders to manufacturers.
Because they compete on price and not on service, Wal-mart does not need to thoroughly train their workers. Wal-mart has developed very simple stocking and point of sale procedures that have minimized training time for their front line employees. Wal-mart also limits their overhead by running a very efficient and unpretentious corporate headquarters.
Wal-mart’s use of distribution centers and inventory management enable the firm to quickly identify shortages on store shelves. In addition they are able to analysis customers buying patterns on a national, regional, and local basis and through partnerships with suppliers can quickly communicate new orders to manufacturers.
Because they compete on price and not on service, Wal-mart does not need to thoroughly train their workers. Wal-mart has developed very simple stocking and point of sale procedures that have minimized training time for their front line employees. Wal-mart also limits their overhead by running a very efficient and unpretentious corporate headquarters.