Wal-Mart is abandoning its one-size-fits-all approach to retailing in an effort to increase sales. Wal-Mart officials are realizing that they need to broaden their low price platform in order to continue to compete in more markets. Wal-Mart's merchandise will now reflect one of six demographic groups, including African-Americans, affluent, empty-nesters, Hispanics, suburbanites and rural residents. The company also plans to renovate its 3,400 U.S. stores over the next year to reflect the needs of these six different groups.
This is risky for Wal-Mart because they're changing a supply chain that was developed on low-cost efficiency for a divided customer relationship management-based chain. It's also interesting from a standpoint of enabling price discrimination. They could potentially charge rural customers due to market power, especially in grocery, which is characteristic of local markets.
Walmart (strategy to beating competitors)
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At some point Sam Walton made the decision to achieve higher sales volumes by keeping sales prices lower than his competitors by reducing his profit margin. By 1970, he had eleven Walton's stores Inspired by the successes of other discount department store chains, Walton opened the first store in his own discount chain in Rogers, Arkansas that year. Responsible for the purchase and maintenance of signage, Walton's assistant, Bob Bogle, came up with the name "Wal-Mart" for the new chain. By 1967, the company grew to 24 stores across the state of Arkansas, and had reached $12.6 million in sales, and by 1968, the company opened its first stores outside of Arkansas in Sikeston, Missouri and Claremore, Oklahoma.
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