Hi, need to submit a 2500 words essay on the topic Strategic Management: Wal-Mart.The company has been focused on the strategic management of costs from the very early days when its founder, Sam Walto

Hi, need to submit a 2500 words essay on the topic Strategic Management: Wal-Mart.

The company has been focused on the strategic management of costs from the very early days when its founder, Sam Walton, began his career as a discount retailer.

One of Walton's own rules for building a business, in fact, encapsulates the dual-pronged philosophy of Wal-Mart's strategic cost management.

His ninth rule specifically advocates that one should "control your expenses better than your competitors. This is where you can always find the competitive advantage" (Ghemawat, et al. 2004: 49). The scope of this paper will be to examine the key strategic elements underpinning Wal-Mart's cost controls and industry leadership. The company engages in aggressive cost reduction through the strategic management of procurement, inventory, distribution, and internal operational efficiencies. Further, it maintains its cost leadership within the industry by being willing to duplicate the successful strategies of its competition, its use of the principle of evolution over revolution, deep discounting strategies, and key strategic partnerships with other companies.

Based upon the information in the case study and the research evidence found which supports the strategic management practices used by Wal-Mart-not to mention the obvious success enjoyed by the company-it would be fair to say that Wal-Mart is indeed successfully managing its costs and placing itself at the head of the line within the American discount retail market.

Strategic Management of Cost Reduction

In business, it is one thing for a company to say that it is going to control its costs. but it is quite something else to effectively do it. Wal-Mart has developed several key elements or points of control that have allowed it to manage its costs with startling efficiency.

Procurement. It isn't any great revelation that if a company is in the retail business, it's viability depends on obtaining goods for as low a cost as possible and then selling them as expensively as the market will allow. Accordingly, any strategic management of costs is going to necessarily begin on the side of procurement where the resale goods are obtained.