WALMART AND LOSS LEADER STRATEGIES

    Today we will be discussing about giant American business "world largest retail     store" walmart.

    Americans spend 46 million dollar every hour on an average.

    They have 2.2 million employees.

    They generated 2.5 million profit per hour.

    History:

    After the world war second that took the franchise of retail store Ben Franklin        Store.

   Sam Walton spends many hours at their computer stores and understands         their businesses.

    He learnt few things while understanding others business:

• The power of discounting: low margin to get high sales volume.

• Keeping Inventory fresh : 

Inventory will be fresh means quick sales happen. There will be a new option to present customised or newly designed products to our customers more often and hence the more varieties or diversity of products will be available so sales volume will increase. 

• Better bargaining power power with stocks if quick sales happen

• Loss leader strategy will be available. In this strategy we sell small margin products with a very cheap rate and high margin products with more profits. Whenever we sell a low margin product like toothpaste with heavy discounts the customer thinks that every product in that particular store will be very cheap so getting into a trap if he buys a high margin product. This have many benefits:

• High sale volume

• Customer retention

• Chance to earn high profits on high margin products

• Team Management is a crucial part of business:

• Safety

• Collaboration

• Liberty to experiment

• Collaborative ownership

• No strict rules