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Comprehensive strategies for Wal-Mart:


Wal-Mart should use market development strategy to enter the Pakistani market. As the population of Pakistan consist of 17 billion people and most of the people belong to low-middle income group. Wal-Mart is well known for its low cost strategy and has a large range of products. They can use these strengths in an effective manner to take the advantages from the opportunities exists in the market of Pakistan. Wal-Mart has a successful management style all over the world, which they can even continue in Pakistan. They can empower their employees to increase their performance and increase motivational level.

Wal-Mart has developed a strong and efficient information technology network. They can implement these practices even in Pakistani market e.g. using the point of sale scanning, and Electronic Data Interchange have been already introduced in the Pakistani market, so it will not a major concern for Wal-Mart to think.

They can use their decentralized pricing strategy according the circumstances to meet the local market conditions in order to capture market share. The main edge Wal-Mart can have in Pakistani market is that there is a very limited range of competition from other mass merchandisers in the market.

Although it will be not easy for Wal-Mart to have a large number of quality suppliers in Pakistani market but they can establish long term relationships with some major suppliers e.g. P & G, Unilever and they can evolve into partnership with some suppliers to share information to improve their performance level.

Marks and Spencer:


Pakistani market would not be appropriate for Marks and Spencer to expand internationally. Marks and Spencer deals in high quality textiles and food items, whereas Pakistan is a third world country and there are very limited people who care about quality as compare to price. Recently, Marks and Spencer entered in USA and Canadian market and they have a lot of path to cover and to get success in these regions. Marks and Spencer is used to initiate process control and testing at the point production, which lacks in Pakistan due to very limited suppliers. Its also difficult for Marks and Spencer to establish full-scale cold supply chain system in Pakistan.

Marks and Spencer is considered as status brand with the name of St. Michael which is much unknown in Pakistani market.

The opportunity to enter in Pakistan I market through acquisition or joint venture can not be avail as the local retail stores do not meet the desired specifications followed by Marks and Spencer.

They should focus on USA and Canadian market first where they already have made heavy investment and where there is still a room to improve their strength and capture more market share.

Ikea:
Pakistan has huge furniture industry and can serve as huge potential market for Ikea. If Ikea is to succeed in an overseas market, like Pakistan they must not only master the traditional skills but also of market segment, cultural and economic traditions of the host country.

Ikea will need to look at joint ventures and strategic alliances to become successful in the Pakistani market. These in turn will have to form alliance and joint ventures to raise enough capital to develop the links necessary to form a successful entry.

The company's target customers in Pakistan should be people, who are looking for value and who are ready to do some work serving themselves, transporting the items home and assembling the furniture for a better price.

Profits in Pakistan should be maintained at a similar level to other countries. Since the per capita income of Pakistani peoples is substantially lower than other markets, product will have to be modified to lower price categories and volumes will have to increase to offset the difference. Except in the largest cities, operation costs should be lower than Western Europe. Labor costs are substantially lower in Pakistan, but the Ikea store concept requires little human resources, so cost reductions must rely on other overhead such as store, warehousing, power, taxes and advertising. Probably the most effective method for cost reduction is to source a higher percentage of goods form Pakistan. Even Scandinavian designs could be reproduced in Pakistan.

While doing business in Pakistan, Ikea have to make attention with the culture and the communication (verbal and non-verbal) because the communication can be interpreted in different meanings and can provoke some mistakes, misunderstanding and also some troubles. In order to furnish customers with good quality items at a low cost, the firm must be able to find suppliers that can deliver high quality items at low cost per unit. This strategy is also aimed at delivering products and services that are different from the product mix of the competition. The outlets in Pakistan can also make success by sending the direct mail to the potential customers. Another good way of promotion could be television advertising, because of its wide auditorium.

Pakistan is one of the most exciting, emerging markets in the world and with a cutting edge in global competition. One of the biggest competitive advantages is the value-added dimension that differentiates IKEA from its competition in Pakistan. IKEA offers limited customer assistance but creates opportunities for customers to choose transport and assemble units of furniture. Operations in Pakistan will be less controlled from Sweden. The centralized Research and development department would have form internal strategic networks with, in a collaborated manner; develop products which are adopted to match country level needs. Of course it will increase the complexity of the Ikea operational culture, but will enhance decision-making based on a true international dimension.

Sources of competitive advantage for

Management style:

Management style:

Management style:

Walton called his employees as associates, he adopted an open door policy, and aim was to empower the associates. Associates suggested ways to simplify and eliminate work. Walton spends as much time as possible in his own stores and checking out the competition. Profit sharing was available to associates after one year of employment, based on the earning growth. Managers and supervisors were compensated on a salaried basis, while incentives based Information processing system: on store profits.

All senior executives frequently visited stores and asked store managers and staff, very specific feedback. MARKS AND SPENCER started a campaign of Operations simplification aimed at liberty, staff, management and sports services from paperwork. Buying, merchandising, distribution, quality control for UK stores were centralized.

Expense control: Wal-Mart had very limited promotion activity. It runs 13 advertised major circulars per year, how ever major competitors typically use 50 to 100 advertised circular annually. WalMarts advertising expense was 1.5% of discount store sales compared to 2.1% for direct competitors, Wal-Mart rental expenses was 3% of discount store sales compared 3.3% of direct competitors. Wal-Mart eliminated manufacturers representatives from

The Company operates very informally. Specially trained IKEA AMBASSADORS were organized to key positions, to spread their company philosophy and values by educating their subordinate, purchasing, distribution and designing of functions were centrally controlled and were staffed by specialists who rarely were migrated to other functions. The company organized anti bureaucratic weeks that required all managers to work in stores, showrooms and warehouses MARKS AND SPENCER introduced a state of the art data recovery system that for at least a week every year. Store enabled it to track sales and inventory managers and cooperate staff alike electronically. They introduced electronic were expected to fully understand point of sale system which is used for the operations of IKEA stores.

inventory control and accurate pricing to reduce shrinkage purposes. Head office collects the information from the stores and place orders. MARKS AND SPENCER and some of its key suppliers developed a system, with the name of flexible response, through which data on current sales triggered changes to merchandise in process and altered shipping schedules.
Supplier relationship:

Employees policies: The founder visit stores shake hand with every employee, offering a few words of praise, encouragement or advice. The dinner was typically IKEA style that keeps the motivation high for weeks. The employees use casual; dresses like jeans and sweaters, they have relaxed office

negotiations with suppliers at the MARKS AND SPENCER initiated beginning of 1992 and estimated process control and testing at the saving of 3% to 4%. point of production. MARKS AND SPENCER assisted in designing products and developing innovative production methods. MARKS AND Information Technology System: SPENCER did not item but purchases Wal-Mart is well known for heavy a substantial portion of fabric that suppliers used to investment in IT. Wal-Mart installed external Electronic Scanning of uniform manufacture St. Michael products. product codes at the point of sale. Goods are produced according to MARKS AND SPENCER The installation of a satellite system planned helped to learn immediately what schedule. merchandise was moving slowly and thus avoid overstocking and deep discounting. The installation of EDI Marketing edge: enabled on estimated 3600 vendors representing about 90% of Wal-Mart Due to its status in UK, MARKS AND dollar volume, to receive orders and SPENCER receives extensive press interact with Wal-Mart electronically. coverage. Executives had believed Managers use inventory and sales product promotion relied largely on data to choose which product to word of mouth. display according to customer preferences and allocate shelf-space according to demand.

atmosphere, the search for creative solutions was highly praised within IKEA. They hire young people they develop them by delegating responsibilities early, rotating them frequently and offer them rapid promotions to high performance. Average age of store manager is 34.

Cost control: Cost conscious was a strong part of IKEA strategy waste of resources is considered as a moral sin. Employees traveled through most inexpensive air fares and listed simple IKEA HOTELS. They are always looking for less expensive, good quality, alternative materials. They hire young people which keep their cost low

Commitment to employees:

Value added facilities: In every store the have 5 to 6 areas called studio which display some of the best selling products. The location of studios within retail stores and their display settings were

Store managers at Marks & Spencer wanted a more efficient recruitment Pricing Strategy: process which would identify candidates There was typically a 2% to 4% early on with the potential to delight pricing differential between Wal-Mart customers and work effectively in a team.

and its direct competitors in the market. Wal-Marts prices were 2.2% below Kmarts on average and 3% below on items priced at all stores. Compared to Target in six surveys, Wal-Marts prices were 3.7% lower on average and 4.1% lower on items priced at all stores and compared to Venture, the lowest cost regional operator, Wal-Marts prices were 3.9% and 4.7% lower respectively. Wal-Marts gave its store managers more latitude in setting prices to meet local market conditions in order to maximize sales volume and inventory turnover while minimizing expenses.

MARKS AND SPENCER offered medical and pension plans and provided well above average benefits. MARKS AND SPENCER allocated nearly 10% of store space to employees and spent 16.2 million pound on welfare and staff amenities. MARKS AND SPENCER regularly promoted employees from within rather than hiring from outside

standardized. The developed standardized in store facilities include baby changing rooms, supervised play area for children, information centers and cafes.

Supplier relationships:

Vendors Relationship: Wal-Mart grew; its relationship with some suppliers evolved into partnerships, a key element of which was sharing information electronically to improve performance, Wal-Marts retail link also gave more than 2000 suppliers computer access to point of sale data, which they used to analyze the sales trends and inventory positions

IKEA supported its suppliers both technically and financially. They help Research and development: in buying this machines and setting MARKS AND SPENCER employed on up their operations. They encourage large number of scientists, engineers the suppliers to invest and drive and support staff worked with down the manufacturing cost. merchandising department and suppliers. In food, MARKS AND SPENCER established the first full Research and development: scale cold chain supply system in UK. IKEA introduced new innovative designs in the market. It also continually worked on re-designing of the product according to the new and changing preferences of the customer.

of their products on a store by store basis. Wal-Mart has strong bargaining power because no single supplier accounting for more than 2.4% of its purchases.

Training and Development: New associates were trained by 10 to 12 assistant managers. Wal-Mart began to emphasize the store within a store in order to support, recognize and reward associates in the management of this area of merchandise responsibilities.