EXECUTIVE SUMMARY
Wal-Mart is planning to introduce farm fresh department into its current model. It is already well established retail company into its industry. The main motto of Wal-Mart is to sell best items at low price. Introducing a new product line into its model will be challenging. The first problem will be whether it would be as successful as its current product line, what will be the potential cost and what target market it should focus and whether it will be able to catch the same potential customers that it has for its other line of products or departments.
Another problem will be whether they would be able to follow their winning formula of stacking high and sell low. Wal-Mart is following economies of scale by buying at bulk and selling at low prices. Since farm fresh department includes fruits and vegetables, it would be difficult to implement this strategy.
Figure 1
Figure 2
Figure 3So based on decision model, they have to develop new strategy for introducing farm fresh.
We have applied various models like decision analysis, regression and forecasting. Based on application, we recommend that Wal-Mart will make good profits and would be able to attract customers if it introduces new division of farm fresh at St Catharines.
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INTRODUCTION
Wal-Mart
"BUY IT LOW, STACK IT HIGH, SELL IT CHEAP"
COMPANY PROFILE
USP: Everyday low price
Wal-Mart Global (NYSE: WMT : $52.77) (11/24/08 16:03:38 EST)
Wal-Mart Stores, Inc. is both a domestic enterprise, as well as a international discount retailer. They operate retail stores domestically in the US and various international markets. Wal-Mart operates on an "Everyday Low Price" philosophy because they are able to maintain their low price structure through complete expense control. With this philosophy they have proven to be extremely profitable domestically and internationally. Their...