Wal-Marts 2005 Channel Conflict and Resolution

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Table of Contents

Intro
Discussion
References

Intro

It is necessary to mention that Wal-Mart had to deal with a channel conflict in 2005, and the decision that was made by the company can be regarded as incredibly efficient and has helped to address this issue. The problem that occurred is that core telephone suppliers had to revise their strategies all the time and were competing at that time. The issue that needs to be noted is that many suppliers had to reduce prices of their products, and it has resulted in less profit (Hittt, Black, & Porter, 2009).The decision to separate products in particular groups that are aimed at different consumers was an efficient choice in this case and has helped the company to resolve the conflict.

Discussion

It is a responsibility of the retailer to find the best possible solution in such situations, and cooperation is of utmost importance most of the time. Also, it is paramount to understand that it is necessary to provide suppliers with a range of benefits to address such issues because it may help the enterprise to get a significant competitive advantage. It is understandable that a company may have to deal with several difficulties when manufacturers provide products that are incredibly similar and it is necessary to come up with various approaches because it could lead to severe consequences in some cases.

The fact that it is one of the biggest retailers also played a vital role because the company was able to get an excellent position on the market, and the overall goal is to receive the most profit (Bloom & Perry, 2001). Another core aspect that should not be overlooked is that the enterprise takes advantage of the fact that manufacturers make a significant percentage of their sales through this retail channel. They may be forced to sign deals that would be beneficial for Wal-Mart (Putting screws to suppliers means big cash for Wal-Mart, 2010).

However, the company is determined to build long-term relationships with its partners, and it is one of the core aspects that have led to such tremendous growth over the years. It is imperative to note that a company like Wal-Mart wants to ensure that its suppliers are reliable because any issues may affect the experience of the consumers, and it is an aspect that is highly valued by the enterprise. Another aspect that is worth noting is that it has access to enormous amounts of information and knowledge because it operates all over the global and the company can use such data to develop approaches that would be the most useful and channel power is also increased as the result (Govindarajan & Gupta, 2009).

The fact that the company has invested many resources into information technologies also needs to be discussed, and the enterprise can determine possible sales and how they would be affected by differences in price (Perner, n.d.). Also, it is imperative to understand that the data that is available on social media and the Internet is collected and analyzed, and it is possible to get a better understanding of the amount and types of products that are needed, and such factors are considered during the decision-making process (Perez, 2011). Overall, it is evident that Wal-Mart can leverage channel power because it keeps track of latest trends in the industry and has access to many resources.