There are few lessons get saved in brain for no specific reason.One such lesson was a case study of Walmart Inc that I learned in our strategy class @ Harvard Business School
Professor asked 3 questions
Q1 Raise hands if there are any Walmart suppliers – Few raised
Q2 Raise hands if you are happy to be supplier for Walmart – Same few raised again
Q3 Raise hands if you make profits from Walmart –To my surprise none raised
I wondered why they are happy while they don’t make profits
Walmart gives its vendors long lead time to deliver.As a vendor those orders are manufactured when they don’t have orders from other customers.So basically to run a factory there are fixed costs such as employee salaries etc.Irrespective of vendor has orders or he has to pay those fixed costs
Although they don’t make profits on walmart they are happy and ready to supply
Since Walmart gives orders with 1 yr leadtime, By doing this they are making orders when factory idle thus not losing in fixed costs
These lessons can be used in today’s economic situation to gain business
Stay tuned I will share how we used some of those learnings in services industry @ TopMindz to grow our business during pandemic