WHAT MAKES SAM'S CLUB'S SUPPLY CHAIN SUCCESSFUL IN CHINA? AN ANALYSIS OF SUPPLY CHAIN MANAGEMENT AS A SOURCE OF COMPETITIVE ADVANTAGE

Abstract

Retail competition is increasingly a competition between supply chains rather than between individual products or stores. This paper analyzes the supply chain of Sam's Club in China and argues that its competitive advantage rests on four capabilities, namely a limited stock-keeping-unit (SKU) strategy, membership-driven demand visibility, centralized procurement, and data-driven supply chain management. Drawing on established concepts from operations and economics, including economies of scale, information sharing, and inventory theory, the paper explains how each capability lowers cost or reduces uncertainty and how the four capabilities reinforce one another. A limited assortment raises purchase volume per item and strengthens bargaining power. Membership converts transactions into demand information that improves forecasting. Centralized procurement realizes scale economies, and data-driven operations balance product availability against inventory cost. The paper also examines the main challenges, namely global sourcing risk, residual demand uncertainty, and the trade-off between efficiency and resilience. The analysis concludes that supply chain management is not merely a support function but a durable source of competitive advantage, and it notes that firms compete increasingly through the coordination of information, inventory, suppliers, and logistics.