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INTRODUCTION:
Strategic Management Assessment Plan, As the world is revolutionizing, businesses are now aiming to reach the global markets which result in more intense competition. This compels the international organizations to transform their business operations or ways of conducting operations and strategies, and implement new perspectives to build up global business strategies in a highly competitive, large-scale and scientifically complex environment.
This report has covered strategic management prospect of the Wal-Mart Inc. The report has analyzed the current internal and competitive environment of the company followed by impending scenarios for a competitive environment. In the end, the paper has proposed proper strategies for consideration and implementation.
INTRODUCTION TO COMPANY:
An American multinational retail corporation, Wal-Mart Stores Inc., was founded by Sam Walton in the year 1962. The business operates a series consumer and retail stores which provides various goods under a roof. Fortune Global 500 has ranked Wal-Mart Inc. ranked as the world’s second most leading public firm in 2013.
Wal-Mart began its business from the most geographically and culturally recognized country, that is, America. Later, it spread out and internationalized its business, intended to target some of the emerging markets and detained the percentage of market of local rivals. Now it runs its operations in various countries including Canada, Mexico, China, Brazil, Argentina, and European countries (Walmart, n.d).
CURRENT INTERNAL ENVIRONMENT:
Wal-Mart has effectively used the low cost strategy to target the customers from each social class. With its far-reaching expansion of business, the company is thriving to enter and target more developing markets in the world. SWOT analysis is carried out to analyze the current internal environment of Wal-Mart Inc., which is given below (Pahl & Richter, 2009):
| A SWOT Analysis | |
| Strengths
· Wide operation scale · Competence in information systems · An extensive range of products, targeting different markets across the world · Effective cost leadership strategy · Operations across the world
|
Weaknesses
|
Opportunities
· Expand product folio by diversifying brands and product lines |
Threats
· Growing competition from various physical stores and online shopping stores · Rising confrontations from domestic societies · Increasing prices of commodities and other products · Fluctuations in foreign currency · Changing a consumer trend that has shifted consumer preferences from FMCG goods to durable goods. |
In order to determine the competitive strategy, it is necessary to analyze the company’s different activities and internal resources. To operate the value chain effectively, the primary activities are synchronized in order, which are further served by supporting activities of the company.
Infrastructure: Wal-Mart provides services to around 100 million customers with its 2485 stores across the world, including 1007 international Wal-Mart units, 457 Sam’s Clubs, 682 super stores and 5 regional markets. Wal-Mart is the largest private company in America, which runs its operations around the world, controlled by its headquarter. Whereas, local centres deal with local customers. Associates are given responsibility to reduce costs of the business by adopting cost-saving approaches such as less paper use, etc.
Human Resources: The training of Wal-Mart’s employees is based on “customer is always right” formula. Employees are provided with the competitive environment, growth opportunities, market compatible wages, and other benefits like scholarship programs, insurance policies, vacations, etc. Approximately, 60% of the managers have instigated as hourly associates which shows that a company provides opportunity for career development. In addition, the company embraces an effective communication system throughout the company which encourages employees to participate in the decision making process, generate ideas and implement them to obtain productive results.
Technology: Wal-Mart has incorporated a high-tech system which saves its customers from all complications. While checking out from the store, bar code of product is swiped which transfers all the information to the data warehouse of the company immediately. Then the system automatically updates, evaluates and places orders to the distributors of Wal-Mart. This method of Just-in-time inventory reduces the cost of operations and thus helps to maintain its competitive operations.
Ordering: Wal-Mart has established good relationships with its suppliers to build a strong network and help to decrease cost. Orders are sent automatically to suppliers to obtain materials and recognize reasonable profits.
Marketing: Wal-Mart sells its own brands as well as licensed brands. It only purchases products from regional and local wholesalers rather than from somewhere else. Most of the sales account for products that are nationally advertised; hence company maintains and sells according to local preferences. Also, Wal-Mart gives an opportunity to inexperienced entrepreneurs to gather ideas of product development, market penetration and development and much more.
Service: Wal-Mart is open for 6 days a week and on Sunday as well from 7 A.M. to 11 P.M. and 10 A.M. to 8 P.M. respectively. The Company offers products at competitive prices or sometimes lower as according to a local business condition of the target market. With an intention to reduce expenses and maximize inventory turnover and volume of sales, Wal-Mart has designed its system based on cash-and-carry and self-service facility. The replenishment method supports the stores to maintain as per the demands of customers..
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