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Corporate governance refers to the set of laws, policies, and processes that impact on the way a company is governed. At Wal-Mart, there are only two things that the company has always strived to achieve: tell the Wal-Mart story and stay the course. This philosophy has enabled the company to grow and become the success story it is today.
Policies and practices at the company are designed to ensure a good working environment for its associates. The company has continued to expect feedback from its associates. Based on the feedbacks, it has managed to create an inclusive and equitable working environment for its employees. In order to improve management of employees, Wal-Mart has always engaged in training and development of its employees for leadership skills. Additionally, it ensure diversity within the workforce and
The Wal-Mart way not only consists of giving low prices or being the number one global retail chain but to give the customers a value for their money. This is why the company has consistently maintained an annual growth rate since 1970. Its net sales cost of sale, net income, and number of store have seen steady growth over the last forty years. For instance in 1970, Wal-Mart had only 18 stores and this increased to over 1000 by 1990.
This increase was witnessed because the company decided to venture into markets outside the United States. Its first ever market outside the US was Mexico and by 2002 the retail chain became the most successful in the US with over 5000 stores worldwide including in every states and province in Canada, US and Mexico.
Social Responsibility
Before lowering the price of a particular product, the company has to analyzed its true value and come up with a price that measure to this. However low pricing can lead to low returns for both the company and its competitors especially when the main focus for lowering prices is to edge out competitors.
The idea behind below the market pricing is that over time the cost of enterprise goes down making it possible to lower prices in order to build a large customer base. Wal-Mart has been in the retail industry for a long time now and it has also tried its business in various markets successfully while in other cases failed.
Using coupons as a promotion strategy, the company has been able to target various segments of the market such as the low end and the high end. Coupons are a good way of discounting products to attract customers at the same time promoting the brand in the market. Having a competitive product position with a low pricing of the products ensures that the company offers its customers a good deal. They (customers) are able to find just any product that they need for use on daily basis.
The retail market is also faced by high competition as operators try to outdo one another. To gain competitive advantages, organizations could choose to reduce prices such that consumers identify their products with economic purchases as opposed to those of the highly priced competitor products like it is in the case of Wal-Mart
Evaluation and Control
Wal-Mart began its discount strategy in 1962 to attract customers’ loyalty and this seemed to come to fruition. It opened discount stores that provided discounted branded goods to customer. It also adopted other formats of doing business. For instance, it opened the Sum’s club that targets small businesses and sells them business items at lower cost but this only applied to members of the club. In 1988, the company opened supercenters that offer almost all daily use domestic products under one roof.
This meant that family shopping was made easier with the availability of everything a family needed for their daily use in one place. Then from the supercenters, the company ventured into neighborhood market where they brought the chains into residential and people could easily meet their shopping needs right at their door steps. This idea provided convenience to the customer and at the same time the company did not drop its low pricing strategy.
Wal-Mart has an advantage over Tesco and Kmart in terms of pricing. The company boasts of a huge customer base build as a result of low pricing. Because of this, it has attracted loyal customers in various market segments. The company has stores that sell discounted products constantly throughout the year while some of its stores give regular offers.
It also undertakes the acquisitions of other small retails and international expansions therefore enjoying economies of large-scale production and a wide distribution network. This enables it to have a competitive advantage over its rivals in different parts of the world.
Recommendations for the future
The company plays a host to a wide range of consumer products such as electronics, grocery, women, men and baby wears among many more. The company also has online shopping that guarantees their customers a safe mode of item shipping. In a move to promote the brand Wal-Mart in various parts of the world, the company is buying retail stores that are doing well in their countries. Through their website, the company carries out promotion of its goods and services.
The content of their database are easily reachable using their website. This means that the customers who seek help online would always get satisfied. The idea of offering discounts to consumers is aimed at promoting the sales of the company’s products to consumers. Discount is something that sounds friendly in the minds consumers and it is a good strategy for promotion of sales of a product.
Wal-Mart has several competitive advantages over its main competitors. Retail stores that offer Wal-Mart real competition include Tesco, Target, Shopko, and Kmart. The company is known for its low prices of commodities compared to its main competitors. Wal-Mart has a good strategy of ensuring that it remains ahead of its competitors. Its biggest edge is the discounts it regularly and sometimes constantly offers to its customers.
Another competitive advantage that the retail store enjoys over Tesco and Kmart is the fact that it does charge suppliers for having a slot on their shelves as long as the sales of the particular goods remain high. This means that Wal-Mart only sales goods that the consumers like and use frequently.
Being a multinational company, its competition is not only local but international. To stay ahead of other retail shops even in different parts of the world, the company engages itself in rigorous branding and promotional activities. This is after buying ownership of some of the local retail shops.
Works Cited
Fishman, Charles. The Wal-Mart Effect: How the World’s Most Powerful Company Really Works–and How It’s Transforming the American Economy. Boston: Pearson, 2006.
Ingram, Paul, Lori Qingyuan Yue and Hayagreeva Rao. “Trouble in Store: Probes, Protests, and Store Openings by Wal‐Mart, 1998–2007.” American Journal of Sociology (2010): 1: pp 53–92.
Lichtenstein, Nelson. The Retail Revolution: How Wal-Mart Created a Brave New World of Business. Boston: Pearson, 2009.
Rice, Jennifer. Maslow and Marketing. 2006. Web.
Russell, Daiv. Successful Marketing with Maslow. 2010. Web.
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