Category: Walmart

A brief synopsis/summary of Wal-Mart Stores Inc

Wal-Mart was established in 1945 in New Port, Arkansas and grew exponentially to become the biggest retail outlet in America by 1990. Today, Wal-Mart is one of the companies listed at New York Stock Exchange. Wal-Mart is best known its efficient operations and its cost leadership.

It has a vast distribution channel as well as an automated and central purchase system. Wal-Mart prides itself as the promoter of local small and medium enterprises (SMEs) through the umbrella campaign dubbed Buy American. The company continuously seeks to build and protect its powerful The Wal-Mart Effect brand. Wal-Mart operates through various segments: Wal-Mart Stores, Sams Clubs, and International.

The likely problems/issues/challenges faced, using the case as illustrations of the theories/concepts

Managing change, culture, and diversity

An analysis of Wal-Mart using human resource (HR) theories and concepts reveals that even though the company has enjoyed considerable success over the years, it is still faced with several issues. First, Wal-Mart still grapples with the challenge of the best way of managing change, culture, and diversity.

The challenge of culture and diversity has been heightened by the fact that Wal-Mart now operates internationally. International business is usually characterized by several changes and an array of cultural issues. Therefore, the company must be prepared to recruit and retain employees from diverse cultures if it is going to succeed in its international engagements.

Communication and public relations

Wal-Mart strives to ensure that there is timely, regular, and accurate information for decision making by holding regular meetings. Two sets of meeting are conducted at Wal-Mart: store meetings and Saturday morning meetings held at headquarters. In these meetings, policy changes are communicated to associates.

Managers also get to hear relevant and fast hand information about the challenges faced by the associates. Wal-Mart seeks to maintain a positive image through The Wal-Mart Way brand. This slogan seeks to communicate the companys unwavering commitment to quality improvement.

Social responsibility

Wal-Mart has not been left behind in the area of community involvement. The company supports Welfare-to-Work and educational programs. Wal-Mart reimburses associates and their partners for the expenditure they incur in getting GED. During the year 1999 alone, Wal-Mart gave about 3000 sponsorships to high school students on merit. This amounted to over $8 million. Wal-Mart supports youths with disabilities, fund raises for schools, and educates the public about recycling.

Staffing and succession planning

Wal-Mart is faced with the challenge of recruiting, retaining, and developing the best employees. The companys people division recruits two categories of employees: managers and associates. Managers are salaried employees while associates are paid hourly. Wal-Mart struggles to maintain adequate staff levels for its head offices and departmental stores by recruiting over 1500 employees annually. This number is definitely high even for a big institution like Wal-Mart.

Training, development, and career progression

Continuous employee training and development is another issue facing Wal-Mart. The company conducts continuous training for store managers, their assistants, and the departmental managers. Managers are trained on-the-job as well as through book work after which they are assigned roles at the store.

Wal-Mart creates several career paths to provide opportunities for growth. These include finance, information systems, and international business. Through the Walton Institute for Retailing, the company is able to identify and nurture talent for purposes of future leadership positions.

Compensation, motivation, and employee engagement

Wal-Mart grapples with the challenge of adequately compensating and motivating its employees. The company continuously seeks to employ best reward strategies such as stock options and management incentive plans. These make employees feel proud and have a sense of belonging to the organization.

Wal-Mart engages employees by seeking their opinions and implementing the valuable ideas they suggest. To make employees feel valued and cared for, the company has implemented an open-door policy in which employees are free to approach their managers to discuss their problems at any time.

Performance management and employee productivity

Wal-Mart believes in evaluating the performance of its employees. The company believes that setting high expectations is the key to strategic competitive advantage. The company seeks to inculcate a culture of hard work, innovation, and continuous improvement amongst the employees.

All managers and associates are evaluated and outstanding employees rewarded on merit every year. The evaluation is done based on four parameters: below standard, standard, above standard, and outstanding. Wal-Mart also rewards employees who offer best suggestions on how to improve the business. This boosts their morale, leading to increased productivity.

Why these are the problems/issues/challenges faced by the company and if there are any indications

Just like other business organizations, Wal-Mart grapples with a myriad of HR issues. These include staffing, employee retention, performance management, employee training, succession planning, and motivation among other issues. There are many indications that Wal-Mart, though successful by all standards, still has to adopt best practices in dealing with these issues.

With operations beyond America, the company is grappling with the challenge of creating an organizational culture that will give it a competitive advantage even in its overseas operations. Likewise, there are indications that the company is faced with several recruitment challenges. For instance, the company must hire over 1500 employees yearly to ensure adequate numbers of staff.

Solutions to the problems/issues/challenges and the implications of such solutions

Wal-Mart must practice strategic human resource management to address the above issues. For instance, the company can practice strategic recruitment. This implies achieving a strategic fit between the employees talents with the organizational objectives. Further to this, Wal-Mart must continuously seek to strengthen its culture and continue embracing more diversity.

The business must continue investing in its social responsibility initiatives, seek to further strengthen its brand, and continue to develop its employees. The implication for this is that the company will gain further acceptance within the community. This will draw more customers leading to higher profits.

Lessons learnt

Wal-Mart should continue to diversify its compensation plans to include such measures as pay-for performance (P4P). The business should also continue to diversify its ways of motivating employees and adopt strong performance management systems. All these measures will have the implication of creating a performance oriented culture, well developed workforce, more productive employees, and consequently, a more profitable business.

In order to build a reputable brand, businesses should be resilient in pursuit of efficiency and effectiveness. Furthermore, businesses should not relent in their quest for continuous quality improvement. They must embrace change and create a unique culture that promotes employee involvement and motivation while also drawing customers. The business must adopt sound HR practices that achieve organizational excellence through efficient and highly motivated, productive, and loyal employees.

Importance of learning and growth

The balanced scorecard is a strategic planning and management system that is used by businesses, governments, and others organizations to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It can be discussed under the following;

Mission  A manager is expected to know how well their product is running, and whether the organizations products and services meet the customers demand. The mission of any organization has to be designed by those who understand the process well and have ideas since a mission should be a unique one which cannot be easily copied by the outsiders.

For any organization to achieve its missions, it must align the organizational functions with its objectives by centering on the staff and their roles in attaining the companys objectives (Gumbus & Johnson 2003).

Balanced scoreboard strengthens a companys ability to follow up and boost learning-and-growth enablers, unveils things in learning-and-growth that the management might not have noticed or even thought of. Additionally, it reinforces a firms ability to connect learning and growth enablers to the integral business processes and customer experiences, thus refining approach. Finally, it enables those in management to answer some fundamental questions that they lucked answers for (Kaplan & Norton 2001).

Strategy  this is necessary for any business to achieve its objectives because it gives directions and connect between objectives and also involves allocation of finance and this helps in reducing the risk of liability suit in that they work towards reduction of financial loss from the liability, loss of customer intimacy and loyalty, deficiency of internal checks and balances and promotion policy.

When putting a strategy, growth is the main achievement we want therefore we must put into consideration our current clients and now aim at getting more customers and this depends on the quality of goods we produce our speed (Demick & Miller 1993).

Objectives  Improving the objectives found in learning and growth perspective enables the organization to improve its internal process perspective objective which in turn enables the organization to create desirable results in the customer and financial perspectives (Kaplan & Norton 2004).

Here, the ability to sustain changes and improvement are dealt with and the final outcome of the product is considered before being dispatched to the customers. Customer complaints are dealt with to ensure that they are satisfied and goods delivery is on time (Niven 2010).

Measures  To achieve a business mission consistently, it is necessary for any business to measure its achievements and sustainability. Sustainability and profitability can only be achieved if customer satisfaction is increased because this promotes sales hence increased income resulting to generations of return customers which can be measured through tracking data from the distribution channels.

In many organizations we find that with achievements of the mission. Corporate citiaenship, interdepartmental collegiality, and cultural maturity are monitored-with a goal of employees moving to the next level during their performance review (Demick, 1993).

Learning enhances growth because as new technology is implemented, employees need new skills, therefore the two works together. The management needs to give incentives to the employees and also offer training.

References

Demick, J. & Miller, P. M. (1993). Development in the workplace. Hillsdale, N.J.: Erlbaum.

Gumbus, A. & Johnson, S. D. (2003). The balanced scorecard at Futura Industries. Strategic Finance. 85(1). 36-42.

Kaplan, R. & Norton, D. (2001). The strategy-focused organization. New York: Harvard Business School Press.

Kaplan, R. S. & Norton, D. P. (2004). Measuring the strategic readiness of intangible assets. PDF file. Web.

Niven, P. (2010). Learning and Growth perspective. EPM Review. Web.

Introduction

Wal-Mart is one of the leading retailers in the world. The company is incorporated in the US and operates international outlets in a number of countries across the world too. It employs many people through its numerous facilities in the US and other nations.

Wal-Mart history

Wal-Mart dates started in the early 1960s when the discount retail industry had started picking up. In 1962, Sam Walton risked all is property to secure finances to start-up a new venture in the discounts retail industry.

In the same year, three other discounts retail stores commenced their operations. These stores included Kmart, Target, and F.W. Woolworth (Wal-Mart, 2012).

The first Wal-Mart was started in Rodgers, Arkansas. The company seemed less likely to succeed as compared to the other discount retail stores.

Aware that the business was bound to face stiff competition from new entrants in the industry, Sam sought to expand and grow Wal-Mart as quick as possible to seize the available opportunities.

For this reason, Wal-Mart expanded to other towns such as Oklahoma, Missouri, and Kansas. By the year 1967, Wal-Mart had 19 stores and recorded sales of $9 millions.

Kmart, the industry leader at the time, had 290 stores and a sales volume of $800 million in the same period (Wal-Mart, 2012).

Wal-Mart was plagued with many challenges in the early years of its operation that rendered its growth difficult. Sam was so much in debt that available funds were not sufficient to sustain business growth beyond Arkansas, Missouri, and Oklahoma.

Furthermore, Wal-Mart also faced with high costs of operation. Large vendors were unwilling to deal with Wal-Mart, and if they agreed to supply stocks, they dictated the prices and the quantities of the items that were sold in stores.

Additionally, distributors were discriminative in the way they handled their services to Wal-Mart compared to other large competitors in the industry (Wal-Mart, 2012).

Sam Walton issued Wal-Mart shares to the public in an effort to counter the above challenges. This enabled the business stock offerings to increase in value from $1,650 to over $3,000,000 during the early 1990s.

Additionally, the store decided to build its own warehouse to enable purchase of voluminous merchandize at attractive prices. This led to a considerable reduction in costs.

By the year 1985, the company had expanded and increased its stores from 32 in 1970s to 859. In the years between 1985 and 1990s, Wal-Mart had expanded from small towns in the South where it had a strong presence throughout big cities and towns in the US.

In late 1990s and early 2000s, Wal-Mart was the top discount retailers in the US. During this period, Wal-Mart reduced the number of stores by converting them to supercenters, which increased by almost six times to an approximate of 2,843 stores by the year 2006. At the same time, Wal-Mart also operated 607 Sams Clubs by the year 2010.

Industry description

Wal-Mart operates in discount retailing industry within the US. The discount retailing industry in the US has evolved tremendously over the last half century. Customers were never allowed to pick products by themselves from the shelves.

However, the sale clerks served them directly over the customer. Discount traders started emerging in 1950s were characterized by low commodity prices, limited credit to customers, and low return privileges.

The retail stores during these early stages were categorized into general and specialty chains. Specialty chains mostly dealt with narrow product lines such as sporting and office products. General Chain carried a wide assortment of product range.

Discount stores enjoyed much success due to low prices and their emphasis on customer convenience, value, and quality. Major players in the general chain discount retailers were established in 1960s. These players include Kmart, Wal-Mart, Target, and Woolworth.

Over the past decades, the discount retailing has witnessed sporadic industry boom in the US. Numerous retail stores have mushroomed and gained substantial growth across the US. The industry in the modern days has become consumer-driven hence creating market challenging conditions.

Technology has accelerated the rate of discount retailing industry. Over the years, many stores have heavily invested in sophisticated management systems, state-of-art distribution centers, and other technological platforms have enabled the industry to grow tremendously.

These innovative technologies have reduced operation cost significantly in distribution, marketing and so much more.

Competition

Wal-Mart faces stiff competition from both general and specialty discount retailers. Over the years, Kmart has been the most dominant Wal-Mart competitor. The onset of discount retailing industry in 1962, Kmart was the leading industry performance and Wal-Mart was thrown to the periphery for quite some time until Sam Walton successful turnaround of the store.

Kmart was hard-hit severely by crises that enabled Wal-Mart to catch up and become the industry leader successfully. Kmart tried to imitate Wal-Mart strategies but could not catch up.

Kmart suffered dramatic losses as high as $300 million in the period between 1993 and 1995. Kmart successfully managed to turnaround through restructuring of the business, but only little impact was felt by the year 2004. By the year 2010, Kmart operated 1,300 stores with sales volume of $17.2 billions.

Target is the second fiercest Wal-Mart rival in the industry. Over the years, Target Company has attracted and retain customer through offering upscale product mix. Furthermore, Target has been able to attract a considerable clientele through store ambience that is greatly superior its entire rival in the market.

Target has been also been able to overshadow its competitors through designer products. The introduction of Target Guest Card has critically enabled Target Company to differentiate itself from its competitors. Currently, the major Wal-Mart competitors include Kmart, Target, Khols Corporation, Sears, Woolworth, and many other stores.

Wal-Mart SWOT analysis

SWOT analysis is critical in the strategic management of organizations. SWOT is an integrated approach that analyses the internal strength and weaknesses of a company (Hill & Jones, 2013).

In addition, the external environment is also considered to identify available opportunities that are vital in the achievement of organization strategic goals and the same time identifying the potential threats that can affect its strategic goal achievement (Hill & Jones, 2013).

Wal-Mart has achieved great success since its inception. However, the company has recently stumbled and is facing increasing competition from its perennial rivals, and other new comers like Sears.

On the strength side of Wal-Mart, the company is a strong and very powerful retail brand across the US. The store is well re-known as a home of value. The store is also convenient where goods are availed in one place. Additionally, the company has comparatively established core competencies as compared to its competitors.

Its core competence comes because of its international logistical system and efficient information technology system, which ensures efficient procurement. Furthermore, it has focused human resources management that heavily invests in training, retaining of employees that offer the company substantial strength in the industry.

Wal-Mart is also advantaged by its cost leadership position in the industry thus affording to offer its goods and services to customers at reduced prices. The cost leadership enables Wal-Mart to achieve greater buying power suppliers as compared to other companies.

Wal-Mart does also have weaknesses. The company is a general store that sells a wide range of products. The company has inflexibility weaknesses since it cants cope with specialty focused retailer competitors.

Additionally, though the company is global, its presence in the world is only but limited to few countries. Lastly, due to the expansiveness of the company, control of its outlets may pose some challenges.

The analysis of the external environment presents the Wal-Mart with a number of opportunities. Firstly, due to its stature in the industry, Wal-Mart is presented with an opportunity to seek strategic alliances, and mergers with other leading local and global retailers focusing on certain market niche.

Additionally, analysis of the external environment suggests unmet targets in the supercenters business. Therefore, this presents Wal-Mart with an opportunity to continue with is current supercenters strategy. The company has an opportunity to take charge of market development through diversification to mall-based sites.

Finally, there is an opportunity for the company to increase its investment in foreign countries. This is especially in the emerging markets such as China and other European nations. On the other hand, the biggest threat is increasing competition from local and international competitors.

Additionally, the political and media attention about the company threaten the company in terms of its image and operation. The declining manufacturing prices presents a threat to the company since it may result to intense price competition.

Conclusion

With ever-increasing competition in the retailing industry, the Wal-Mart management team should take bold steps to ensure that the company remains the market leader.

The company can take advantage of the numerous strengths at its disposal to position itself in the market. Furthermore, the company needs to utilize the available opportunities in the industry to strengthen its market leadership further.

References

Hill, C. W. L. & Jones, G. R. (2013). Strategic management theory. Mason, Ohio. Cengage Learning.

Wal-Mart. (2012). Wal-Mart. Web.

Best Buy was criticized in the year 2007, alongside other large companies, for contributing to the destruction of the environment. Greenpeace blamed the giant American consumer electronics retailer for purchasing materials from logging companies and thereby contributing to unethical, reckless and shameless destruction of forests in Canada.

Since it was dressed down in public, however, Best Buy instituted a sustainability strategy to demonstrate the companys long-term commitment in environmental, social and economic responsibility.

Dubbed Greener Together, the strategy seeks to minimize consumer waste and involves a recycling program for outdated electronic products, as well as an initiative that seeks to increase energy efficiency of the companys products.

Under the same business sustainability strategy, Best Buy also committed itself to repackage its products in recyclable and biodegradable material and to provide proper disposal of certain toxic electronic components such as rechargeable batteries.

Wal-Mart, on the other hand, was the first American giant retailer to earn a reputation for speaking in favor of the environment. In the year 1989, the company was held in high esteem and honor, especially by environmentalists for promoting green products. In October 2005, Wal-Marts President and CEO re-launched an ambitious sustainability strategy.

The sweeping business sustainability strategy, which was announced in Bentonville, Arkansas, was aimed to transform Wal-Mart to be the worlds most competitive and innovative company.

According to the strategy which was launched inside a full packed auditorium and broadcast to over a million business employees and associates, the company was determined to create zero waste and to sell products that are sustainable to resources and friendly to the environment. Wal-Mart also planned to have all its energy requirements supplied by renewable energy.

True, most businesses are not established for charity but are instead more concerned about making huge, quick, short-term profits at the expense of the environment. Yet, there are many reasons Wal-Mart should reintegrate sustainable business practices. As CEO Lee Scott himself stated, being a good steward of issues related to the environment and doing profitable business are one and the same thing.

Thus, Wal-Mart should view sustainability not only as a responsibility but also as a business opportunity. The company should be proactive in environmental issues by encouraging the suppliers to provide environmentally safe products and by repackaging goods that they deliver to their customers in recyclable and biodegradable material.

Waste-reduction strategy, for example, can help the company make savings from the resultant reduction in disposal costs. Enhancing energy efficiency, on the other hand, can lead to a reduction in costs and hence result in increase of the companys profits. Most governments today have in place strict laws and regulations to ensure sound management of the environment and proper utilization of resources.

Sustainable practices will, therefore, avoid environmental penalties and help reduce insurance liability. Again, a company that embraces social and ecological concerns in its business operations stands a good chance of expanding its market territory as a result of an improved public image.

Moving towards sustainability can be challenging, costly and calls for social responsibility and ethical consumerism. Wal-Mart should, therefore, renew its effort in sustainability to re-affirm the company as a steward in responsible management of resources.

Like Best Buy, the multi-national retailer Wal-Mart should work to improve its public image by practicing sustainable business and by incorporating social, economic and ecological concerns in its operations.

Introduction

Wal-Mart is regarded as one of the great companies in the US. The company has also spread to other parts of the world. The company specializes in the retail industry where it has stores across the United States. Wal-Mart was started in the year 1915. The company has grown to become one of the biggest multinational companies in the world.

Notably, the company has expanded its subsidiaries all over the US. People have viewed the growth and expansion of Wal-Mart differently. Proponents have seen this as being of great benefit to the American people while others have seen it as a move that has brought numerous disadvantages to the Americans (Freeman 38).

Those who do not see the benefit associated with the growth of Wal-Mart note that the move has done little to support the economy. It has been noted that the expansion of Wal-mart has led to the destruction of many job opportunities than it has created. In addition, Wal-Mart employees do not have health coverage or are inadequately covered by the company.

It has also been noted that the company has contributed to environmental degradation in a huge way. Although the company is argued to have created massive employment opportunities through its stores spread across the US, it can be noted that many jobs have lost since small businesses have been forced to close shop in areas where the Wal-Mart is established.

The company has been praised for its convenience and offer of a wide range of products, and this makes it difficult for small businesses to compete with it. In addition, the suppliers of the retail company are from overseas, and this does not help the growth of local production. This leads to loss of employment from the local manufacturers.

The company also does not pay its staff competitively. This is worsened by the fact that the employees are subjected to tough working conditions. In addition, it was established that the company had a negative impact on the family poverty rates. This was drawn from a study that was conducted on in counties where Wal-Mart stores. The study was done between the years 1987 and 1998 (Goetz & Swaminathan, 212-214).

Apart from those opposed to the company growth and its effects, there are those who argue that Wal-Mart growth has had positive effects on the Americans. Indeed, the company has been promoting energy saving measures. This is exhibited in the use of energy-saving bulbs, which are also prominently displayed on the shelves.

This way, the company is set to influence people into adopting eco-friendly energy use. Furthermore, the company sales cheaper drugs that are affordable to most people with low income. In a research that was done, it was noted that the earnings per job reduced in areas where the company had established its retail stores (Fitzgerald, 1-3).

Thesis

The growth of Wal-Mart as the world leading retail store has come with various effects on the people. It can be noted that Wal-Mart has affected the American people in great ways. Although its low pricing strategy has been hailed as a positive element, there are other negative elements associated with the company.

For instance, the employees of the company are let to work under unfavorable conditions (Freeman 38). Thus, Wal-Mart has created both negative and positive aspects to people in areas where the company has established its stores. There is a need to critically analyze the effects that this multinational company has had on the people in the United States.

Works Cited

Fitzgerald, Terry J. & Ronald A. Wirtz. The Wal-Mart effect: Poison or antidote for local communities? Fedgazette, 20.1 (2008): 1-5.

Freeman, Edward, E. The Wal-Mart Effect and Business, Ethics, and Society. Academy of Management Perspectives, 20.3 (2006): 38-40.

Goetz, Stephan J. & Hema, Swaminathan. Wal-Mart and County-Wide Poverty. Social Science Quarterly, 87.2 (2006): 211226.

To begin with, Wal-Marts overall business strategy is composed of goals, core activities, and product-market focus (Heizer & Render, 2011). The goals of the company are to dominate markets, utilize low cost systems, promote high growth, and to do it the Wal-Mart way (Krajewski et al., 2009).

The core activities of the organization are to integrate logistics, manage them intensely, and to tailor them according to the local situation. The product-market focuses entails provision of branded general merchandise, value oriented customers, develop easier markets first, and to work from regional hubs. All these contribute to the value proposition of the organization (Stevenson, 2008).

The supply chain strategy of the organization entails purchasing the goods and materials that the company uses for the lowest prices available in the market to them to retail at customer friendly prices. The organization is known to bypass intermediaries and middle men and to negotiate intensively during purchase of goods, services and materials (Heizer & Render, 2011).

The organization is also known to prefer local manufactures as well as preferring the manufacturers that demonstrated transparent cost structures. The organization then establishes long term relationships with these types of manufacturers. The organizations logistics are among the most efficient in large businesses today (Stevenson, 2008).

Distribution centers are served by a fleet of not less than 3000 trucks that are owned by the organization. These are for the purpose of transporting goods to the Wal-Mart outlets twice every week due to the high flow of goods from the organizations individual stores. These are supervised by a coordinator.

The organization employs cross-docking for the purpose of managing the acquisition of goods from their suppliers. In addition, decisions concerning merchandising, pricing, and promotions have been decentralized and left to the market forces; this is managed by stores, distribution centers, and suppliers (Krajewski et al., 2009).

The organization has instilled information technology and communication systems to aid their inventory management and set up its own satellite communication system in the 1980s. The satellite connected the organizations numerous stores as well as the organizations suppliers to the organization.

This was done for the purpose of enabling the organization to attend to the individual needs of individual stores in a timely manner and to enable the workers to update themselves on all aspects of the inventory in stores, deliveries, and back up merchandise at the organizations distribution points (Heizer & Render, 2011).

The organizations supply chain enables the organization to meet its goals that have been outlined earlier in this essay (Krajewski et al., 2009).

Due to establishment of an ICT system specifically for the organization, the organization has successfully managed to reinforce their relationships with their customers, employees, individual stores, and their suppliers. This has enabled the organization to have value-oriented customers, to have an integrated logistics system, ensure that their stores always have sufficient stock, and thus promote the business as reliable to its customers, employees and suppliers alike.

The organizations ability to search and engage only the lowest cost supplier as well as having their own transportation has paid dividends as well (Stevenson, 2008). The low costs were passed on to the customers as well and this added value to the organizations every step and process.

In addition, the ownership of its own fleet of vehicles also lowered costs and enabled prompt availability of the goods to their customers. This has resulted in the domination of markets by the organization, high growth, friendly prices for their goods and availability of these goods at all times (Krajewski et al., 2009).

In conclusion, this organizations supply chain and overall strategy has enabled the organization to realize shorter time in inventory turnover, prompt and correct prediction of inventory levels and enabled utilization of working capital among other benefits (Stevenson, 2008). The Wal-Mart model is touted as one of the best in supply chain management owing to the benefits it has accorded the organization and given it an edge over its competitors (Heizer & Render, 2011).

References

Heizer, J. & Render, B. (2011). Operations Management (10th ed.). Boston, MA: Prentice-Hall.

Stevenson, J. (2008). Operations Management. London: Continuum.

Krajewski, L. Ritzman, P., & Malhotra, K. (2009). Operations Management (9th Edition). New York: Academic Publishers.

To improve the response time to customer request and speed up times transactions. The company is adapting to internet shopping and has set up a separate subsidiary to handle the internet purchases. This is in addition to the company policy of having more than one register open at a counter so that payments by customers are handled faster.

Reduced transaction time is targeted at increasing the efficiency of the company business operations as indicated in its vision of achieving excellent operational efficiency. The company will rely on the customers value for efficient service that will drive them to the Wal-Mart store rather than individual online supply stores.

The company has to ensure that its inventory management and shipment of goods purchased online are synced and backed up to provide a robust system that builds customers trust. To this end, the company is includes an order tracking feature and a gift return option (Knowledge@Wharton, 2000).

To enhance its internal control department to be able to control the companys growth imperative so that they company suffers less from problem associated with its big size. The company can measure its success in controlling the company growth through an audit on its return on investment.

Investments that make business sense and increase Wal-Marts overall aim of operational efficiency impact positively on the internal business processes of the company. These investments are impact on the organizational aspect of the business eliminating losses of time or equipment.

For example, technological investments leverage on the overall business strategy of being just in time, like the use of Radio Frequency Identification (RFID) tags to track inventory from suppliers to consumers that eliminated any blockages along the supply-chain management system.

The placement of RFID tags on inventory also reduces the tendency of employees to steal from the company because the technology improves and speeds up tracking (Malhotra, 2005).

Abolish all excesses, through reduction, recycling and reuse of all supplies that moves into the companys stores, by 2025. To achieve this objective Wal-Mart intends to reduce the level of packaging within its store supply chain by five per cent by 2013.

The company is developing sustainable packaging solutions in conjunction with its suppliers. In addition, the company has implemented a strategy that persuades customers to buy reusable bags for shopping.

The objective has targets customer satisfaction in a green conscious environment and aims at increasing the overall efficiency of the companies operation, which reduces costs in the long term that would otherwise be attributed to waste management. Reusable bags will assist the company to cut its plastic bag excesses by a third by 2013.

The company is incorporating various environmental sustainability efforts such as making dog beds out of tattered plastic bottles. The company runs fifteen supply trucks on biofuel out of the grease collected from its chicken roasters.

In addition, the company seeks to test four new types of fuel-efficient trucks. Other notable actions include the installation of solar power system on its Mexico store and adoption of a new sustainable design of its stores that incorporate recycled chimneys and use of soya beans instead of plastics to create floors (Environmental Leader, 2009).

The objective on reducing waste adds to the financial objective of cutting expenses because it saves on costs on the excess purchases. Recycling also lowers costs for purchase of new material and saves the company of legal requirements on sustainability.

Increasing the companys presence on the internet and making the online shopping system robust builds customer satisfaction and results to word of mouth advertising that is a boon to the profitability of the company as it increases overall purchases.

References

Environmental Leader. (2009). Wal-Mart Wants to Eliminate All Packaging Waste by 2025. Web.

Knowledge@Wharton. (2000). Walmart.com Round Two: Jeanne Jackson Does Some Remodeling. Knowledge@Wharton. Web.

Malhotra, Y. (2005). Integrating knowledge management technologies in organizational business processes: getting real time enterprises to deliver real business performance. Journal of Knowledge Management, 9(1), 7-28.

Introduction

Wal-Mart is a leading multinational company from the United States. The leading retail company experienced growth since its establishments, which resulted in presence in more than 15 countries across the globe (Czinkota & Ronkainen, 2012).

The successful expansion of Wal-Mart in the domestic and international market is mainly down to the cost leadership strategy that enables saving of customers money through discounted products.

Although the company experienced constant expansion of global markets, there have been instances of failure, particularly in Germany, Japan and Korea. The success and failure of the company in some markets require an analysis of the companys strategies to identify areas of weaknesses and recommend strategies for success.

Cultural problems encountered in various markets entered

In expansion into various international markets such as Japan, Germany and South Korea, Wal-Mart experienced cultural challenges, which compromised success in the new markets. For instance, in Germany problems with management culture and failure to understand the local culture resulted in the companys failure.

For example relationship with employees was not appropriate, as the company treated German employees like American employees, which resulted in annoyance and low morale. The company violated on ethical codes with their spying on employees proving unacceptable among Germans (Ivey Publishing, 2013). The tendency to disregard employee feedback many employees feel ignored and they became apathetic about the company.

The company failed to understand the local culture and buying behavior of Germans, which meant inadequate responsiveness to market needs. Wal-Mart has an arrangement that results in much time spent in the store, which is against peoples preferences in foreign markets. In fact, most customers prefer time efficiency and want the least time spent in retail stores.

The situation was similar in Japan and South Korea will cultural variances resulting in employee frustration and lack of customer satisfaction leading to poor organizational performance in the countries. Unlike the popular perception of Wal-Mart in America and other foreign markets, the brand became unpopular in Germany, Japan and Korea (Ivey Publishing, 2013).

Successful strategies for Wal-Mart in foreign markets

The success of Wal-Mart in expansion to global markets is based on its unique retail strategies, which developed a strategic framework to ensure continuous and sustainable growth. At the core of the successful strategy is the policy of maintaining low cost operations to ensure customers buy products at the lowest prices.

The customer needs are at the center of all store formats in global establishments, which results in higher growth rates than competitors in the global foreign markets. Saving money for customers is the key driver for growth as opposed to competitors who focus more on growing return on investment through profitability and sales growth.

More importantly, the company endeavors to establish fruitful relationships with stakeholder, especially employees and suppliers as well as detailed consideration in the design of outlets and merchandizing approaches. The company creates the spirit of high performance and takes on every opportunity to save operational cost.

The strategic formula enables Wal-Mart to achieve an effective marketing mix by providing high quality to customers, effective placement, and pricing of products. The industry leadership and successful global expansion are also due to the cost saving approach, which the retail store passes on to customers through competitive pricing.

The company has major retail capabilities and endeavors to improve the retail processes through central management and investment for long-term gains (Ivey Publishing, 2013). The company management is ready to test, adapt and use effective merchandizing techniques in new markets for success, especially by learning from the success of other retail stores in the market.

Through a major investment in the distinct cross-docking system of managing the inventory, the company achieves economies of scale, which is a major aspect of the low cost and price strategy.

Cross-docking ensures continuous availability of products, which are sold immediately without necessarily storing them. Furthermore, the low pricing strategy means the retail giant does not need frequent promotions that add costs (Ivey Publishing, 2013).

Experience from Germany and Japan

From the cases Wal-Marts expansion to Germany and Germany, it is apparent that cross-cultural and international business presents major challenges even for large multinationals (Czinkota & Ronkainen, 2012). The experience of the two countries indicates the need for multinational companies such as Wal-Mart to be aware of local cultures and customize the market proposition to the foreign markets.

For effective localization of products and services, organizations should conduct adequate cultural research before moving to new countries and ensure continuous assessment of local cultures. Continuous assessment enables firms to measure their localization strategies and develop adaptation strategies in markets.

The experience in Japan and Germany markets is a clear indication that multinationals can fail in foreign markets unless they understand the local culture to leverage on the benefits of the international markets. Lessons from Wal-Marts experience in Germany and Korea offer important lessons for international companies seeking global expansion (Czinkota & Ronkainen, 2012).

Investing away from the host country requires several considerations including culture. Although foreign markets offer opportunities for expansion and market growth, there are challenges such as indoctrinated cultural biases that call for effective strategizing.

Ghemawats CAGE Distance between US and SA

The four major dimensions of distance elaborated by Ghemawat reveal critical differences between the United States and South Africa. Wal-Mart must consider the cultural, economic, geographic and administrative differences.

Geographically, the company will have to adjust its transportation and communication functions because it deals with bulky products, which require effective coordination. Culturally, there is the relative difference in American and South African consumer tastes and preferences, which also covers aspects of media communication (Czinkota & Ronkainen, 2012).

Potential in African market

Africa has a market potential owing to an increase in the number of middle class people in the continent who are buying from the food industry. Even in global economic downturns South Africa and other parts of Africa experienced positive growth in major industries.

Governments and other stakeholders are making significant investments in infrastructure, which supports the distribution of products and services as well as market penetration (Ivey Publishing, 2013). Furthermore, various food products are in short supply because of limited production potential, a gap that can be filled by Wal-Mart.

African companies dominate the food retail industry and the industry accounts for significant parts of the total revenue from retailing. Convenience is a major aspect of the growing middle class, which represents an opportunity for Wal-Mart.

The food retail industry is going through transformation in terms of market preferences, retail trends and consumer tastes, with most consumers preferring healthy living and general wellness. Apparently, Africa, especially South Africa has potential for expansion of Wal-Mart and penetration of untouched market territories (Ivey Publishing, 2013).

Cultural challenges in Africa

Wal-Mart must consider the diversity in African cultures, understand and respect the cultures for success. For instance, with an estimated 800 languages used on the continent and more than 11 official languages in South Africa, the company must develop effective strategies. Other cultural problems include the preferred relationship-building approach in Africa as opposed to the bureaucratic approach of the west.

The continent has a general culture of autocracy and strict adherence to hierarchy. The system is more political and less transparent with high prevalence of paternalistic attitudes in specific cultures. Furthermore, there is significant individualism in a hugely collective society. There is a relatively higher level of ambiguity and people do not have high value in the concept of time (Ivey Publishing, 2013).

Recommendations for success in Africa

From the discussion of Wal-Marts global strategies, the company management has an obligation of ensuring effective management of stakeholders in the emerging African market. It is important for managers to understand the socio-political and cultural environment of the African market and develop a clearer feeling of the difference in cultures between the company system and Africa.

There should be a close involvement of the corporate center in developing and executing effective entry strategies for the retail company and the CEO should maintain constant engagement with stakeholders directly. The organization and its leadership should not use acquisition to avoid the responsibility of direct engagement with stakeholders.

Indeed, while the target company for acquisition may provide important advice, Wal-Mart must not view it as a substitute to stakeholder engagement. More importantly, the company should embrace effective communication and feedback to obtain an understanding of issues in the African market to design strategies aimed at solving the specific issues.

Success in Africa entails making sacrifices in the present to reap benefits in the future. Respecting the African culture and way of doing things is important in achieving support for company operations in the continent. The company should take part in the support of socioeconomic development projects.

References

Czinkota, M. & Ronkainen, I. (2012). International marketing. Boston, MA: Cengage Learning.

Ivey Publishing (2013). Walmarts African Expansion. Web.

Introduction

This paper presents the case of Wal- Mart stores, a large retail company that runs different warehouses and departmental stores in different parts of the world.

From the case study, the paper presents the significance, scope and magnitude of the phenomenon and identifies the dilemma faced by the management through the use of the Management-Research Question Hierarchy. A management research question hierarchy is a process through which solutions to a particular situation or management dilemma is sought (Doane & Seward, 2010).

Significance, scope, and magnitude of the phenomenon

The research study was carried out to include all Wal-Mart stores in the US. The company, during these harsh economic times, is facing a serious reduction in sales, with a record of a 2.6 percent reduction in store visits.

The 82.8 million drop in visits, during the first 5 months of this fiscal year, comes at a time when the companys competitors, such as the Dollar General Corp and the Kroger Co., have recorded an increase in sales (MMR, 2011).

Management Dilemma

This defines the existing problem that needs to be solved (Cooper & Schindler, 2011). The current issue faced by Wal-Mart is that of reduced traffic of clients in their stores, hence, a reduction in sales.

Management Decision

This identifies the final decision made on the action to be taken to solve the existing dilemma (Cooper & Schindler, 2011). Wal-Mart needs to ensure that they address all the current demands of their clients as a way of ensuring customer retention.

It is important that the management rebuilds the companys leadership in prices as well as delivers all that its clients require. According to the CEO, Bill Simon, the company is working towards ensuring that providing a range of quality products at reduced prices all the time.

Conclusion

Wal-Marts management dilemma has been described as being reduced sore traffic that has, in turn, reduced sales. By identifying this dilemma, the management-research question hierarchy has identified the management questions research questions, investigative questions and the measurement questions. The management decision has also been identified to provide a solution for the managements dilemma.

References

Cooper, R. & Schindler, S. (2011). Business Research Methods. NY: McGraw-Hill Irwin.

Doane, P. & Seward, E. (2010). Applied Statistics in Business and Economics. NY: McGraw-Hill.

MMR. (2011). Walmarts Dilemma. Mass Market retailers, 22: 16.

Introduction

Walmarts success in Mexico can be attributed to its competitive cost-reduction strategy. The implementation of NAFTA helped to solve most of the problems that Walmart was facing. Part of the success comes from the new manufacturing companies that established in Mexico. The production of goods in Mexico reduced Walmarts reliance on imports.

Improved infrastructure played a role in enhancing the effectiveness of the firms logistics system. Walmart faces reduced growth in the U.S. market, and varied success in the international markets. There is a culture clash between subsidiaries managers and the groups executives. The firm can use local brands to enter new markets. There is a greater opportunity if Walmart can exploit the unmet needs in the emerging markets.

Analysis

The implementation of NAFTA helped to solve most of the problems that Walmart was facing (Daniles, Radebaught and Sulivan 365). Walmart is known as a low price retailer. Without NAFTA, Walmart was finding it hard to maintain low prices. A tariff rate of 10% made it difficult to compete with local firms (Daniles, Radebaught and Sulivan 365). It shows that Walmart relied on imports, before the formation of NAFTA.

Walmarts success can be attributed to NAFTA, which is based on imported goods. Part of the success comes from the new manufacturing companies. As a result of the new manufacturing companies, Walmart does not need to import some of the products. The tariff rate is 3% in the post-NAFTA era (Daniles, Radebaught and Sulivan 365).

Walmart can obtain the goods at a free-tariff rate if they are manufactured in Mexico. The manufacture of goods in Mexico helped Walmart to avoid imports. Freight costs and tariffs are eliminated as a result of local production. NAFTA helped to reduce the cost of imported goods.

Part of the success comes from improved infrastructure. Better infrastructure has helped Walmart to solve the logistical problems that it encountered when it entered Mexico (Daniles, Radebaught and Sulivan 364). The firm was finding trouble to use its experience in logistics because Mexico lacked supportive infrastructure. The Mexican government and the private sector have been involved in improving infrastructure.

Any American firm would have encountered similar logistical problems. Walmarts central distribution centers have reduced part of the problem. The distribution centers provide a central location, which reduces the overall distance that goods need to be transported. It can be noted that Walmarts competitive strategy provides its ability to succeed.

Walmart has continuously reduced prices as part of its competitive strategy (Daniles, Radebaught and Sulivan 364). Walmart relies on low prices to capture a larger market share. The ability to negotiate with suppliers for lower prices is Walmarts competitive strategy. Walmart captured a large market share through acquisitions, which gave it a higher bargaining power over suppliers.

Competitors collaborated to have a similar advantage. However, they are disappointed by Walmarts continuous reduction of product prices. Walmarts success in competitive pricing can be attributed to its strategy to gain a large market share, and collaborate with suppliers. Another American retailer would not have succeeded with a different strategy. Walmarts strategy in reducing costs gave it a competitive advantage.

Comerci and Soriana have combined their purchases to gain a higher bargaining power over suppliers (Daniles, Radebaught and Sulivan 365). Walmarts main strategy is to reduce costs by working closely with suppliers. Comerci and Soriana are forced to combine their purchases because they have lost their market share.

Comerci and Soriana need a continuous improvement strategy to reduce cost. The firms need internal controls to reduce costs continually. If they can continually reduce costs, they will be able to match Walmarts competitiveness.

Walmarts strategy in Mexico and Central America is to focus on cost reduction, and an efficient logistics system. The effectiveness of the logistics system has been used to support suppliers, and the distribution network (Daniles, Radebaught and Sulivan 364). Walmart segmentation makes it easier to target specific demographic groups.

Bilateral agreements have reduced the tariff rates of imports from 49 countries (Daniles, Radebaught and Sulivan 365). Walmart has gained a wider range of option in countries from which it can import goods. NAFTA reduced tariff rates in North America making it easier for the firm to import product from the U.S. into Mexico.

Geographical proximity has an impact on free trade agreements as it can be seen in the NAFTA agreement. It has an impact on the cost of freight. It affects the speed at which goods may be imported. When countries are located close together, goods take less time on board.

Some of the challenges the firm may face as it expands include culture clashes, logistical problems, intense rivalry from local brands, and misunderstanding consumer preferences in different countries. Intense rivalry emerges when competitors copy Walmarts pricing strategy. Misunderstanding consumer demand comes from entering new markets. Logistical problems are attributed to poor infrastructure, and different trends in new markets.

Alternatives

Enter new markets using local brands, and then convert to Walmart after some time (BDC par. 4)

Walmart used the same approach in Mexico (Daniles, Radebaught and Sulivan 363). It can work in markets where people are loyal to local brands. The firm may also use local brands permanently.

Advantages

• The firm can capture a large market share rapidly because it is able to benefit from the local brand.
• It provides time to win local brand loyalists, before changing to Walmart.
• It provides time learn and integrate new cultures.

Disadvantages

• It may build the local brands instead of promoting Walmart as a brand.
• It may be necessary to have separate marketing programs to capture different brands, which may increase marketing costs.

Find markets for products that can be made locally as new products

Eyring, Johnson and Nair (par. 5) suggest that the best way to succeed in the emerging markets is to find unmet needs, and develop products to meet the needs.

The firm can seek to find out why some products are not very successful, and find ways of increasing the attractiveness of the products. Eyring, Johnson and Nair (par. 3) discuss that multinationals fail to succeed in emerging economies because most of them think that reducing costs is the only formula to succeed.

Advantages

• New products in new markets have a potential for rapid growth in revenues.
• Customers in emerging markets have a tendency of trying new products (BDC par. 3).

Disadvantages

• New products may need a lot of marketing to create awareness.
• New products may turn into slow moving stock.
• New products may need importation, which increases cost.

Walmart can succeed by targeting the largest social class in a country

Eyring, Johnson and Nair (par. 5) explain that when a company targets high-income earners in emerging economies, they may not be very successful. The reason is that high-income earners do not form a large part of the population in emerging economies.

Advantages

• Middle-income earners are increasing in emerging markets.
• Revenues rely on the sale of basic commodities, which can get support from middle-income earners.

Disadvantages

• The largest social class may have a low purchasing power, especially in emerging markets.
• The major difference between high-income earners and middle-income earners may be in the purchase of durables. Middle-income earners may purchase less of durable products than high-income earners.

Walmart needs to update its automatic logistics system to recognize products with a high percentage of discounts, which they would not want to be reordered

Advantage

• It will prevent reordering of products that do not maximize profits.

Disadvantages

• It will be costly to regularly update the programmed system to match emerging needs.
• It will need verbal communication between managers of units, executives, and developers of the program.

One of the ways of managing culture diversity is by managing the flow of information

Nataatmadia and Dyson (581) discuss that knowledge sharing can applied down-upwards within an organization to improve multicultural understanding. Nataatmadia and Dyson (582) support written communication as opposed to verbal communication for communities where English is learnt in the classroom rather than from practice.

Advantages

• Written communication creates time for better statements and understanding between members.
• Written communication gives time to non-native English speakers to understand the subject.
• Managers can learn new things about the peoples culture.

Disadvantages

• Written communication may require support software such as intranet or internet.
• It involves additional cost.
• Written communication may reduce openness, which is necessary for sharing knowledge.

The Arkansas executive can allow managers in individual countries to create their own organizational culture provided that they meet the firms objectives

The organization can have only the core parts of its organizational culture standardized.

Advantage

• The subsidiaries can meet the organizations goals without having a culture clash between managers and employees.

Disadvantages

• Walmarts organizational culture may be lost when each subsidiary is identified with a different organization culture.
• It may difficult to transfer the same success Walmart has in the U.S. to other countries if managers cannot adapt to Walmarts organizational culture.

Conclusion

Walmart has the alternative to manage by objectives, and allow subsidiaries to form their own organizational cultures. Sharing knowledge can be used to reduce culture clashes between managers.

Walmart continuously reduces prices, which may prevent competitors from catching up with its low price strategy. Competitive pricing may not always be successful. Exploiting the unmet needs is a formula that may work best in emerging markets.

Recommendations

The firm can enter new markets using local brands. Acquisitions are a good penetration strategy in new markets with strong local brands.

Television advertisement provides a better coverage, but is very expensive. In the U.S., in 2011, it was about $110,000 on average for a 30-second ad (Crupi par. 1). They can be used in the early stages, before the firm reverts to other methods of advertisement. Later, the firm can scrap out advertisement costs, which can be used to lower the cost of products.

Works Cited

BDC. Doing Business in Emerging Markets. 2010. Web.

Crupi, Anthony. In Their Prime: Broadcast Spot Costs Soar. 2011. Web.

Daniles, John, Lee Radebaught and Daniel Sulivan. International Business. 14^th ed. 2011. Upper Saddle River, NJ: Pearson Education. Print.

Eyring, Matthew, Mark Johnson and Hari Nair. New Business Models in Emerging Markets. 2011. Web.

Nataatmadia, Indrawati and Laurel Dyson. Managing the Modern Workforce: Cultural Diversity and Its Implications. Proceedings of the 2005 Information Resources Management Association International Conference. San Diego. (2005): 580-584. IRMA. Web.