Case Study: Analysis of WALMART from a strategic point of view
Introduction to the organization
Wal-Mart is the largest retail chain all around the world that provide the customers all sorts of products they need to use on daily basis. The name of the current CEO of the organization is C. Douglas McMillon who took the post with an aim to carrying serving a huge market with quality. It is based in Bentonville, Arizona. From eatables to any of the grocery products, the store has everything for its customers. They are satisfied with the performance of the business as they know they will be able to have everything at one stop. It is the part of their daily routine to visit the store and to get the products they use on daily basis. The level of satisfaction of the people has brought forth the loyalty among their minds. The company earned approximately 486 billion dollars in the financial year 2015.
This is a huge sum of money that has ranked the organization at the top of the Forbes 500 biggest organizations in the world. The revenue of the company chiefly comes from the grocery products, and its share in the whole of the profit is about 55 percent. it has more than 4,000 stores all around America. The management of Wal-Mart is planning to extend its business towards other markets as well. The company also enjoys the status of the quality-oriented organization in the whole of the world. Till this time there is no organization in the world that matched its level in any way. With more than 22 million employees, the organization is providing services and products to millions of customers.
One of the reasons for its success is the quality-orientation that helps the organization in achieving its goals. The suppliers provide the organization the fresh products that are further used for increasing the financial strength of the business. It has proper system of ensuring the safety of the eatables so that they could be preserved for a longer period of time without getting staled. It has been serving to the people from the past 21 years. In the recent years the organization is focusing to serve its customers online. It has decided to make full use of the internet.
Research and Analysis
The organization is having a broad spectrum of activities to be performed on daily basis. It not only has to deal with the new and the old customers, but also the new and old competitors as well. It is necessary to get acquainted with the internal and the external environments of the organization. There are certain competencies as well that make it one of the best in the whole world. All this and the competitive approaches of the organization have been elaborated as follow.
- Review of internal and external environments
The management of the Wal-Mart gives the due consideration to its internal and the external environment as it knows its success depends largely on both of them. In the internal environment, there are a number of factors like the employees, culture and the beliefs, rules and the regulations, production processes, and others are some of the factors that are always given consideration to ensure their harmony with the objectives of the organization. If they are in harmony with the goal, there will be a huge benefit to the organization, but if they are not, there will be just loss, financial as well as non-financial.
On the other side there are external environment, which includes the customers, culture and demographic features of the customers, suppliers, government rules and regulations and the likewise forces that are in most of the times under no one’s thumbs except the ones they are related too. Mostly the internal environment is controllable, while the external is not. Let’s just talk about the internal environment and the forces in it.
Wal-Mart is having a clear set of rules and regulations that guides its management for gaining an in-depth understanding of the environment. Every person in the organization knows what to do and what not to. These rules and regulation promote the quality in every process the business is involved in. in fact, these are the rules and the regulations that determine what the employees are to do and what they should abandon doing so. The employees follow a clear guideline of serving the customers in the best way possible. The employees are provided with the training for serving the customers. They are quick in giving their services and always give their full productivity.
On the other side in the external environment, the business takes the assistance of the suppliers for the provision of the qualitative products. They have been bluntly asked for providing the products liked by the people. Wal-Mart has a wide range of products that are enough to serve the customers in a best way. The management always focused over the sustainable growth and this it did with the provision of the qualitative products and the services. It pays billions of dollars as tax so it is evident that it never concealed any amount of its reveal to dupe the government. It will be justified to say that the organization is having control over the external environment as well but in a limited way.
Discussion of competencies
The corporation is having a number of competencies that make it the largest retail chain all around the world. The very first competency that it is having is the capital. With this, it has decided to have a large range of products so that the customers could not turn away empty-handed every time he visits it. The management tries to save the money in its processes so that they could be used in other processes. The culture is also another one that is friendly for the employees and supportive for the customers. The employees have been taught to talk politely with the customers and to help them getting what they want. Helping the customers for reaching to the products and lowering the time at the billing queue are also covered in the concept of the quality for the business.
Employees go with all the satisfaction and the products they need. They come back to the organization whenever they want to buy any product. And not only this, but also they have taken the others to shop from the store. The management of more than 4,000 stores all around the country is also the competency of the organization. Managing them is a big task, but the upper level management always gets in touch with the lower one to deliver every product to its customers, anywhere and anytime. The process of distribution is very swift as the company is managing more than 146 distribution centers all around the world.
- Analysis of Competitive approaches
Being the largest retail organization in the world, Wal-Mart is having a number of competitors in the industry. These competitors are not like it in many respects and that is why they are unable to compete with it. One of the approaches that the business has adopted is to best serve the people in the markets where it is having its structure. The quality is the first and the foremost priority that the organization takes into consideration. It first focuses over its already built stores and then ponders over expanding its business. Furthermore, it tries its best for lowering its cost so that the customers could get things at the cheapest rates.
In various countries of the world, it is striving to be productive and useful for its customers. It is useful in the sense that they could gain products in lesser amount of money, and without loosening their quality. After the fierce competition outside of America, the company decided to abandon those markets. It could establish its goodwill in Germany and Korea, which it managed and get out these markets without having anything on stake. Targets, The Real Canadian Superstore, Kmart are some its national and international competitors, which it is dealing with its core competencies.
The business needs to pursue its goals and should consider them its priorities. Wal-Mart, after realizing the need of the time, should follow certain guidelines. Although it is having multiple tasks to be done, it needs to give focus to the priorities. The very first recommendation to the company is to make it ensure to strengthen its national market rather going for the expansion in other countries. The failure in the Germany and Korea has made it evident for the organization to go for the local market first. The management should avoid introducing the business into the markets that are already filled with the competitors. It should go for the developing countries like Pakistan, Turkey, India, and other countries from Asia and Africa. These are emerging markets and will be useful for Wal-Mart.
Keeping an eye on the competitors, national and the international is of crucial significance. The management of the organization is unable to provide its due attention to them. Undoubtedly, it is having a huge set of operations; it really needs to ponder over the policies of the other businesses in the same market. The competitors are gaining strengths so it is better to have a separate system that could handle the issues and provide information about competitors.
People need more convenience in buying the products. They do not want to visit the organization for having their products bought. The corporation can gain a lot of benefits if it starts operating online too just like it is operating offline. The company should introduce the delivery system so that the customers could get their products at their doorstep. They do not want to visit to store sometimes and prefer to stay at home. This facility will generate loyalty among the people. They would prefer shopping online.
Strategy discussion (Discussion of how the recommended strategies will impact the organization)
Though the factor of expansion is crucial for the business, but it must be done after taking into account the external environment. The culture of another country will not necessarily be like America. There is a dire need to have attention over the international markets, and the one that best suits the business should then be explored. Otherwise there will be failure that might affect the profitability of the organization. The affects of globalization should be analyzed in dept so that the matters related to the expansion could be clarified. The business cannot invest in any of the country. It requires an in-depth non-financial assistance to become aware of each and every factor of the market.
The business with this much huge operations cannot be set aside and it cannot avoid exploring the international markets, but this should be done with the assistance of the local experts, who can provide information to the business to become successful. The competitors are everywhere no matter it is the national or the international market. The only need is to tackle them. The management of Wal-Mart seems to be focusing only over its own operations ignoring what the competitors are doing. Having focus on them will strengthen the strategic position of the organization in the times to come.
The business should make a thorough analysis of them so that their operations could be known and the products they are selling could become on scene. This will positively benefit the organization in the financial as well as in the non-financial arena. In this way it would be able to have information about its competitors. On the other side, by changing the selling procedures, the organization will be able to attract more and more customers. Furthermore the already loyal customers will become more loyal as their shopping store has added value to its service operations. It will make them comfortable at the time of buying the products online. In this time of technology, customers need contentment and coziness.
Summary and final conclusions
Wal-Mart is still the leading retail stores in America. It has gained this status due to its operations and the availability of the services that it provides to its customers. It is at the first position in Forbes list of 500 largest organizations of the world. The basic reason that attracts the customers towards it is the quality. This factor is found in every process the company is involved in. The organization accurately has understood the meaning of quality, and this is why the customers never go dissatisfied. They always get what they want to buy from the stores of the organization. Though it is the leading organizations, it does not mean that it would be the same forever. There would be changes in the times to come and there are changes at the contemporary times that are turning the world into a global village. At this time the organization needs to keep the bonds of loyalty strengthened so that it could hold the same position. For this the organization needs to take the assistance of the internet as it has the potential to new markets.