Wal-Mart Inc. Business Report
Wal-Mart Inc. formerly known as Wal-Mart Stores Inc. is an American multinational retail corporation that is made up of hypermarkets, discount department stores, and grocery stores (Roberts & Berg, 2012). It started as a discount store whose main idea was to sell more for less and now it has grown to one of the largest retailer stores in the world. It is estimated that over two hundred million people visit the various stores weekly. It is one of the largest employing company with over two million associates over twenty-seven countries. Wal-Mart has in the future been a leader in sustainability and creating job opportunities while bringing value to the communities around the world.
From the onset of the development of Wal-Mart, it has developed its business with an outstanding financial strategy enabling it to be among the top position in the industry. Its corporate mission statement is “to save people’s money so they can live better.” The best strategy they have used is to use the price list as a way to attract customers (Roberts & Berg, 2012). Wal-Mart’s goals over the next three years include; being the first retail store to deliver seamless shopping experience at a scale and making it easy and fast to shop. The growth target for the next three years is to add approximately forty-five to sixty billion dollars on new sales.
For the success of any business, it is important to consider stakeholders well and the role they play. The role of stakeholders in any business is to give the business a direction. For instance, Wal-Mart stakeholders deploy pressure on the company’s business towards the direction of their interest. The main stakeholders that Wal-Mart considers and give priority to our investors, customer, employees, and suppliers respectively. The topmost priority stakeholders are investors who are more interested in the profits made. This is because of the more the profit, the more the dividend they get from the shares they have. The second priority is accorded to customers who consider the affordability of commodities as well as the quality. The third priority goes to employees who assist the leadership to make the right decisions. Finally, suppliers are accorded the least priority since their main aim is to sell as many products as they can for more profits.
The organizational structure of Wal-Mart is very hierarchical because of its big size. In order to be able to effectively manage the number of employs the company has, the structure is well defined. There are sixteen members of the board of directors and a team of twenty-nine senior managers who make up the executive team. Wal-Mart is led by the president and the CEO named Doug McMillon. There are four more CEO’s who serve under him; Wal-Mart US, Wal-Mart International, Sam’s Club, and Global eCommerce and technology respectively.
In every successful business, there are some challenges they face and Wal-Mart is not an exemption. In this day and era where one can do shopping from the comfort of your home with only a few clicks of your computer or tablet, it can be hard for a retail store to compete with technology. Another major challenge Wal-Mart faces is due to the economic recovery that has made more stores to reduce their prices. Lower prices can cause damage to the sales and margins of the profit they make.
It’s important for Wal-Mart to embrace fundamental change so they can be able to achieve the goals they have set as well as meet its mission statement (Spector, 2007). Also, fundamental change is necessary for Wal-Mart if they want to remain operational and viable in the business. With all-round competition, it can be impossible to conquer the competition. The company needs to find innovative ways to develop their products. Also, they should find the best way to market their product as they create a brand that is more acceptable to their consumers. A solid strategic plan is required to handle all the possible scenarios of competition. Fundamental change is necessary because it can provide participation in a networked market that allows a corporation to be more informed and organized.
SWOT analysis can be defined as a method that is used to understand a company’s strengths and weaknesses. It is also used to identify the opportunities open for your company as well as any threats (Sarsby, 2016). A company is able to eliminate and manage any threats and also get the best ways they can exploit a market. Some of the strengths associated with Wal-Mart include; it is a brand that is recognized globally. It is the largest company by its revenue and retailer store with a huge number of customers. Also, it has become an international retailer store with operations in more than twenty-five countries outside the U.S.A. Due to the international status; the scale of operations afforded can make it achieve better economies scale which makes it hard to beat their low prices on commodities. Wal-Mart has been admired for its technological advancements that are used to track orders, inventory, relationship management and sales which are tracked in real time. This ensures that they are always stocked out to minimize losses. There are some weaknesses that have been associated with Wal-Mart over the years. For instance, they have been sued severally because of how they treat their employees. Some of the complaints include discrimination, unequal wages, unfair promotions, unpaid wages, and poor working environment among others (Sarsby, 2016). These are some of the reasons that have tarnished the brand name. Also, the company has had a negative image of the company because it has a high employee turnover rate and lack of motivation for their employees. Some of the products sold in the stores do not have good quality. Wal-Mart can take up some opportunities such as offering western goods to countries that are developing and they are growing economically while offering value for money. Additionally, they can improve their format in their stores and offer new and improved formats. Another opportunity they can take advantage of their private label which they can use as bargaining power in with national brands. Wal-Mart has the chance of introducing healthy products to support the trends of healthier eating. They should also consider having an expanding online store. Wal-Mart is facing new threats from competition from other global retailers such as Amazon and Carrefour. They also face some social threats in places where they are not acceptable because they hurt the small business owners forcing them to shut down because they cannot compete with lower prices on commodities. In addition, product prices are constantly rising due to the high cost of manufacturing making the profit margin quite low.
My strategy to address the SWOT analysis on Wal-Mart would be to prioritize the strengths and use them to utilize the global retail market. Another improvement they can use is the HR management standard and ensure that the quality of any products in high to improve the performance. Another strategy would be to expand globally in foreign markets with the help of their brand name, global supply chain and their high efficiency of the supply chain. This strategy is beneficial for it will give Wal-Mart a chance to make an assessment of the likelihood of such events happening in the future and how much impact it will make. It will also give the managers a chance to focus on the most critical issues and ensuring that issues are well solved.
Key stakeholders need to prepare Wal-Mart for change implementation. They can be able to do this by creating a sense of urgency. They can be able to do this by making other team members want the change too. The next step would be to build a guiding team that will carry out the change. This team should be made up of team members who support the change and they should be lead by the stakeholders. The most important step is to form a strategic vision and achievable initiatives. In order for change to take place, it’s important to have a clear vision for everyone to know what they are expected from them. For the implementation of change to take place, there are several resources that should be available such as product or business roadmaps (Spector, 2007). This will ease the process of knowing what to do when to do it and how to do it. Another important tool that can be used is having training tutorials and education sessions to ensure that everyone involved is conversant with the processes. Also, there should be stakeholders’ feedback forums where they will pass any relevant information that can be helpful in change implementation. After every step of the change implementation, it is important to have a post mortem review on the successes and failures of the steps and agreed ways of how to solve any upcoming challenges. There is no specified time that one can be able to achieve during the implementation steps, what is important is to ensure that once you have all the steps ready, implementing them is gradual.
Any success in change management can be measured by some metrics that ensure you are on the positive side of the equation and it can be perceived by stakeholders, customers and the standards that the company has set. One of the metrics used is customer satisfaction which can be seen from the conversion rates. Another metric would be employee satisfaction. Sustaining change can be important for Wal-Mart Inc. this can be done by ensuring that the management fully understands the nature of the resistance, create opportunities for small but meaningful change and provide support for the change process. It is also important to be flexible and patient. There are some challenges that negatively hinder the implementation of change. Lack of consensus from everyone can be an issue. Failing to communicate directly to all employees can also be a challenge for implementing change. Finally, you can face resistance from employees who are comfortable with how thing have been running previously. These issues can be addressed by having all managerial level on board from the beginning, involving all the employees as much as possible and supporting the employees through training to assist into successful transitioning respectively.
One of the most important requirements for Wal-Mart is to develop a communication plan for their stakeholders in order to maintain good relations. The first step is to ensure that you have the right target audience and deciding the content of the message that you intend to send. You also need to choose the right communication tool and develop an implementation timeline for the communication plan.
Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2008). Strategic management: Competitiveness and globalization. Mason, Ohio: South-Western.
Roberts, B. R., & Berg, N. (2012). Walmart: Key insights and practical lessons from the world’s largest retailer. London: Kogan Page.
Sarsby, A. (2016). SWOT analysis.
Spector, B. (2007). Implementing organizational change: Theory and practice. Upper Saddle River, N.J: Pearson Prentice Hall.
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