Wal-Mart
Current Situation Analysis
Mission and Strategic Objectives
Wal – Mart Corporation’s mission statement can be identified as follows:
Sam Walton built Wal-Mart on the revolutionary philosophies of excellence in the workplace, customer service and always having the lowest prices. We have always stayed true to the Three Basic Beliefs Mr. Sam established in 1962:
1. Respect for the Individual
2. Service to Our Customers
3. Strive for Excellence
Wal-Mart is the world’s largest retailer, operating more than 5800 discount stores. Wal-Mart employs more than 1.5 million associates 885,000 in the United States and 225,000 internationally. Walton had a reputation for caring about his customers, his employees, and the community. In order to maintain its market position in the discount retail business, Wal-Mart executives continue to adhere to the management guidelines Sam developed. Walton was a man of simple tastes and took a keen interest in people. He believed in three guiding principles: 1.Customer value and service; 2.Partnership with its associates; 3.Community involvement.
Strategy
Wal-Mart succeeds in the United States simply by selling branded products at low cost. But that doesn't explain it all. Following is an analysis of Wal-Mart's competitive strategy.
Pricing
Wal-Mart's marketing strategy was to guarantee "everyday low prices" as a way to attract customers. The traditional discount retailer, which relies on "sales," not only has to do more advertising and promotions but also has to rely more on catalog mailing, buildup of inventory before a sale, markdowns on the unsold inventory, etc. Wal-Mart stores operate according to their "Everyday Low Price" philosophy. Wal-Mart has emerged as the industry leader because it has been better at containing its costs, which has allowed it to pass on the savings to its customers. Wal-Mart has become a capability competitor. With such low wages for those who make the Bratz dolls, Wal-Mart can profit greatly while still providing low prices to its customers. In a global labor market, it is the companies who can find the cheapest, most exploitable conditions, with little worker protection or regulations that will profit the greatest.
Distribution System
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...zil where they only have Sam’s Clubs and Super centers.
Recommendations as it relates to its associates
• Wal-Mart has to allow workers to file an accident report.
• Wal-Mart needs to recognize injured worker’s right to time-loss compensation.
• Wal-Mart has to increase its wages.
• Wal-Mart has to stop its violation of labor law, including intimidation, coercion, harassment and illegal discharges
Wal-Mart needs to stop cutting wages and benefits
Recommendations as it relates to its customers
• Walt-Mart’s customer service is strength to the company. Therefore, they should try to improve it on an ongoing basis. This would create customer’s loyalty and attract even more customers to buy on their stores.
• Since customers enjoy low prices, and value and effective and friendly customer service. Wal-Mart should offer training and programs to its employees such as the “Putting People First”(British Airways) in order to reinforce and improve their effective customer service.
There is a lot that goes into being a successful company, and making the Fortune 500 list is most every business owner’s dream. Sam Walton is credited with being the founder and first Chief Executive Officer (CEO) of Wal-Mart. Walton and other CEO’s of the company were able to shape the success of Wal-Mart by implementing strategies that would revolutionize the way retail stores do business, all while pushing Wal-Mart to the top spot on the Fortune 500 list. This paper looks at a few different strategies Walton implemented that ultimately benefitted the company to increase revenue. How did Wal-Mart become the retail giant that it is today? T.A. Frank of Washington Monthly gives a brief history of Wal-Mart in his article Everyday Low Vices.
He was also considered charismatic. He communicated directly with his employees (associates) and he expected customers to be treated as guests when they entered his store. “Mr. Walton always worked hard at shaping his work force, using cheers, rap songs and payment policies to urge employees to be frugal in their jobs and friendly toward customers. Bonuses were paid to all employees in stores where stealing and other inventory losses were kept below 2 percent of sales. Scholarships were established at colleges in names of employees who crafted better ways to handle merchandise.” (nytimes.com, 1992). Today this is not the case. Since the death of Sam Walton in 1992, the company’s reputation has been on a continual downslide. Wal-mart is no longer an ethical company; it has negatively impacted the communities in which it exists. It mistreats its employees and is negatively impacting the nation’s over-all economy. Ethical business practices are not the way of life for today’s Wal-mart.
Wal-Mart has to implement a number of changes to correct the problems it has created. Attention must be paid to ensure the employee is treated fairly. Other ways must be sought to maintain profit levels and make the stockholders happy.
Wal-Mart, a "Big-Box Retailer" employs more than 2.1 million associates worldwide and has two-thousand seven-hundred stores in the United States with many more in Argentina, Brazil, Canada, Central America, Chile, China, Germany, Japan, Korea, India, Mexico, Puerto Rico, and the United Kingdom, making Wal-Mart the largest retailer in the world. "Wal-Mart accounts for upward of 30 percent of U.S. sales, and plans to more than double its sales within the next five years" (Lynn 29-36). Why is Wal-Mart so successful, and is Wal-Mart actually bad for America?
Since 1962 and the beginning of the discount retailer market Wal-Mart has been ahead of the retail game. By 1967 there were 24 Wal-Marts that had grossed 12.6 million dollars. In just 7 years Wal-mart had spread into 9 states. By 1979 Wal-Mart was the fastest store to reach a billion dollars in sales. In 2005 Wal-Mart has 3,800 domestic stores along with 3,800 stores internationally, and had made over 312 billion dollars. As you can see the Wal-Mart empire has grown monumentally. To move into this segment of the market would be tough.
Sam Walton, a graduate fro University of Missouri in 1940, is the founder of Wal-Mart. Sam franchised his first retail store as a Ben Franklin affiliated store in Newport, Arkansas after he returned from World War II. As an ambitious businessOrganizational structure may be defined as the system of relations that subsist among a variety of positions and position holders. Formal structure is a blueprint of relations that has been knowingly deliberated and put into action. It includes a formal chain of command of power as well as policies and procedures and other premeditated attempts to control conduct.
With Wal-Mart being so outrageously huge in this short of time, I believe that it has not yet settled into their customers why Wal-Mart is so cheap. Wal-Mart will replace higher wage jobs with lower wage jobs and require taxpayer assistance to keep Wal-Mart employees out of poverty. Numerous studies reveal that, contrary to the company's PR, Wal-Mart does not create new jobs when it comes to town. Wal-Mart simply replaces higher paying retail jobs with lower paying ones and, due to its adverse impact upon local businesses, may actually cause a net decrease in job numbers. The factories in China supply their employees with a whopping three dollar...
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
Wal-Mart as we know it today evolved from Sam Walton’s goals for great value and great customer service. Mr. Walton’s competitors thought his idea that a successful business could be built around offering lower prices and great service would never work. Mr. Walton also credited the rapid growth of Wal-Mart not just to the low costs that attracted his customers, but also to his associates. He relied on them to give customers the great shopping experience that would keep them coming back. Sam shared his vision for the company with associates in a way that was nearly unheard of in the industry. He made them partners in the success of the company, and firmly believed that this partnership was what made Walmart great.
The most significant component of Wal-Mart’s success was the way it treated its employees or as they are known as in Wal-Mart “associates”, the beliefs or rules of the Wal-Mart culture makes associates want to provide excellent service to its customers. During visits Walton encouraged associates to pledge to greet customers and ask if they assist them or walking into a Wal-Mart store customers are met by a greeter, an associate who welcomed them and handed out shopping carts (Farhoomand, 2006).
The benefits or competitive advantage Wal-Mart derived over the years from its supply chain management practices is also covered. The reason Wal-Mart is ahead of their competition is because they invest in technology in the 1980s. This investment paid off in the long run. Wal-Mart invested heavily in IT and communication systems to effectively track sales and merchandise inventories in stores across the country. They have set up own satellite communication in 1983. Employees at the stores have the ‘Magic Wand’ at hand. These barcode scanners allow you to check the prices of items at that particular store by scanned the barcode on the product. This is especially helpful when there is clearance that isn 't always marked and sometimes clearance items are cheaper than they
Sam Walton's guiding philosophy for his stores from the beginning was to offer consumers a wide selection of goods at a discounted price. The company saved money by keeping advertising costs low...
Wal-mart has a reputation for caring for its customers, of course their employees, and for the prospective public. So Wal-Mart can be an industrial leader for the world of shoppers with an eye for lower affordable prices, company decision makers would continue it's systematic strategies that it's founder and president established years ago. Sam Walton believed in three guiding principles in his strategy planning they were to provide the customer with good value and service, to have a good relationship with its associates, and to be involved with the community.
Our first responsibility is to provide all consumers the best products and services with guaranteed satisfaction under one roof. Wal-Mart provides a wide array of products and services at reasonable prices.
Amongst Wal-Mart’s competitors are Kmart and Target; general merchandising, Bed, Bath, and Beyond; retail merchandising, and Costco; warehouse clubs. Wal-Mart also competes against major supermarket retailers like Safeway, Albertson’s and Kroger. These companies find it very dif...