Strategic Analysis on management of Walmart
Strategic Analysis on Management of W al-Mart
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Table of Content
1.0 Introduction..........................................................................错误！未定义书签。
2.0 Introduction and Business Policy of W al-Mart.................错误！未定义书签。
2.1 Brief Introduction on W al-Mart...................................错误！未定义书签。
2.2 Business Policy of W al-Mart ............................................ 错误！未定义书签。
3.0 Strategic Management Analysis on W al-Mart...................错误！未定义书签。
3.1 Introduction of the Strategic Management of W al-Mart错误！未定义书签。
3.2 Strategy Evaluation........................................................... 错误！未定义书签。
4.0 Suggestion and Advice about the Management.................错误！未定义书签。
5.0 Conclusion ............................................................................错误！未定义书签。
Reference.....................................................................................错误！未定义书签。
1.0Introduction
Strategic management is considered as the main way to enhance the performance of the firms by utilizing the resources and give the direction of the development. It can help the firms achieve the objectives by developing the business polices and plans. Some famous companies such as Dell, DHL, Microsoft, and Carrefour all have a successful strategic management can make sure that they can achieve a good development in the business. Therefore, study and analysis on the strategic management are quite meaningful in the business operation. The report will make an analysis on the strategic management of famous Wal-Mart through the introduction of Wal-Mart and its business plan, polices and other aspects because the importance of business policy and strategy has surged to the forefront of the business world. Internationalization of business, deregulation, mergers, acquisitions, strategic alliances, and international joint ventures - coupled with a new emphasis on shareholder value - contribute to a feeling of uncertainty in the global marketplace. On top of this, the constantly changing e-commerce environment makes strategic planning even more essential. Students need to know how to function in this business environment. (Harold C. Bason, 2000) Meanwhile, the report gives out some suggestions about the management.
2.0Introduction and Business Policy of W al-Mart
2.1Brief Introduction on W al-Mart
Wal-Mart is established Arkansas in 1,962 and the largest private retailer in the world. It has become the famous brand known by almost all the people from the world. Its business scope includes supermarkets, clubs and neighbourhood markets etc. They follow the three core values of respect for the individual, service to the customer, and striving for excellence, and stick to the Wal-Mart tradition of building our business one store and one customer at a time, so as to fulfil our core mission — save people money, so they can live better, and continue to make a difference in the lives of our
customers, members and associates. Today, with over 2.1 million associates worldwide, Wal-Mart operates more than 8,400 units in 15 countries under 55 different banners, and serves more than 200 million customers per week. Wal-Mart had $405 billion in annual sales in fiscal year 2010 (Wal-Mart Global Information Websites, 2011) It is quite easy see that the Wal-Mart’s goal is to become a globalization organisation. However, we all know that this very time is meeting the third economic crisis all over the world. For example, inflation results in the cost increase even lack in the stock. In the former days, there increase the price increased of some brands of instant noodle and mineral water. In addition, there exist too many powerful competitors such as Carrefour and more and more local retailers which bring great challenge to the business and the management of Wal-Mart. Meanwhile, Wal-Mart is facing more and more different investment situation. How the Wal-Mart can be the most popular retailer in the foreign country is also a difficult problem facing the different government policy and different customers.This is the very internal and external situation of the Wal-Mart market. Of course, there is specific business policy in Wal-Mart to run the firm to face these situations.
2.2Business Policy of W al-Mart
Business policy means the guiding procedure, philosophy or course of action for an enterprise or company organized for commercial purposes (RHW, 2010) Business policy is the direction of the firms and it matters a lot. It plays important role in the decision of manager. It must be understood by all the working stuff of the firm. It involves rules, regulations and objectives. Regarding the Wal-Mart, it goes without saying that the low price and best service given to the customer everyday are the guiding policy or the basic business management philosophy seen from its mission of saving people money. As the customer, we can easily find the price is low almo st everyday. It is full of customers because of the attractive prices. There are always discount products because the low cost stock channel and ways. In order to keep the promise of low price, the Wal-Mart performs the large amount cargo purchase and large sales every day. Large amount of purchasing can make Wal-Mart get the
discount or lower price form the manufacture. Meanwhile, it advocates that the purchaser stuff should make great barging from the manufacture to guarantee the cargoes the lowest. Therefore, the items in Wal-Mart can be sold at a more competitive price so that they can get a large amount of consumers. In addition, it adopt the strict cost control in the other aspect. For example, it rarely makes advertisements and promotions to save the cost. Meanwhile, they have a wide steady supply channel. Regarding the same product, they establish business relationship with different brands manufactures to avoid the shortage in supply. Secondly, besides the low price, the best service is the important business policy. When we enter the Wal-Mart, we can find a huge poster about the service ‘Customer is always right’ and the customer is the real boss!" etc. Sam Walton said many times that customer service distinguishes our Company from all others. In his words, "Give customers what they want - and a little more. Let them know you appreciate them. Make good on all your mistakes, and don't make excuses, apologize. Stand behind everything you do. The two most important words I ever wrote were on the first Wal-Mart sign - 'Satisfaction Guaranteed'."(Wal-Mart Global Information Websites, 2011) This is the demand to the work stuff in the Wal-Mart. Almost all the working stuff can fully recognize that only good service can make the customers consumer in Wal-Mart instead of the other places. In fact, it is just because of the friendly guidance of working stuff, smiling, timely responds and aggressive hospitality of the working stuff, more and more customer can get satisfied with the expectation in the heart because the customer who came to Wal-Mart can enjoy the VIP feeling.
3.0Strategic Management Analysis on W al-Mart
3.1 Introduction of the Strategic Management of W al-Mart
Strategic management refers to the art of planning your business at the highest possible level. It is the duty of the company’s leader (or leaders). Strategic management focuses on building a solid underlying structure to your business that will subsequently be fleshed out through the combined efforts of every individual you employ. (All Business, 1999-2011) It is obvious that the objective of the Wal-Mart is
realization of globalisation. It will establish the global sales network even become the best and biggest retailer all over the world. Let us analyse what ways make them realize the goals. The first and the most import way are the low cost supply and best service mentioned above. It is also the principle and business policy of the Wal-Mart. Meanwhile, it is the core mission. The purchasing stuff should make good barging or get the biggest discount from the direct manufacture. The company establish the cognition of the working stuff that you are barging the price from the manufacture just equals the barging from the customer. It is the responsibility to save each cent for the customers. It saves impossible cost from every aspect such as control the cost on advertisement, big packing instead of small packing and the logistic system. Meanwhile, regarding the service, there is quite strict demand on the working stuff. For example, the stuff should face the customer with smile at every time and everywhere. Even the smile should be ruled with ‘3-meter’way. The call from customers should be answer fast and politely. All the service should meet the expectation of the customer even exceed the expectation. Customer can enjoy the fast, convenient VIP service. Secondly, high efficient logical and inventory management plays important role in the development of Wal-Mart. There are 16 shipping centres and more than 6000 goods wagon which guarantee the fast and timely shipping. They are assigned reasonably so that the cargo can be delivered in day time. In addition, the logistical management of the Wal-Mart is flexible. They adopt the direct delivery from the end supplier to the shop to save the transportation fee and the time. In the stock is guaranteed in each shop. If the stock is decreased to some extent, the cargo will be quickly supplemented by the fast logical management. The transportation tools such as big trucks, transmission band, warehouse and other effective equipments contribute a lot. Thirdly, the technology network is widely used in every field. Shipping centre, inventory, warehouse even the vending machine also be with the computer system. The system fastens the speed of the supply and the service for the customers. Wal-Mart turned to technology in the early 1980s, first for collecting and analyzing sales data and then for transmitting orders to suppliers with electronic data interchanges (EDI). By the 1990s, Wal-Mart was collaborating electronically with
thousands of its suppliers, using EDI initially and then developing its own applications, collectively known as Retail Linka. Suppliers used modems to dial into the Wal-Mart database for up-to-date, store-by-store information on sales and inventory for their products. (Cisco, 2011) The technology network matters a lot for the service of the customers by fast and low cost way. It optimizes the logistic and supply chain of the Wal-Mart. Fourthly, to the different customers from different countries and different social position, the Wal-Mart localization management and service. To the customers in the different countries, the Wal-Mart pays attention to coordinate according to the local government policy to fit the development in the foreign country. For example, like the Wal-Mart in China, from the newspaper, we always learned that the Wal-Mart opens a lot of programs with the local farmers or the other co-operators. Meanwhile, they always take part in some public welfare activities. It ever donates a lot to the construction after Sichuan earth quake. All the act makes it fit the local market and establish good image in the heart of the citizens. In addition, to the different customers from different positions, the Wal-Mart has the supermarket for the choice of the low standard consumers. For the higher standard consumers, they have the club to welcome the customers.
3.2 Strategy Evaluation
The strategy evaluation can measure the effectiveness of the firm’s strategy by the SWOT analysis. It normally uses to examine the plan before the strategy management performed. Here, le t’s see whether the strategic management of the Wal-Mart is successful or not. Regarding suitability, the strategy of the Wal-Mart brings the economic profits. Because of the low cost and best services, the Wal-Mart becomes one of the best retailers in the world. Meanwhile, when it comes into the new countries, the local consumers are attracted because of the famous brand and the fame established for a long time. The good management of the logistic, inventory and technology network keep it in the leading position of the retail industry. It obviously suit the development of the Wal-Mart. Regarding the feasibility, we can see that all the
management of the Wal-Mart have been mature. It is possible realize the global retailer because of its superior service, supply chain and business policy etc. In addition, because of the localization management, it is suitable in terms of environment and capabilities. All the sales activities cooperate with the local government and suppliers. They can realize the mutual development. Regarding the feasibility, funding, time, people and information all prepared after the history business. To the people, because of the localization factor, the Wal-Mart employ a lot of stuff form the local people. In one hand, it can save the cost on the human recourses. On the other hand, the Wal-Mart supplies the job opportunities of the local to enhance the integrating. About the acceptability, it goes without saying that, by the management, Wal-Mart can gain the support from the customers, employees. To the stakeholders, because of the famous brands, a lot of companies are looking forward to cooperate with Wal-Mart. In the aspect of SWOT analysis, SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis. It is applicable to either the corporate level or the business unit level and frequently appears in marketing plans. SWOT (sometimes referred to as TOWS) stands for Strengths, Weaknesses, Opportunities, and Threats. The SWOT framework was described in the late 1960's by Edmund P. Learned, C. Roland Christiansen, Kenneth Andrews, and William D. Guth in Business Policy, Text and Cases (Homewood, IL: Irwin, 1969). About the strengths, it is a famous and powerful retail brand with long history. It has recent expansion and a core competence involving use of information technology to support its logistics systems. The good human resource management and development is powerful. Human is the key to the business and it focus on the training of the employee. Regarding the weakness, although it is global, there are only branches in the few countries. Regarding the opportunities, there are possibilities for the Wal-Mart to expand its markets in large consumer markets such as China and India. New types and locations can be established differ from the large super centres. Regarding the threats, it faces the fierce competition from the local and global markets. It also meets the political problems in the foreign countries as a multinational organisation etc. (Marketing Teacher Ltd, 2000 –2011) SWOT analysis is a basic,
straightforward model that provides direction and serves as a basis for the development of marketing plans. It accomplishes this by assessing an organizations strengths (what an organization can do) and weaknesses (what an organization cannot do) in addition to opportunities (potential favourable conditions for an organization) and threats (potential unfavourable conditions for an organization). SWOT analysis is an important step in planning and its value is often underestimated despite the simplicity in creation. The role of SWOT analysis is to take the information from the environmental analysis and separate it into internal issues (strengths and weaknesses) and external issues (opportunities and threats). Once this is completed, SWOT analysis determines if the information indicates something that will assist the firm in accomplishing its objectives (a strength or opportunity), or if it indicates an obstacle that must be overcome or minimized to achieve desired results (weakness or threat) (Marketing Strategy, 1998). Therefore, through the SWOT, we can assess the strategic management of Wal-Mart is almost successful and feasible.
4.0Suggestion and Advice about the Management
Although we can see the strategic management of Wal-Mart is sure to be successful, there is still aspects which need to be improved. The service is known to all that it is quite good and convenient. However, the Wal-Mart should pay more attention to the management and monitor. In larger portion, the working stuff can serve the customers according to the principal. But with the development and the expansion of the Wal-Mart, some training on the service on the stuff is not enough. The local working stuff’s service is still far behind the ones of homeland. Wal-Mart should impose more efforts to make sure the working stuff is supplying the best service to the customers. In addition, some rewards and punishments regulations can be established to encourage the working stuff.
As the Wal-Mart is global organisation, it is not local. So the localization is not so deep. There are still the problems and difficulties for the Wal-Mart enter to the foreign countries because of different nation situation. For example, before 2002, there is only
8 shops which is successfully open, but the Carrefour has established 15 shops in China. The Wal-Mart should realize the technology standard is different in different countries. The high technology use sometimes can not fit the development in the lower technology country. So the good effect may not be got in the foreign country. In addition, regarding the low price principle, it is not always feasible in all the countries. It may face the union resist of the other retailers in the local countries. In addition, Wal-Mart should learn more about the local custom to meet the needs more deeply. KFC just make a good example, it make some Chinese food to cater the taste of the Chinese people. Wal-Mart can sell the goods and purchase the goods according to the needs according to the local custom and the seasons. Therefore, Wal-Mart should make careful investigation about the investment countries and get deeper in the localization.
The network of the shops is not widely. As the big brand retailers, it always chooses the noisy downtown or the high density population place to locate. Some customers have to take long journey to find the shop though Wal-Mart can supply the free cargo delivery. Even some customers will choose some little convenient store to purchase the needs. It is not convenient for the customer to consume. Some customers like to fetch the goods needed just after 3-5 minutes walk. Some people hates the long time during the crowd of people on the bus. Therefore, Wal-Mart can try to established smaller shop to locate in small places such as the community or residential district to bring more convenience. Only by this way, Wal-Mart can been more popular among the consumers in the foreign countries.
5.0Conclusion
From what we have discussed above, we have been quite familiar with the strategic management of Wal-Mart. It is obvious that the strategic management of Wal-Mart is successful seen from the business policy and SWOT analysis. It is the good example for the other retailers. Adopting the same management, the other retailer also can achieve a better development. However, every management is not perfect. The
organisation should pay attention to find the problems and solve them timely. It is believable that Wal-Mart can become the global retailer in the near future after solving the problems and keep the good strategic management.
Reference
AllBusiness, 1999-2011, What Is Strategic Management?
Cisco, 2011, The Wal-Mart Story
Harold C. Bason, 2000, Business Policy and Strategy: An Action Guide Homewood, IL: Irwin, 1969, NetMBA, SWOT ANALYSIS
Marketing Strategy, 1998，SWOT Analysis written by Anthony C. Danca Marketing Teacher Ltd, 2000 – 2011, SWOT Analysis Wal-Mart RHW, 2010, GEMET - Concepts, version 2.4, 2010-01-13
Wal-Mart Global Information Websites, 2011.Walmart China Factsheet