Strategic Thinking for Wal-Mart 1.0 Introduction Today, creating a better future for the organization is the most difficult task of a manager, leader or executive. The future is unforeseeable and planning alone will not guarantee success; thus, organizations need people who have the capacity to deliver an ideal future…
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According to Altier (1991, p.21), “to survive in tomorrow’s increasingly competitive world, companies are going to adopt a modus operandi that is coming to be known as strategic thinking.” Wal-Mart Stores Inc. is one of those successful industries that are using strategic thinking to achieve competitive advantage within the retailing industry. According to a retail consultant Patricia Pao, “in successful retailing, it’s usually 10% of a great idea and 90% execution, but at Wal-Mart 90% goes into strategic thinking and just 10% execution at the store level” (cited in Gogoi, n.d.). The main thrust of this paper is to examine and analyze the role and impact of strategic thinking for the competitive options of Wal-Mart. 2.0 Wal-Mart Stores Inc. Wal-Mart is one of the successful retailers in terms of sales volume, revenue, and market share. This 40-year old company was founded by Sam Walton in 1962, and it dominated the local market of the United States and other countries. Wal-Mart began to trade in the New York Stock Exchange under the ticker symbol NYSE: WMT and became one of the most reliable stocks because its investment risk is not alarming. The business is operating globally, and its top competitors include Target Corporation, Costco Wholesale, and Carrefour. Wal-Mart net sales in 2008 ($373.8), 2009 ($401.1) and 2010 ($405.0) are growing at lower rates, and its return on investment (ROI) is not changing nor growing at 19.3% (Walmart 2010 Annual Report, n.d.a). These figures only indicate that Wal-Mart’s performance in the past years is struggling caused by ineffective plans and techniques. Aside from internal defects, the sluggish growth can also be attributed to external elements such as intense competition (local & international) and economic instability caused by recession. As Wal-Mart’s life cycle gets into the maturity stage, the number of powerful competitors has increased because the rate of sales and profits are high; however, the overall growth of the industry is at a very slow-paced manner. Cost at this level is lesser because of expansion and scale economies, but promotional activities need to be uplifted to make customers more knowledgeable about the product and service offerings. In fact, Wal-Mart executives have doubled their advertising expenses this year just to reach a broad group of consumers (Martin, 2011). Furthermore, Wal-Mart has experienced the most intense competition, which in turn has lowered its sales and market share. However, it remained as the world’s largest corporation based on the Global 500 and Fortune 500 annual ranking despite poor sales and market share (DuBois, 2011). In addition, it is also recognized as the most admired company because it produced a wide variety of product and services, highest-quality service to customers, and offered the lowest prices of retail goods. “CEO Bill Simon has freely admitted to Wal-Mart’s missteps in the past, which included prematurely removing profitable products, overly aggressive rollbacks, and poor relationships with merchants” (Sun, 2010). Thus, to regain its market share and high record sales, executives have concentrated on seeking and developing new approaches through strategic thinking. They go back to the basic, but this time they are more observant to their environment and turn into an out-of-the box thinker. They have gathered as much
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(Strategic Thinking for Wal-Mart Business Essay Example | Topics and Well Written Essays - 3000 Words)
“Strategic Thinking for Wal-Mart Business Essay Example | Topics and Well Written Essays - 3000 Words”, n.d. https://studentshare.org/business/1393120-business-in-focus.
The emphasis of the case is on the problems faced by the Wal-Mart in the international markets. Few years back, Wal-Mart entered into the China’s market and this example has been quoted to study the problems faced by Wal-Mart in its supply chain when it expands its operations in the international markets.
III. Overview of Wal-Mart Company IV. Review of Wal-Mart Business Strategy V. Proposed Wal-Mart Business and Human Resource Strategy VI. Implementation Plan VII. Issues Pertaining Implementation of New Strategies VIII. Conclusion IX. Reference Introduction For the purpose of the analogy, the game in the business can be likened to that in sports.
42). The organization’s value and brand name augments if they efficiently operate in foreign markets (Sullivan & Sheffrin 2003, p. 20). The other reasons for going international differs, which entail development of international standards, significant customer access, privatization programs, enhanced communications, decreased barriers in trading activities, enhanced information technology, transportation and distribution, and cultural convergence (Freedman 2004, p.
The most significant level for developing a value chain is not the corporate or division level, but the business unit. Product pass through actions of a chain in order, and at each action the commodity attains some value (Bennett & Blythe 2002, p. 17). Chain of activities provides the commodity extra added value than total of the separate values of activities.
Some believe that not all business practice maximizing profits and that they are there to assist their customers and offer a service or product. However, this study aims to stress that every business's practice is to maximize profits. Having stated this, the goal of profit maximization does not mean that it is wise for businesses to act and conduct business in an unethical manner in order to gain profit maximization.
Upon review of the information in the study, it is clear that the company has a focused strategy regarding cost management. In fact, Wal-Mart specifically seeks innovative and aggressive ways to control costs within its own operating systems, as well as aspiring to be the market leader in low-cost product offerings to the public.
Dominating global retailing is the US firm Wal-Mart - it dominates North American industry directly and the global industry by example. Wal-Mart having 1.2 million of employees is considered as the world's largest retail stores chain. Every week, 138 million shoppers visit one of Wal-Mart's 4750 US Stores to benefit from their everyday low prices.
While in today's context it can be said for sure that the retail business has become quite competitive all across the world, the situation was quite different during the formative years of Wal-Mart. As per a study carried out by Plunkett Research Ltd. considering the number of businesses and the number of employees, the retail business with over 15 million employees happens to be one of the largest industries in US.
Wal-Mart started its international operation by entering the emerging markets. Its approach to emerging markets illustrates a link between globalization of markets and competitive strategy. Strategic management helps to understand and define the goals, vision, mission, objectives, roles, and responsibilities of the organization.