Strategic Management and Strategic Competitiveness: Wal-Mart Stores - Assignment Example

? Strategic Management and Strategic Competitiveness Introduction ‘Strategic Management’ is defined as a term which is used to designate the strategic decision making process within an organizational context. It is a process that comprises various aspects including the internal as well as external environmental elements in which an organization functions. From an overall perception, strategic management can be described as a process through which controlling and implementing the determined strategies can be confronted (Thompson & Martin, 2008). ‘Strategic competitiveness’, on the other hand, is termed as an attribute which is required essentially to maintain a strategic relationship with the environmental elements for gaining competitive advantages in the industrial context (Baloch & Inam, n.d.). Thus, strategic competitiveness can be regarded as a consequence or outcome of effective strategic management from a critical viewpoint. Undoubtedly, strategic management and strategic competitiveness are two fundamental attributes which are essentially required by modern day organizations to achieve as well as sustain in the leadership position. From a broader perspective, these two concepts can be identified as based various factors or managerial elements such as organizational vision, mission and its business administration strategies to name a few (Hitt, Ireland & Hoskisson, 2010). Based on this particular notion, the aim of the discussion henceforth will be to analyze the strategic competitiveness and the efficiency of strategic management process as practiced by Wal-Mart Stores, Inc. (Wal-Mart) in its regular business operations taking into account the effects of globalization and technological alterations in its international industrial context. Effects of Globalization and Technology on Wal-Mart One of the positive effects led by globalization which is identifiable in relation to Wal-Mart has been the exposure to worldwide consumer market. It can be stated in this regard that globalization has provided a noteworthy scope to Wal-Mart in terms of cost leadership advantages. It is worth mentioning in this regard that owing to the cost efficient market structure of Wal-Mart in its home country, the company had been able to market its products at a competitive price in the global consumer market. In other words, this globalization effect regulated a balance for permitting the expansion of quality products at a much lower rate in the global markets context which proved to be of great benefit to Wal-Mart (Kutztown University of Pennsylvania, 2005). However, globalization also imposes certain negative implications which are commonly identified in terms of increased competition and significant influence of governmental interventions. It is worth mentioning that owing to such influences, Wal-Mart also had to face certain disruptions in its strategic management processes in performing the responsibilities of Corporate Social Responsibility (CSR). Wal-Mart also had to witness significant challenges in relation to the diversity of cultures and market structures prevailing in different economic contexts all around the world. This can also be regarded as a vital challenge imposed by globalization effects upon organizations (Geref? & Christian, 2009). The effects of technology, in the similar context, can be considered as an important determinant which tends to impose significant impacts on the productivity of the retail outlets of Wal-Mart. Concerning today’s ever changing scenario, it can further be stated that the global retail market has been significantly influenced by the technology advancements. In relation to Wal-Mart’s strategic management initiatives in the global marketplace, can be observed as highly influenced by the technology effects. For instance, the company has been able to confirm efficient customer supply and almost accurate identification of the consumer demands. Technology has also played a vital role in increasing the efficiency of the overall business operations practiced in Wal-Mart by assisting the organization to comply with the rapidly increasing consumer demands in a diverse market environment (Tomovic, n.d). Analysis of Industrial Organization Model and Resource Based Model for Earning Above Average Returns In simple words, ‘above average returns’ are defined as the amount earned on investment which is more than the expected average returns, especially on the supplementary investments with a considerable degree of risks confronted to it. Undoubtedly, such returns play a pivotal role in ensuring the competitiveness of the organization to deal with unpredictable financial downturns. Obtaining above average returns depend on various factors in the global context which can be identified with the application of Industrial Organization Model. The assumption of Industrial Organization Model emphasizes on the identification of external environmental elements which can significantly affect the proper functioning of an organization in the global context (Ireland, Hoskisson & Hitt, 2008). Based on this model, a few opportunities can be observed in relation to Wal-Mart’s global functioning along with a few threats prevailing in its environmental structures. For instance, liberalization of trades can be considered as a significant aspect through which developing economies intend to facilitate Foreign Direct Investments (FDIs) treating it as a key driving force towards long term growth. For globalized corporations such as Wal-Mart, liberalized trade provides with significant opportunities allowing added advantages in terms of cost leadership, lesser government intervention along with greater exposure to market demands. On the contrary, threats can be identified as prevailing in the global context of Wal-Mart. Illustratively global market comprises diverse socio-cultural elements which differ from one market to the other. Managing such diverse socio-cultural elements often raises complexities in the strategic management practices of a particular nation. Exposure to global competitors can be identified as a major threat for Wal-Mart (University of Pennsylvania, 2008). On the other hand, The Resource-Based View (RBV) Model focuses on the internal environmental aspects of an organization when analyzing its strategic competitiveness. The assumptions of the model state that the strengths and the weaknesses of the organization (Ireland, Hoskisson & Hitt, 2008). In this regard, few strengths of Wal-Mart can be identified as the advancement of technology incorporated in the organization’s strategic management process and as its cost leadership strategies. Wal-Mart also possesses certain weaknesses which can be identified as inadequate leadership practices concerning diversity management within its workplace and also within its target global markets. Consequently, in its recent operations Wal-Mart had to witness issues related to customer satisfaction and employee satisfaction (Tomovic, n.d). Vision and Mission Statements of Wal-Mart to Influence its Overall Success The mission statement of the company affirms its aim to maintain better quality and serve its customers in a highly competitive manner to gain maximum profits through effective sales and productivity. Saving money of the customers by focusing on effective and competitive pricing strategy in its strategic management process so as to provide them with assistance to lead a better life is also considered as an important goal of the organization and is thereby included in its mission statement (Arthur W. Page Society, 2013). Correspondingly, the vision statement of Wal-Mart is to preserve its core competencies in the future for attaining competitive advantages and overall growth in the organizational effectiveness through the incorporation of technological advancements and deliverance of quality products to its customers worldwide (The McGraw-Hill Companies, 2011). Impact of Each Category of Stakeholders on the Overall Success of Wal-Mart The different stakeholders of Wal-Mart can be identified as employees, shareholders, suppliers, distributors, governments, customers and the community at large. As a matter of fact, the operations practiced by Wal-Mart can be observed to create a significant influence on the interest of these parties. Similarly, on the other hand, encouragement from these stakeholders tends to impose significant impacts on the overall performance. For instance, efficient skills possessed by the employees will lead to greater productivity in the organization. Shareholders can provide an impact on the success of the organization through effective decision making. Suppliers and distributors provide an impact through on-time deliverance of quality products to meet customers’ demands. Governments also impact organizational practices by imposing trade restrictions, tax charges and implementing various legal as well as political barriers. Customers and the community members also tend to influence the operations of Wal-Mart by depicting their satisfaction level regarding their products and services rendered which further motivates the organization to be more effective (Martha Montag Brown & Associates, 2004). Conclusion From the above observation, it can be comprehended that efficiency in strategic management and strategic competitiveness can be obtained through effective functioning of the organization. It is been observed that Wal-Mart manages its strategies through effective implementation of technological aspects and thereby emphasizing on its capability to render quality products with cheaper costs to its customers. The sole aim of the organization in order to practice continuously improving strategic management initiatives is fundamentally to hold its leading position in the market scenario as well as to maintain its profitability in the overall context through effective performances from the organizational management, its suppliers, distributors and employees among others. It is worth mentioning in this context that the organization, in its globalization practices, had to witness significant challenges along with apprehensive effects in terms of technology aspects. However, owing to its effective strategies and continuously improving business practices, Wal-Mart has been able to attain its competitive position in the global market which can be regarded as the result of its efficient strategic management. References Arthur W. Page Society. (2013). Wal-Mart’s early history: 1960s to 1970s. Retrieved from http://www.awpagesociety.com/wp-content/uploads/2011/09/Wal-Mart_CaseStudy.pdf Baloch, Q. B. & Inam, M. (n.d). Strategic competitiveness: creating firm’s future. Retrieved from http://www.qurtuba.edu.pk/jms/default_files/JMS/3_1/06_qadar.pdf Geref?, G. & Christian, M. (2009). The impacts of Wal-Mart: the rise and consequences of the world’s dominant retailer. Retrieved from http://www.annualreviews.org/doi/pdf/10.1146/annurev-soc-070308-115947 Hitt, M. A., Ireland, R. D. & Hoskisson, R. E. (2010). Strategic Management: Competitiveness & Globalization: Concepts. United States: Cengage Learning. Ireland, R. D. Hoskisson, R. E. & Hitt, M. A. (2008). Understanding business strategy: concepts and cases. United States: Cengage Learning. Martha Montag Brown & Associates. (2004). Wal-Mart senior director stakeholder engagement. Retrieved from http://www.caseplace.org/usr_doc/Wal-Mart_-_Sr_Dir_Stakeholder_Engagement_Job_Description.pdf Tomovic, C. L. (n.d). The impact of information technology on productivity: Dell Inc., Wal-Mart, Microsoft. Retrieved from http://globalhub.org/resources/2713/download/006_Impact_of_IT_on_Productivity_Dell_Inc_Wal-Mart.pdf The McGraw-Hill Companies. (2011). Charting a company’s direction: vision and mission, objectives, and strategy. Retrieved from http://highered.mcgraw-hill.com/sites/dl/free/0078029287/942792/gam29287_ch02_013_036.pdf Thompson, J. L. & Martin, F. (2008). Strategic Management: Awareness & Change. United States: Cengage Learning EMEA. University of Pennsylvania. (2008). Wharton on… Global Markets. Retrieved from http://executiveeducation.wharton.upenn.edu/resources/upload/Global-Markets.pdf Read More