Wal Mart Corporate Guidelines - Assignment Example

Question 1 Wal-Mart is recognized as one of the most popular and branded American multinational retail corporation that operates successfully in numerous parts of the globe. Since its establishment in 1962, it became successful in enhancing its total revenue by US$ 476.294 billion in 2014 as compared to US$ 468.651 billion in 2013. Such a reputed image became possible for Wal-Mart mainly due to its corporate mission, which depicts to help the target customers to save money in order to live a better life. By doing so, the organization of Wal-Mart became successful in amplifying its reputation and brand image in the market among many other rival players. Other than this, by presenting the products at a competitive price, the reliability and loyalty of the customers enhanced over the organization of Wal-Mart that amplified its profitability and market share among other contenders (Wal-Mart, 2014). Apart from mission, the vision statement of Wal-Mart is to work in a coordinated way so as to lower the total cost of living of that target customers. Then, the customers might live a better life by spending lower amount on purchasing varied products. Such a vision proved extremely effective for Wal-Mart thereby expanding itself in more than 27 countries with over 11,000 stores. As a result of which, its total assets increased by US$ 204.751 billion in the year 2014. In addition, the objectives and views of both the internal and external stakeholders such as employees, board of directors, customers, suppliers and lenders are entirely similar to that of the mission statement of the organization of Wal-Mart. This means, the stakeholder’s desire to live a better life by paying less matches with organizational mission and so it acted as a boon for the organization by amplifying its opportunities and dominance. In addition, high respect and fair wage rate of the employees, also acted as another key factor that lead to the success of the organization in this age of competitiveness among others (Wal-Mart, 2014). Hence, it might be revealed from the above information that the vision and mission statement of the organization of Wal-Mart helped it to increase its strengths and opportunities that reduced its threats of substitute products, change of preferences of the customers etc. Question 2 The ways by which, Porter’s five forces of competition offers impact over the operations and functioning of the organization of Wal-Mart are presented below: Bargaining power of the customers: the bargaining power of the customers is extremely high. This is mainly due to the presence of numerous rival players such as K-Mart, Dollar General, Lowe’s Food, CVS, Wal-greens and Sears etc. Therefore, in order to increase its range of customers and reputation in this competitive market, the organization of Wal-Mart tried to offer varied types of modern and value-added products at a quite low cost. As a result of which, the profitability and brand value of the organization of Wal-Mart increased to a significant extent among others (The Wall Street Journal, 2011). Bargaining power of the suppliers: the bargaining power of the suppliers is quite low as the organization purchases huge quantity of products. Apart from this, as the rate of switching of cost of the organization of Wal-Mart is low, so the bargaining power is extremely low. However, the organization of Wal-Mart became successful in attainment of varied types of products at a quite lowest cost and so it easily presented the products at a competitive cost to its target customers (The Stevencon Company, 2011). As a result of which, the reliability and dependency of the customers over the product lines as well as the organization of the Wal-Mart enhanced day by day as compared to its competitors. Due to which, its market share increased as presented below: (Source: The Stevenson Company, 2011) Threat of Substitutes: the threat of substitute products is extremely high. Due to which, the organization of Wal-Mart always desires to fulfill the changing taste and preferences of the customers thereby amplifying its total sales and revenues by US $ 476.294 billion in the year 2014(Wal-Mart, 2014), (The Wall Street Journal, 2011). Apart from this, the gross margin of the stores of Wal-Mart also increased significantly as presented below: (Source: The Wall-Street Journal, 2011) Competitive rivalry: the competitive rivalry is extremely high due to the presence of numerous rival players such as CVS, Wal-green, K-Mart etc. However, due to the implementation of the strategy of presenting, value-added products at a competitive price, maximum extent of the customers motivated towards this brand among others. Due to which, the total revenue and leadership of Wal-Mart increased significantly. Potential entrants: the barriers of entry are extremely high due high capital requirements and high economies of scale. Along with this, the organization also needs to attain a very specific distribution channel so that the products are easily available to its customers. But, this is extremely difficult and due to which, the rate of entry of potential rivals is low. This acted as catalyst for the organization of Wal-Mart that amplified its customer base and productivity (Drummond & Ensor, 2006). Therefore, from these above mentioned points, it might be clearly analyzed that porter’s five forces offers positive impact over the total sale and profitability of the organization of Wal-Mart among others. Question 3 The SWOT analysis of Wal-Mart is presented below: Strengths: Wide range of diverse products and services: the organization of Wal-Mart offers a wide range of diverse products and services to its customers so as to enhance their reliability and dependency. Along with this, due to the presence of numerous product lines, customers of varied income groups and cultures get attracted towards the organization that amplified its market share and loyalty in the market. Competitive price: as the prices of the products and services of the organization of Wal-Mart are extremely competitive, so the level of preference of the customers is high as compared to others. Convenient location: the location of the organization of Wal-Mart is also extremely convenient for shopping and so it is highly favored by the customers. This acted as a driving force for the organization that amplified its prosperity and demand in the market among its other rivals (Stagnito Media, 2014). Strong supply Chain: strong supply chain of Wal-Mart also helped it, to amplify its demand and reliability in the market. Moreover, due to extremely good supply chain, all the products are very easily available to its customers that enhanced its profitability and market share. Weaknesses: Lack of global presence: due to lack of global presence, the demand and reputation of the organization of Wal-Mart reduced to a significant extent. Behind in e-commerce: the organization of Wal-Mart is quite behind in e-commerce as compared to its rival players. As a result of which, its ranking and popularity is quite low among others. Opportunity: Improvement in the purchasing power of the individual: due to improvement of the per capita income, the rate of purchasing power of the individual also increased. As a result of which, the total sale and profitability of the organization of Wal-Mart increased that amplified its prosperity and brand image among others (Stagnito Media, 2014). Increase of online sales: due to the presence of online sites, the rate of online sales increased significantly. However, due to improvement of the online sales, the rate of demand and profitability of the organization of Wal-Mart also increased that improved its reliability and position in the market. Expansion to new regions: due to expansion in various new locations, the range of customer bases and profit margin of the organization of Wal-Mart increased considerably as compared to others. Threats: Intense competition: due to the presence of numerous rival players, the rate of competition is extremely high. Therefore, the organization of Wal-Mart might try to present varied types of new designed clothes and products so as to satisfy the changing requirements of the customers. Cultural barriers: the organization of Wal-Mart tried o present products of varied culture and creed so as to attract the customers of varying religions. The strengths and opportunity of Wal-Mart are presented above that reduced the weaknesses and threats significantly in this age of aggressiveness. Question 4 After evaluating the strengths and weakness of the organization of Wal-Mart, it might be stated that cost leadership strategy might be the best approach for it. This is because; in the age of extreme competition, enhancement of the brand image and reputation of an organization is the most essential requirement (Stagnito Media, 2014). Without which, an organization may not sustain for long run among other existing rival players. However, in order to amplify the position and competitiveness in the market, the organization need to offer high quality of products at a quite lowest price so as to attract a wide range of customers of varying income groups and age groups. Only then, the organization of Wal-Mart might become successful in amplifying its customer base and loyalty in the market among many other rival players such as Tesco Plc, ASDA, Metro, CVS etc. But in order to offer the products at a lowest cost, the organization need to accomplish it at the lowest possible cost from its suppliers. Only then, Wal-Mart might retain its customers for a long time thereby reducing their rate of switchover costs. Apart from this, due to the presentation of varied types of value-added products at a lowest price, the brand image and customer loyalty might get increased among others. Question 5 In order to amplify the sustainability and reliability of the organization of Wal-Mart, it might implement cost leadership strategy at business level. So that the organization might fulfill its mission of presenting high quality of products at a competitive cost in order to amplify the loyalty and value of the customers among others. Along with this, due to the implementation of the strategy of cost leadership, the organization might increase its demand and brand image in the market among other rival contenders (Wal-Mart, 2014). Other than this, the organization may implement market penetration strategy at corporate level. By doing so, the organization of Wal-Mart might amplify its customer range and prosperity in the market. Moreover, due to the penetration in various new markets, the organization of Wal-Mart might amplify its profitability and total revenue to a significant extent among others that may increase its opportunities and strengths. Question 6 The organization of Wal-Mart might try to highlight the benefits of the above mentioned strategies through its online sites as well as social media networks. Only then, it might increase the level of awareness of its stakeholders such as suppliers, customers, lenders and employees. The prime intension or aim of the communication plan (CP) of Wal-Mart is to satisfy the requirements of the customers as they are the prime strength of the organization. However, in order to fulfill them, the organization of Wal-Mart desires that, its employee’s and supplier’s might work in a coordinated way (Drummond & Ensor, 2006). Only then, it might fulfill the changing requirements of the customers in an effective way that may amplify its profit margin and demand in the market among others. However, in order to present the ideas to its employees and members, it might make use of emails, websites and intranets so as to amplify its reputation and demand in the market. After implementation of this CP, the managers need to monitor its progress regularly in order to analyze its impacts. Question 7 The corporate governance mechanisms used by Wal-Mart are effective relationship with the employees and customers. However, in order to do so, the organization tries to respect the employees and presents fair wages. By doing so, the level of devotion and commitment of the employees gets enhanced day by day that helps to satisfy the changing requirements of the customers in an effective way. Other than this, the organization of Wal-Mart also tries to maintain a good relation with its stakeholders such as lenders and suppliers by offering all sorts of information to them at accurate time. By doing so, the level of interpersonal conflicts among the employees and managers reduces to a considerable extent that amplifies their coordination and support. In addition, by maintenance of proper relationship with the stakeholders, the supply of the materials remains always in time and also at a quite lowest cost, which is extremely helpful for the organization and its managers. Question 8 In order to improve the reputation and dominance of the organization of Wal-Mart, the CEO, Mr. Lee Scott maintained an autocratic leadership style. He used to present the orders and every member of the organization need to follow it effectively (Wal-Mart, 2014). However, in order to improve the self esteem and motivation of the employees, Mr. Scott might try to discuss and encourages all other employees to participate in the decision making processes, prior implementation of any strategy. This strategy might prove effective for the organization thereby amplifying its profitability and brand value in the market among others (Wal-Mart, 2014). Question 9 In order to enhance its sustainability and brand image, Wal-Mart offered more attention in over corporate social responsibilities. For example: It started empowering women employees within the organization. By doing so, it might prove effective in reducing the level of unemployment thereby amplifying the economic condition and status of the nation as compared to others. This amplified its reputation and reliability in the market (Wal-Mart, 2014). References Drummond, G. & Ensor, J. (2006). Introduction to Marketing Concepts. New York: Cengage Learning. Stagnito Media, (2014). Research: Shoppers Find Little Differentiation in Grocer's Private-Labels. Retrieved from: http://www.storebrandsdecisions.com/news/2012/05/22/research-shoppers-find-little-differentiation-in-grocers-private-labels. The Stevencon Company, (2011). The photo Kiosk Market share , 2011. Retrieved from :http://stevensoncompany.com/traqline/traqline-photo-behavior/. The Wall Street Journal, (2011). Wal-Mart, Erstwhile Discounter, Pays Price By Kelly Evans. Retrieved from: http://online.wsj.com/news/articles/SB10001424053111904253204576510720782711288. Wal-Mart, (2014). About Wal-Mart. Retrieved from: http://www.walmart.com/. Wal-Mart, (2014). Empowering Women Together Program. Retrieved from: http://corporate.walmart.com/global-responsibility/womens-economic-empowerment/empowering-women-together-program. Wal-Mart, (2014). Wal-Mart Corporate Guidelines. Retrieved from: http://media.corporate-ir.net/media_files/IROL/11/112761/corpgov/corpgovguidelines.pdf. Read More