Strategic Management and Strategic Competitiveness - Essay Example

The evaluation of strategic management frameworks and the identification of guidelines to highlight the degree of a firm’s strategic competitiveness have emerged as critical factors in assessing the future of the business with regards to the development of its corporate objectives and functioning in the long run. In a highly competitive business environment which is characterized by the growing influence of technology and a rise in globalization, value creation is a major consideration for firms which aim to transcend the influence of competitive forces. Considering this factor, the concept of strategic competitiveness can be applied to explore the issue as it focuses on the implementation of strategies for aiding the creation of value. The implications of strategic decision making are far reaching such that the senior management must be able to demonstrate skills in prioritizing strategy and accordingly applying it to a given scenario. By applying the example of Wal-Mart Stores, which is one of the leading retailers and public companies across the globe, this discussion focuses on understanding the impact of strategic guidelines on a business of such scale. The key points which have been assessed in this analysis aim to 1) examine the impact of globalization and technology on Wal-Mart Stores 2) the exploration of how pertinent strategic models can be applied to comprehend how the firm can earn returns that are above average 3) assessing how the vision and mission statement influence a firm and lastly 4) conducting an assessment of how stakeholder categories have an ability to influence the company. The influence of globalization as identified within the context of a large scale firm such as Wal-Mart is essentially linked with the understanding of how the application of the concept impacts the decision that a firm takes. Accordingly, the exploration of this concept involves examining the decision making and objectives of the company. As highlighted in the research conducted by Lavallee and Boyer (2006), the influence and power of globalization with respect to Wal-Mart possesses the ability to shape external forces and define their impact on subsequent decisions. For example, one of the company’s primary goals in recent years has been marked by launching a collective effort to advance the firm’s expansion, in the case of Wal-Mart’s intended expansion into Colchester the forces of globalization worked to present a conflict between the aims of the community and a desire to advance on an international scale (Lavallee and Boyer, 2006). The aforementioned example only represents how a faction of social elements was impacted by the fact that globalization possesses the ability to shape cultural and social factors. However, in another case of how globalization affects Wal-Mart, Backer (2006) highlights how multinationals like Wal-Mart have emerged as legislators of global supply chain activity due to the fact that they have an influence over their suppliers and can dictate terms of agreement. This aspect represents how the expansion of the company’s business due to globalization positively enables the company to retrieve the most favorable terms of agreement and benefit from a decline in overhead expenses. From the technological front, it must be highlighted that the superior financial position of Wal-Mart and its large scale presence allows the company to benefit from technical economies of scale. Consequently, when compared with competing retailers Wal-Mart’s utilization of technology allows it to sustain a competitive edge because the company has adopted advance supply chain methodologies since the late 1990s. This comprehension is reflected in the study of Price (1996) who asserts that the company’s employment of just-in-time techniques has allowed it to carve a strategic advantage which also allows the firm to exercise service differentiation. The application of the industrial organization model with reference to Wal-Mart entails focusing on the influence of industry related factors as the primary sources in contributing towards the success of the business (David, 2012). The application of the model calls for outlining the presence of threats and opportunities within the industrial context which can allow the business to benefit from the development of the framework. In order to seek advantages of this framework, Wal-Mart should most importantly understand the emergence of trends in the retailing industry. According to a report compiled by Bain (2014), emerging economies are expected to represent an astounding 60 per cent growth in global GDP and this specific expansion in GDP figures is supposed to be headed by a staggering of 60 per cent retail growth in the respective economies. Considering this factor, it should be noted that the representation of retail growth for emerging economies provides a significant opportunity for Wal-Mart to lead an expansion into the industry of promising economies. This would allow the company to benefit from above-average returns. However, at the same time it is important to understand that as per the recommendations of the industrial organization model the key to success is not only rooted in identifying opportunities but it should also be led by appeasing threats. In this case, the most emergent threat to the company is faced by the changing shape of retailing as the industry continues to evolve into online channels and progresses towards establishing online networks instead of brick and mortar establishments. The convenience and accessibility of online retailing therefore, presents a threat to Wal-Mart’s expansion and current business. The application of the resource based view with regards to Wal-Mart diverts the discussion towards understanding how the company’s superior management of its supply chain has allowed the business to gain a competitive advantage over its competition. The heterogeneity and exclusiveness of the company’s resource in this case allows for a restriction in terms of disallowing possible replication on the part of competitors to encourage the generation of superior returns. Wal-Mart’s mission statement is characterized by a direct and straightforward representation of what the company intends to achieve and to a certain extent it also defines how the company aims to achieve this goal. By suggesting the concept that Wal-Mart intends to promote cost efficiency and offer competitive prices, highlights that the company believes in offering goods at lower costs than that of competitors and encourage customers to have a shopping experience whereby they are not discouraged to explore more options. Therefore, the success of the company has been defined on this basis because it has surfaced as a low cost leader through the application of cost minimizing measures and reductions in supply chain. Furthermore, this image has also allowed the company to project a brand image of convenience and accessibility as customers generally feel that they can carry out a purchase at their local Wal-Mart because it is known for supplying a range of products at the most competitive prices. Consequently, the vision of the firm rests on the promotion of values whereby, integrity and responsibility remains a key factor in determining business activities and operations. The company’s policy is to provide a network of stores which redefine convenience and accessibility. The company also adheres to a vision of promoting family and community values, the consideration that Wal-Mart stores aim to provide a comprehensive and complete experience entails that the company believes in structuring a framework of retail which is comprehensive and wide-ranging. The success of the company is most critically guided by the role of its stakeholders and this consideration is indeed true in the case of Wal-Mart. The most critical stakeholder category in the retailing business comprises of the customers and employees. The promotion of a positive and strong corporate culture across Wal-Mart has been promoted by the firm as a critical factor in leading the company’s employees. However, the company has periodically been accused of launching policies which represent a violation of its commitment to serve its employees in accordance with the view of a positive corporate culture. Most importantly, the company has been accused of paying its employees at significantly low hourly rates. This has led to the creation of a negative brand image in the eyes of customers and labor unions which have openly discussed the violations of the company against its employees thereby, affecting the company’s success in the long run unless these issues are addressed. Moreover, the company has also launched a system of stakeholder engagement whereby, the firm focuses on launching a framework of providing the optimum customer service to its customers (Walmart, 2014). However, it is important to note that this venture is not limited to customers but also expands to other key stakeholders such as associates, suppliers and shareholders (Walmart, 2014). Moreover, the company has also devised forums to actively allow the participation of its stakeholders on various issues which can allow the firm to gain valuable insight on the demands of the stakeholders. The application of strategic management techniques and frameworks play a fundamental role in assisting companies to achieve their long term objectives through the creation of value and the development of a competitive advantage. As noted in the example of Wal-Mart the company’s management structure focuses on applying strategic recommendations to guide the attainment of success. References Backer, L. C. (2006). Economic globalization and the rise of efficient systems of global private law making: Wal-mart as global legislator. Conn. L. Rev., 39, 1739. Bain (2014). Are you ahead of the curve in emerging markets?. Bain and Company. Accessed from < http://www.bain.com/Images/INDUSTRY_BRIEF_Ahead_of_curve_in_emerging_markets.pdf> [7th Oct, 2014] David, F. R. (2012). Strategic Management: A Competitive Advantage Approach, Concepts and Cases. Pearson Higher Ed. Lavallee, T. M., & Boyer, M. A. (2006). Globalization and Local Governance: Implications from Wal‐Mart's Expansion. International Studies Perspectives,7(3), 254-266. Price, R. M. (1996). Technology and strategic advantage. California Management Review, 38, 38-56. Read More