Strategic Choice and Evaluation - Wal-Mart - Admission/Application Essay Example

Strategic Choice and Evaluation (Wal-Mart) Strategic Choice and Evaluation (Walmart) Introduction Growth in business is something for which many organizations whether small or large, strive to attain. While small organizations want to get big, large organizations want to get even bigger. Most organizations seek to grow in order to accommodate their increased expenses, which are likely to develop over the years. On the other hand, inflation also raises the total costs of everything hence making retaliatory prices to increase. The cost of benefits is likely to rise due to their very structure (Tovstiga, 2013). Therefore, profit improvement and cost eliminations must be conducted continuously while organization revenues must always continue to increase to broaden base. Most organizations desire to grow in order to thrive and not just to survive. Realizing organizational growth however means different aspects to different organizations. However, the ultimate goal of many organizations is to make enough profits, revenue, so net profit and other financial data (Hiles, 2011). Other business owners tend to use sales figures, physical expansion, number of employees and other criteria in their judging organizational growth. Growing business are always making profits, fuel innovation, attract capital investment and provide positive work environments for their employees. With this in mind, this paper will generally identify some of the best value discipline for Wal-Mart. The paper will also identify Wal-Mart’s best generic strategy and grand strategy. Key Points about Wal-Mart Stores Inc. By 2006, Wal-Mart Stores Inc. was the largest retail organization not only in the U.S but also across the globe in terms of sales volumes. The franchise unit had more than 3,000 locations which included discount stores, company’s Supercenters and neighborhood Markets across the United States (Fishman, 2006). On the other hand, SAM’S CLUB unit boosts of at least 567 locations that included warehouse membership clubs. In general, Wal-Mart International had more than 2,285 locations in more than 10 countries (Fishman, 2006). Despite its sales volumes, the management had special concerns regarding the behavior of the organization’s stock. Wal-Mart’s stock had rapidly fallen. Even though Wal-Mart’s board of directors had continually raised dividends and repurchased stock, the company’s stock had failed to rise again. Alternatively, the organization needed a strong program, which would help in pre-empting some of its social critics (Fishman, 2006). Best Value Discipline for the Organization Value discipline selection refers to a central act, which shapes the entire subsequent plan and company’s decisions. In this case, it will combine the entire Wal-Mart Company from its competencies towards its culture. Best value will define what Wal-Mart does in the market. Some of the best value disciplines in which Wal-Mart can apply as part of its strategic and evaluation choice include; operational excellence, product leadership and customer intimacy. Operational excellence Operational excellence in this case will help provide Wal-Mart Stores Inc. with middle-of-the-market products at excellent price with least inconveniences. Going by the proposition, Low price and hassle-free services best works for Wal-Mart Stores Inc. Product Leadership Wal-Mart Stores Inc. should concentrate to offer products and services, which will push performance boundaries. Customer intimacy Wal-Mart Stores Inc. should always strive to offer products, which the market wants and to what specific clients wants. The firm should not pursue one transaction but it should cultivate customer relationships. It should also specialize in satisfying its unique needs. Generic Strategy for the Organization Wal-Mart Stores Inc. attractiveness in the retail industry is determinant of its profitability. Even though a particular industry may have below-average profitability, an organization, which is optimally positioned, has the ability of generating superior returns and that is where the generic strategy for an organization comes in (Cobb, 2003). There are four generic strategies, which are applicable in Wal-Mart Stores Inc. to allow it realize its growth. The four generic strategies in this case are cost leadership strategy, differentiation strategy, focus strategy and integrated cost leadership-differentiation generic strategy. Cost Leadership strategy For Wal-Mart Stores Inc. to practice cost leadership, it must be able to compete for large customer numbers through pricing. In this case, cost leadership will work well when services and goods in the firm are standardized. By doing this, Wal-Mart Stores Inc. will sell generic acceptable goods and at a lower price (Hiles, 2011). Differentiation strategy Differentiation strategy in this case will allow Wal-Mart Stores Inc. to provide its products with distinctive qualities that are valued by its customers. Alternatively, Wal-Mart Stores will have to establish a creative product development team and ensure that it has a corporate reputation for being innovative. Focus Strategy Implementation of this strategy will require that Wal-Mart Stores Inc. to concentrate on specific product line, market niche, geographical area and specific customers. This strategy aims at serving limited group of customers in a more effective manner than its competitors. Implementing the customer focus strategy will however require the company to establish the direction of its indicators (Cobb, 2003). The company will also have to know its exact customers. Separating the main customers from the non-customers will be important for the company. Alternatively, the company will have to know its key competitive market differentiator. Lastly, Wal-Mart will have to distinguish some of its business threats. Integrated Cost Leadership-Differentiation strategy An organization that integrates strategies instead of depending on single generic strategy will have the ability of adapting and quickly learn new technologies. Adopting this generic strategy will allow Wal-Mart to have less distinctive products (Hiles, 2011). Grand Strategy for the Organization Application of Grand Strategy by Wal-Mart will help the organization calculate and develop its economic resources. In as much as this strategy mainly applies to national resources or band of nations, it will still be effective for Wal-Mart Stores Inc. towards the attainment of its moral resources. Recommendation Just like any other organization, Wal-Mart Stores Inc. has been experiencing various challenges including fall in stock despite the fact that its board of directors has been trying to raise dividends and repurchasing stock in order to make the company rise again. It is quite common that most organizations fail to attain their desired growth targets and goals in profitability and revenues (Cobb, 2003). Based on research studies, there are two main reasons as to why many organizations including Wal-Mart fall short of attaining their growth objectives for profitability and objectives. Inadequacy opportunities considerations within business core and lack of organizational structures, which can support successful execution, are usually blamed for derailing organizational growth. Increasing success probability in the organization generally depends of various factors. One way in which Wal-Mart Stores Inc. can increase its growth is by strengthening the execution infrastructure. This will be possible if the organization invests in safer bets. Regardless of the growth strategy selected by the organization, Wal-Mart Stores Inc. must always be up to standard especially in supporting successful execution. Attaining this would require that the organization utilizes its leading performances drivers and leading indicators which align with the strategy selected (Rao & Krishna, 2003). The organization also needs to grow leaders at all levels thus both the managerial and the non-managerial. Secondly, the company needs to establish a process, which will help identify strategies with high success probability. In this case, there are three customer growth strategies, which can be used by the organization. The three growth strategies in this case are; growing of the core business, growing of adjacent opportunities and growing by sub-segmenting customers (Tovstiga, 2013). The right recommendation is that, senior managers in the organization initiate the process by considering some of the growth potential of the organization within the current core business. Alternatively, it will also be important to consider opportunities that are associated with the creation of innovative value propositions especially for underserved customer groups. References Cobb, C. G. (2003). From quality to business excellence: A systems approach to management. Milwaukee, Wis: ASQ Quality Press. Fishman, C. (2006). The Wal-Mart effect: How the worlds most powerful company really works, and how its transforming the American economy. New York: The Penguin Press. Hiles, A. (2011). The definitive handbook of business continuity management. Hoboken, N.J: Wiley. Rao, V. S. P., & Krishna, V. H. (2003). Strategic management: Text and cases. New Delhi, India: Excel Books. Tovstiga, G. (2013). Strategy in practice: A practitioners guide to strategic thinking. Hoboken, NJ: John Wiley & Sons, Inc. Read More