Wal-Marts Strengths - Case Study Example

Introduction: Wal Mart is the largest retail company through out the world is spread over the 14 countries and employees almost over 2 million people. The company has made enormous revenue of over $378,799 million for the year end January 2008. The segment consists of three different retail formats, all of which operate in the United States. In addition, the Company owns an unconsolidated minority interest of approximately 37% of The Seiyu, Ltd., a retailer in Japan. 1. Introductory Analysis Wal-Mart’s Strengths: Wal mart’s main strength lies in the fact that the company has been in the market for a long time and has created a strong brand name for itself across a number of countries. As already mentioned earlier, the company earns majority of its revenue from the US – amounting to almost 75% of the total revenue. This helps the company penetrate into the markets more easily and serve a wider range of customers. Wal Mart has also taken the initiative of starting its own brand of products thus creating a good mix of both private brands as well as external brands, hence providing customers with a larger variety and choice of goods and thus improving customer relationships. Wal Mart has also created a good competitive edge for itself using strong marketing techniques. Also the employee training and loyalty is a major strength for the company. The employees are referred to as ‘associates’. Also, it is important to realise that the company is much focused on ensuring that the roles, duties and aims are clear to all employees. Hence the managers provide an hourly meeting every morning to deal with the figures and goals for the company. Wal-Mart’s Weaknesses: The main weakness of Wal Mart however lies in the fact that the company has had difficulties in catering in markets like Korea and Germany. Due to this inability of meeting the requirements of the countries and the inefficiency in dealing with the aggressive Korean discounters, Wal Mart has had to close down stores in these markets. Also the company has been involved in a number of legal issues. Another one of the cases being no provision for lunch/ meal breaks for employees working for over six hour shifts. All these have placed the company in the spot light and the brand name of the company has been affected due to the unfavourable outcomes of these cases. Wal Mart has also been faced with a number of union problems and gender discrimination problems along with high employee turnover. There have been a number of disputable cases like the firing of employees any sympathy towards unionization. Issues with moving into China There are a number of aspects that the company needs to keep in mind while entering into Chinese markets. These include, the culture, international laws, language to ensure better performance of the company in the country. One major issue of the move is that the culture and the working environment is completely different from that of united States, hence there need to be a number of adjustments and improvements that need to be made to reach the country’s goals and aims. Also the human resources scene in China is completely different from that of the United States. It has to be understood and this needs to be kept in mind while detailing the plan for the entrance into the country. Implications of unionization on Wal-Marts compensation plans in China: It has been noted that in the present times the store has been forced to accept the unions at China. This causes a number of issues as the company is an American firm. It has also been noted that the American firms are waging a huge lobbying effect and effort for both prevention as well as protection against the laws. This has lead the company to be faced with high expenses and high rigidity. 2. Suggested Plan Human resources have been noted to be one of the biggest and most serious issue for almost all corporate around the world. Thus the plan that is being suggested will be using Maslow’s need theory as a base, as the issue faced is the possibility of attaining and retaining the employees in the company. Abraham Maslow in developed the theory in 1943. This theory aimed at understanding why the needs of individuals change over time. Abraham Maslow named this theory as the needs hierarchy of employees. He developed that there is a difference between the motives and drives and every individual has nine main needs and motives to work. The compensation plan mainly will include: a) A fixed basic salary, b) Performance related pay, c) Clear performance appraisal policy. Also the plan will include the benefits for the employees based on the Chinese law and will include all details like the medical and annual leave, examination leave, medical check up subsidy and many more. Also other benefits like the loans, gifts and expenses. The main reasons for the plan are to allow the company to retain the Human resources. The main person involved will be the head of the Human resources department. As for the compensation committee, the main people involved will be the CEO, Human resource head and the top management. The plan includes a separated grade system for all levels of staff. These will be based on the following bands: Band A: Senior Management, Band B: Middle Management, Band C: Junior Management, Band D: Administrative Staff, and Band E; Hourly Based employees. As mentioned the earlier, the compensation will be based on the Chinese Standards and will also include the International Standards for Expatriates. The compensations included in the plan will be non cash incentives, as well as cash incentives. This will be mainly to provide a higher motivation to the employees. Various awards will also be included as a part of the compensation to help increase the levels of motivation among the employees. Summary: The plan that has been discussed here is keeping in mind completely the employees and modes to motivate them. This is to create a win – win situation for both the employees as well as the company. Since the plan has been based on Maslow’s theory, the plan includes a compensation to be able to meet the needs of the employees at each level of the hierarchy. The plan has also taken into account the cultural and legal aspects of the country as well. Read More