The Secret of Success of Wal Mart - Research Paper Example

The Secret of Success of Wal MartWal-Mart Company started in the early 1960s in America; it has grown into one of the world’s largest retail stores that have witnessed massive growth across all level of competition. As evidenced by its incredible success, Wal-Mart has several competitive advantages over its competitors. For instance, Wal-Mart offers a wide variety of merchandise at very competitive prices. Due to their large purchases, they receive exorbitant discounts from their suppliers and this is passed down to the customers.

Further, they manufacture their own brands and supply goods from local suppliers to retailers. Wal-Mart’s large size and high purchasing power enables the company management to access customers from all over the world and the rest of the US. It also has an incredible team of executives who form its leadership. This has equipped Wal-Mart with management of high caliber. The Company spends its resources carefully with the aim of maximizing their margins while reducing costs. The company focuses on strategies such as everyday low prices that helped it stay ahead of its competitor.

More so, the company’s retailer opened new small stores, which helped it overcome its competitors such as Amazon.com and dollar stores. It faced tough competition from these companies but it managed to make profits. The function of Wal-Mart’s reward system is to attract, motivate, and retain skilled and experienced employees. Wal-Mart’s reward is effective since it guarantees fair treatment of all employees. Wal-Mart Reward metrics Wal-Mart management announced in 2012 that it was going to disburse close to one million dollars in benefits and bonuses to its workers within United States of America.

This shows a monetary reward that the company is able to give its employees in order to motivate them to work hard as the company continues to come up with new products for its customers. In addition to total monetary reward system, Wal-Mart has come up with a unique social responsibility culture. Such sense of giving back to the community has been weakened by employee turnover rate. This reward system is effective since the company helps community directly without dishing out money. In addition, as part of Wal-Mart’s employee compensation program, the company pays or offers some premium for its employees or workers.

This program aims to ensure that each employee is accessible to cheap health care despite the rising costs of health care. Wal-Mart uses employee compensation based control mechanisms in alleviating possible employer and worker opportunism. This is based its findings that employer and worker do not participate in intense opportunism in the absence of controls implying that work place virtues and norms makes worker to work hard and employer to offer awards to this works in order to promote mutual benefit.

As a none-monetary reward system, it shows the company’s strength and hope for further development. In addition, the sense of community and culture is essential to Wal-Mart’s success since it is vital in the creation of wealth by the company, which in turn improves the competitiveness of the business and maximizes the value of creation of wealth to the community. With the growing public awareness and desire for socially responsible businesses, it is significant to note that Wal-Mart consider planning for more future none-monetary reward mechanism.

The company has established award system for its employees in that, employees get awards for their work such as cost reductions and profit maximization. The introduction of award system is aimed at enhancing performance under the correct and right conditions. ReferencesBustillo, M. (2011). Wal-Mart Tries to Recapture Mr. Sam’s Winning Formula. The Wall Street Journal, February 22. Finch, R. (2011, April 9). What is total rewards. WorldatWork. Retrieved February 18, 2013, from http://www.

worldatwork.org/waw/aboutus/html/aboutus-whatis.htmlKotler, P & Lee, N. (2004). Corporate social responsibility: Doing the most good for your Company and your cause. New York, NY: Wiley.