Wal-Mart Strategic Plan - Case Study Example

Wal-Mart strategic plan s TABLE of CONTENTS 0 Executive Summary ................................................................................................. 1 2.0 Background ............................................................................................................. 2 2.1 Vision Statement ........................................................................................ 2 2.2 Mission Statement ..................................................................................... 2 2.3 Value Statement .......................................................................................... 2 3.0 Environmental Scan ................................................................................................. 3 3.1 Workforce Demographics ........................................................................... 3 3.2 Political and Governmental ........................................................................ 3 3.3 Economic, Social, and Cultural Developments .......................................... 3 4.0 Strategies ................................................................................................................ 4 4.1 Generic Strategy ........................................................................................ 4 4.2 Cost Leadership Strategy .......................................................................... 4 4.3 Differentiation Strategy ........................................................................... 4 4.4 Focus Strategy ........................................................................................... 4 4.5 Integrated Cost Leadership-Differentiation Strategy ............................... 4 5.0 Recommendations .................................................................................................. 5 6.0 Implementations ................................................................................................... 6 6.1 Objectives ………………………………………………………………. 6 6.2 Functional Tactics ………………………………………………………. 6 7.0 Action Items …………………………………………………………………….. 7 7.1 Critical Success Factors for Implementation ……………………………. 7 8.0 Risk Management Plan ………………………………………………………….. 8 8.1 Contingency Plans for Identified Risks ………………………………… 8 9.0 Conclusion ……………………………………………………………………… 9 10.0 References …………………………………………………………………….. 10 1.0 Executive Summary Wal-Mart is an American State company that runs a sequence of massive concession department stores, as well as a chain of warehouse units. The company operates multiple trade units across three commercial segments of retail stores all over the globe that provide a range of universal merchandise including electronics, apparel, groceries among other trivial appliances. Wal-Mart is the world’s leading retail supplier and grocery chain in terms of sales and just above half of the firm’s sales emanate from grocery items. Over 54% of the corporate’s units locations are in the Central, South America, and China. The company focuses on offering the lowermost rates through its business segments that collectively garnered over $408 billion in terms of profit in 2010. Since the introduction of Wal-Mart’s first international store in 1991, it has undergone a transformation from an American merchandising giant into an international one, leveraging a treasure of resources to expand operations tactically (Krieg, nd). Even though Wal-Mart must cope with formidable opponents, the corporate has successfully opened numerous stores across the world. It persistently continues to add international units through the purchase of foreign stores that simultaneously shrinks its competition and enhances its market dominance. Wal-Mart distinguishes itself through coupling its appreciation of political, legal, cultural and economic structures within target markets with its low rates and high-value approach to mass wholesale. Exploiting simultaneous strategic numerous thrusts, Wal-Mart has generated layers of competitive benefit to institute itself as the globe’s leading wholesaler. Focusing on the strategic enlargement, the company presently runs over 9,826 stores across twenty-eight economies, sanctioning it to apprehend global scale proficiencies through generating a corresponding and integrated network of independent units (Wal-Mart Investor, n.d.). Hence, Wal-Mart is now a reputable company internationally through developing numerous diverse internal perceptions, allocating aptitudes across independent units, and generating a responsive, integrative procedure. Leveraging its innovative low rates policy, as well as its sophisticated supply system, Wal-Mart manages to outpace its rivals. Nonetheless, the corporate’s growth policy also generates conflicts with cultural sensitivity in particular locations, employment strategies, and title recognition where Wal-Mart has formed associations. Because of its enormous size and purchasing power, Wal-Mart can obtain its merchandises at low rates, exchanging high procurement capacities for low costs while passing the investments onto its customers. Various merchants surrender to Wal-Mart’s pressure because they rely on the discount vendor for a most of their sales. Owing to Wal-Mart’s low rates, consumers settle to Wal-Mart stores throughout economic recessions. As a result, the firms similar store sales augmented by 3.5% during the toughest year. Nonetheless, as the global economy arises from downturn, stands to lose a lot as customers elect to purchase higher quality and more costly items. Always low rates, is the principal thing one thinks of when he/she thinks about one of the most prosperous corporations around the globe, Wal-Mart. For many years, they stand as a traditional company due to their routine low costs and diversity of products. Their mission declaration is saving publics’ money so that they may live better. They wisely chose their mission statement yet there is enormous of controversy when it comes to the global enterprise. 2.0 Background on Wal-Mart Wal-Mart attends to consumers and supporters more than 200 million times weekly through more than 10,130 selling units fewer than 69 different posters in 27 states. With the financial year, 2012 transactions of $443 billion, Wal-Mart hires 2.2 million associates globally. Wal-Mart’s inauguration happened in Rogers, Arkansas in the initial 1960’s by Sam Walton. Walton went all around the state investigating the needs of the consumers. When Sam Walton paw opened Wal-Mart, he constructed it on the basis of morality, respect, impartiality, and reliability. Wal-Mart’s transactions have garnered them a billion dollar returns in the preceding years (Casco, 2006b). Walton tried to build a culture that shared similar principles as he did. Out of his principles, he elected the three toughest that were well suitable for his store: Respect for persons, service to clients, and struggling for excellence. Wal-Mart’s accomplishment promotes numerous profits. Shareholders, customers, workers, and communities benefit from the firm’s success. The corporation grew to 276 units in 11 countries by the end of the decade. In 1983, the business opened its initial Sam’s Club Association store and in 1988 opened the first supercenter; currently the corporation’s dominant layout including a whole grocery in addition to universal merchandise. Wal-Mart became a transnational corporation in 1991 when it opened its foremost Sams Club nearby Mexico City. 2.1 Vision Statement The Vision Statement of the largest retailer in the world (Wal-Mart) is “Saving people money so they can live better”. The company always attempts to propose low rates and high-quality merchandises to its consumers. It has the motto “always low prices always” (Walmart.com, 2015). 2.2 Mission Statement The mission relative to Wal-marts is to offer quality products at always low rates and with comprehensive Customer service (Walmart.com, 2015). The company follows a shared objective with regards to all the undertakings they conduct. They are aware that the price is important to the customers, regardless of their country of origin. That is the sole reason they provide the best quality products at the lowest costs in all the unit stores, from school deliveries to domestic items and high-quality groceries. The Company’s mission is to uphold respect for the people and to struggle for success. With their inventive equipment, they strive to have products ranging from nutrition, music and others on hand each day (Walmart.com, 2015). Wal-Mart tries to ensure the finest, to be best and to offer quality and declaration to their clients. The point that Wal-Mart is a prosperous company is the importance of its workforces; they are the largest assets for the firm. Wal-Mart also considers savings that go past the costs in the stores. Their main mission is to offer goods and services to the consumers at low prices. For instance, they are working with the merchants to introduce more energy efficient products that could save the customers money for posterity. And because each Wal-Mart unit or Sams Club is intended to reflect the native community, the customers know they will find the lowermost charges around on the merchandises that match their way of life. Saving money is a way of assisting the clients to live better. By providing the best conceivable prices on the commodities the customers want, they can support them afford something a little additional. Wal-Mart also appreciates opportunities to assist people live better outside the confines of the units and Sams Club locations. Through working hand in hand with the communities and merchants, Wal-Mart can stretch beyond just the consumers to improve the lives of persons around the world. 2.3 Value Statement Values are the principles that design the entire corporate practices. Typical values hold diverse departments of the organization together. Activities such as marketing, human resource, finance are the examples of the activities within a firm that binds the departments. With regards to Wal-Mart, the cohesiveness and the spirit that exists with regards to their vision and mission holds the various departments within the company together. Values such as honesty, integrity, hard work and responsiveness are the few that associate with the enterprise (Walmart.com, 2015). As much as they are inventions of the founder, the employees and all the stakeholders in the enterprise still adhere to them, thus making the principles a standard value amid the diverse departments. Values control the strategic administrative tactics that characterize the orientation of the corporation. Values clarify the objectives that an organization desires to achieve in its future. They similarly determine a particular conduct of the organization that guides the development of specific strategies. 3.0 Environmental Scan 3.1 Educational demographics and programs: The company seeks for employees that have a minimum of a high school degree and are considering going to college and excel their future. The firm is supportive. The workers attend school through flexible hours to simplify for them to go school. Also, they must be outgoing and enthusiastic to go an extra mile to please the customers. Most significantly, they have to put a smile on their face and look personable at all time. 3.2 Workforce Demographics Wal-Mart offers equal employment prospects with a passive environment. There are also benefits and permanent employment. Locality is an enormous part of the demographic because their location has to demonstrate both customer and market potential. It provides the firm a chance to use it for a market evaluation and marketing. 3.3 Political and Governmental Wal-Mart is an Anti-Corruption corporation. They believe in impartial, free, and open markets, as well as promoting a decent government. They do not tolerate, allow, or participate in bribery, corruption, or immoral conduct of any sort. The moment one tries to exploit of the firm he/she risks losing employment or punishment for the sinful actions. On the bright side, they always look for people who have the determination to work and are enthusiastic. All employees they hire must be suitable to work in the United States must be 16 years of age with school certificate. 3.4 Economic, Social, and Cultural Developments A social tendency can be growing to other countries and make the corporation known globally. Cultural trends are complicated to undertake since each nation has its principles, and there is a possibility of selling something that they may not approve. 4.0 Strategies 4.1 Generic Strategy for the Organization Wal-Mart Stores Inc. appeal in the wholesale industry is determinant of its productivity. Although a particular industry might have below-average productivity, a business, which is optimally situated, has the aptitude of generating greater profits, and that is where the generic strategy comes in. There are four generic strategies that are appropriate to Wal-Mart Stores Inc. to permit it realizes its development. The four generic strategies in this instance are price leadership, differentiation, focus and integrated cost leadership-differentiation generic strategies. 4.2 Cost Leadership Strategy For Wal-Mart Stores Inc. to exercise cost leadership, it ought to contest for great consumer numbers through valuing. In this instance, cost leadership will operate well when goods and services in the company are regular (Aras & Crowther, 2012). By doing this, Wal-Mart will trade generic satisfactory products and at a lower cost. 4.3 Differentiation Strategy Differentiation strategy in this instance will permit Wal-Mart to offer its merchandise with unique qualities that are appreciated by its consumers. On the other hand, Wal-Mart Stores will have to institute a resourceful product development team and guarantee that it has a commercial reputation for being inventive. 4.4 Focus Strategy Execution of this strategy will need Wal-Mart to focus on particular product track, market role, geographical zone and specific consumers. The approach targets at serving a restricted group of clients in a more efficient way than its opponents. Implementing the customer focus strategy will nonetheless require the corporation to establish the course of its indicators (Tovstiga, 2013). The firm will also have to identify its exact customers. Splitting the key customers from the non-consumers will be significant for the company. On the other hand, the firm will have to identify its vital competitive market differentiator. Finally, Wal-Mart will have to differentiate some of its business fears. 4.5 Integrated Cost Leadership-Differentiation Strategy An association that incorporates strategies rather, than relying on a single generic approach will have the aptitude of acclimatizing and swiftly acquire new technologies. Embracing this generic approach will sanction Wal-Mart to have fewer unique products 5.0 Recommendation Similar to any other institution, Wal-Mart experiences numerous challenges including decrease in stock notwithstanding the fact that its panel of directors continually tries to raise surpluses and repurchasing shares in order to make the firm rise again. It is common that most institutions fail to achieve their preferred growth objectives and goals in productivity and revenues. Increasing achievement prospect in the organization largely depends on numerous aspects. One way in which Wal-Mart may increase its development is through strengthening the implementation infrastructure. The association also has to grow leaders at all stages hence both the administrative and the non-managerial (Wal-Mart Investor, n.d.). In addition, the company should establish a procedure that will help classify strategies with great success prospect. In this instance, there are three customer growth strategy, which can be used by the organization. The three growth policies on this occasion are; growing of the principal business, developing of adjacent chances and growing through sub-segmenting consumers (Aras & Crowther, 2012). The correct recommendation is that, senior executives in the Institute initiate the course by considering some of the development perspectives of the organization within the existing core business. On the other hand, it will also be significant to reflect opportunities that relate to the formation of innovative value suggestions particularly for underserved consumer groups. 6.0 Implementations 6.1 Objectives Until the year 2006 Wal-Mart was leading retailers in America. Everything was going smoothly for the company. However in 2006, the stock of the enterprise started witnessing fall in prices, and its sales volume too started declining (Roberts, 2012). The company had to take a change management strategy to turn things around. One of the main issues that had become the root of all problems was its core values of providing low prices always. Some of the strategies that the company had implemented into achieving these policies were called into question. One of the principal objectives of implementing the plan for change management was to revive the falling sales and get the company back on growth platform. 6.2 Functional Tactics One of the turnaround factors for Wal-Mart that is going to lift it out of the stage that it is currently in is to grow leaders at all stage. To grow leaders at all stage of the organizations among both the managerial and non-managerial workforce is to impart them adequate training. Since Wal-Mart is a large multinational organization so to give training at large scale will require proper planning. The plan to grow leaders at all stages of the organization should occur step by step (Wal-Mart Inc., 2006b). The plan should be first inducted as a training module for a single branch and then slowly spread into other branches at first in a country, then in a continent and then through all the continents. Before going into next step of the process, the company must first ensure that the first step has been successful with clear and definite results. The company by utilizing its innovative CRM tools has an enormous pile of customer data that it has collected over the years. A simple strategy would look at what has changed in the customers buying behavior. One of the key areas where Wal-Mart might be lacking as compared to its competitors is that in a drive to give its customers “Always low prices. Always” the company provides discriminatory wages to its employees. So the company suffers from low employee productivity as compared to many of its competitors (Casco, 2006b). Costco produced $21,805 in operating profit per hourly employee. This is compared to $11,615 at Sam’s Club (Casco, 2006a). Wal-Mart should invest more in their employees to achieve high sales and profitability growth and to bounce back. The company should for its growth and change management strategy should invest in the core areas so that the enterprise grows and can maintain its sales growth. 7.0 Action items 7.1 Critical Success Factors for Implementation The key success factors for any of the strategic plan to implement successfully are that the plan for the strategic should be communicated throughout the organization. For the strategic plan to be implemented successfully or for that matter any organization plan to be implemented successfully the employees of the organization should be taken into the process and made a part of the process (Aras & Crowther, 2012). The employees are the critical success factors for any organization plan to work successfully. Another area that must be looked into is the fact that the strategic plan is achievable and practical. Including employees in the change management plan helps the management to take feedback from the employees regarding change management. Another significant thing is that the workers employees should be talked to about the impending change process that the company is thinking about. Another area that should be looked after and which will provide to be a critical success factor for the plan is that the employees should be trained to assume leadership roles. Any change that the company undertakes is for better sales. Better sales come from better customer relations. Any change management process is incomplete without the customers knowing and approving the change. Therefore, the change should be communicated not only to the employees but the customers too. 8.0 Risk Management Plan For any change in management process, there exist certain risk factors that must be taken care of. In the case of this change management process, the challenges and risks that exist are regarding the non-acceptability of the change management process by the stakeholders involved within the company. For example, the various stakeholders that are involved with the business that is the employees’ internal management and most importantly the customers may not be motivated or may not be ready to accept the changes. If such a thing happens then, the total change management drive will be a failure (Pope, 2012). 8.1 Contingency Plans for Identified Risks In lieu of the above-stated risk, it is necessary that a contingency or back plan is made if in case the change management drives fails. If the model fails in one store, then changes can be made and then applied to other stores. For the design to work, all the employees and customers should be communicated about the plan at the first place to ensure that they accept the change management. 9.0 Conclusion Conclusively we have seen the transformation of such a small firm in its inception to a local retail giant and subsequently a global leading wholesale supplier. Regardless of the numerous challenges facing the company, the determination of its executive administration as well as the ordinary employees stand tall and helps the business navigate through the challenges. The company continually faces competition as a fundamental challenge; nonetheless, it has taken a strategic policy to out-compete its competitors through implementation of the always low price policy. The company has successfully integrated a network of independent units within itself. The firm can adhere to its objective values such as generating a responsive and integrative system for the benefit of the consumers. It has also maintained its key objective of the mission by using all the available tactics to identify, successfully serve and keep the customers. Hey, keep their clients through their routine low prices and diversity of products to meet consumer demands. The success of the entire corporation came through the wise research for the needs of the people done by Walton after the inauguration of the company. Wal-Mart then quickly spread all over the globe. With regards to the vision statement, “saving people money so that they can live better,” the company unlike other firms manages to maintain their low prices, as well as their quality products and services. In respect to its mission, the mission statement says it all. Wal-Mart’s mission is to provide quality products at relatively low costs and with comprehensive customer service. Values are the principles that design the entire corporate practices. Typical values hold diverse departments of the organization together. Activities such as marketing, human resource, finance are the examples of the activities within a firm that binds the departments. The company adheres to the regulations of the state while conducting its recruitment procedure. It also employs certified workers and supports them with their needs. The company ought to implement the four strategies in order to remain the market leader. The strategic plans are; Integrated Cost Leadership-Differentiation Strategy, Focus Strategy, Differentiation Strategy and Cost Leadership Strategy. The company ought to consider all the implementation and action plans in order to stay ahead in the retail industry. References Aras, G., & Crowther, D. (2012). Business strategy and sustainability. Bingley, U.K.: Emerald. Casco, W. F. (2006b). Decency Means More than Low Prices: A Comparison of Costco to Wal-Mart’s Sam’s Club. Krieg, K. (nd). Sam Walton: Founder of the Wal-Mart Empire. Pope, D., & Pope, J. (2012). When does Wal-Mart come to town always low housing prices? Always? Cambridge, Mass.: National Bureau of Economic Research. Roberts, B., & Berg, N. (2012). Wal-Mart critical insights and practical lessons from the worlds largest retailer. London: Koran Page. Strategic Planning and Finance Committee - Wal-Mart Investor (n.d.). Retrieved March 6, 2015, from http://stock.walmart.com/corporate-governance/strategic-planning-finance-committee Tovstiga, G. (2013). Strategy in practice: A practitioners guide to strategic thinking. Hoboken, NJ: John Wiley & Sons, Inc. Walmart.com,. (2015). Walmart. Retrieved 6 March 2015, from http://www Read More