Analytical Decisions at Walmart Stores - Case Study Example

Business Report Project an Analytical Decision Paper A case of Walmart Stores TABLE OF CONTENTS Executive summary 3 0 WALMART BACKGROUND 3 Important persons for Wal-Mart 4 Goals of Wal-Mart: 4 Companys Focus: 5 Products 5 Overview of Production Network: 8 Stock Price Index 9 The Neighborhood Market Concept 10 3.0 WALMART CRITICIZED FOR LOW WAGE PAY TO ITS EMPLOYEES 11 Walmart’s Earnings per Employee 14 Walmart Employee Reviews 14 4.0 GOOD EMPLOYMENT PERSONAL EVALUATION CRITERIA 16 Profiling 16 Client association 16 Community Service 16 Employee Responsibility 17 Future Prospects 17 Management 17 Career opportunities at Walmart 17 5.0 Conclusion 18 Executive summary Walmart, a Fortune 500 company, remains to be the world’s biggest retailer. In past few years Wal-Mart has strived to minimize its negative publicity arising from constant complaints on employee frustrations about wages and salaries. The big question remains; Is Walmart the best employment choice for an individual seeking to enter, build and progress a career in the company? The study acknowledges employee development in supply chain management practices of Walmart over the years. A brief of Walmart’s recent distribution, strategy and itemization authority development is reviewed. The study engraves a diverse collection of informational reports detailing financial stability which includes stock performance, employment benefits, employment opportunities and analysis the company has received over the recent years with regards to recruitment and employment of individuals in the firm. The study will also include a personal criteria used to determine the viability of the company as an equal job employer. 1.0 WALMART BACKGROUND Walton was born in 1918 near to Kingfisher, Oklahoma, US. After getting his graduation degree from the University of Missouri in 1940, Walton started working for the famous merchant, J C Penney. During his first job, Walton had shown all the qualities of a good, perfect and honest salesman. During his career, he demonstrated the importance of building loyalty among customers as well as employees. In the mid-1940s, Walton quit his job to set up his own retail store. He started with a store franchise with help from Ben Franklin in Newport, Arkansas (Cerda, Jessica, Douglas and Mathew 317). It was his first step towards retailing - offering significant discounts on product prices to expand volumes and increase overall profits. That gave rise to the name Walmart1. The business was successful and Walton soon acquired a second store within three years. The US-based Walmart was rated first in the international Fortune 500 list in the accounting year 2001-02 gaining revenues of $219.81 billion. Being among the largest retailer companies in the world, Walmart was highly ranked hence being considered as the largest retailing company. The company was much bigger than its opponents in the US such as Sears Roebuck, K-Mart, JC Penney and Nordstrom mixed (Cerda, Jessica, Douglas and Mathew 319) In 2002, Walmart promoted 3,500 discount stores, Sams Clubs and supermarkets in the US with 1,170 stores in all major countries across the world2. The company also took products on the Internet with the help of its webpage, walmart.com (Cerda, Jessica, Douglas and Mathew 322). Important persons for Wal-Mart i. Sam-Walton: He is the owner who created the core-supply chain. ii. David Glass: He enhanced his growth strategy through the use of technology iii. Lee-Scott: His corporate social responsibility was CSR. Goals of Wal-Mart: According to the Supply Chain Management Review, Wal-Mart has three ambitious goals, which are as follows: i. To be supplied 100 percent by renewable energy ii. To create zero waste iii. To sell products that sustain Wal-Mart "resources and the environment Companys Focus: The companys author, Sam Walton grew interests in improving sales, constantly minimizing costs, endorsing efficiency, circulation and logistics management systems and using innovative information technology (IT) tools (Collins 310) (Cerda, Jessica, Douglas and Mathew 330). According to examiners, Wal-Mart was able to conclude a management status in the distributer industry because of its adequate supply chain management tradition3. Captain Vernon L. Beatty, aide-de-camp to the captain, garrison Supply Center, Columbus, Ohio declared in a state function that, "Supply chain management is moving the legal items to the legal customer at the correct time by the most efficient means. No one move even better than Wal-Mart."( Drache, Daniel, Anne, and Yanick 300). Products Walmart showcases a cross platform products which satisfies the needs of the customers. The products are divided into specific categories as listed below: i. Electronics and Office Products ii. Movies, Music and Books iii. Home, Furniture and Patio iv. Home improvement v. Clothing, Shoes and Jewelry vi. Baby and Kids vii. Toys and video games viii. Food, households and pets ix. Health, Beauty and Pharmacy x. Sports, Fitness and Outdoors xi. Autos and Tires xii. Photos and Gifts xiii. Crafts and Party Supplies 2.0 WALMART’S INFORMATIONAL REPORT AND GROWTH POTENTIAL Figure 1 Wal-Mart Annual Sales growth Figure 2 Wal-Mart Share of US sales of Total US Retail Sales Figure 3 inventories Growth as of % of sales growth Overview of Production Network: Wal-Mart consists of Retail outlets with a main focus on the US discount stores due to their strategic positions and market demand. Almost 1478 stores are present in the states of USA. Wal-Marts total stock system framework has 90 scattering centers, with each holding particular merchandise. The existence of stockrooms proves Walmart’s ability to store inventory4. Being a major retail outlet, it has established central distribution centers therefore ensuring a constant market supply of commodities. However, Walmart faces limitations in its distribution and transport strategy. Some of the markets centers are not able to receive its daily supplies in time creating a deficit of commodities at any given time. Other than road transport, Walmart also uses the sea to ship its commodities to other outlets in the world. The inconsistencies marks the distribution chain with uncertainties on when the shipment would arrive to the central stores and which of the stores should be given priorities.5. Walmart store therefore considers these two variables of transport and distribution for examination to facilitate a stronger organizational structure along with outbound scattering to the stores cost of operation. Figure 4 profit Margins The whole analysis results that customer demand is met. The graphs summarize the demand and production capacity. The cost and benefit analysis highlights the production cost and supply of the products. As a result, the demands of the customers are met accordingly within the capacity (Fineman 275). Stock Price Index Walmart is trading at $71.66 buying and $72.56 selling with a change rate range of -0.02 – 0.03%. Its current stock price is averaged at $71.86 (Linkon 255). Figure 5 Annual Sales Growth Walmart’s Marketing Plan During product promotion, Walmart seeks to achieve the broader goals of reduction of costs, ensure compliance and create a flexible product line. The supercenters are declining in number owing to the fact that the rational consumers have a higher preference to smaller and more convenient stores as opposed to the large superstore centers (Linkon 296). The Neighborhood Market Concept Walmart has introduced a new marketing strategy referred to as the neighborhood market concept. The concept has seen the sales rate scale up the ladder to an impressive 5.6%. The chain store has therefore targeted the consumer making them find it convenient to locate products, thereby boosting sales ratios (Johansson 125) With 400 Neighborhood Markets and an overwhelming 3300 supercenters, Walmart is yet to maximize its output operations. The supercenters are gradually being out phased due to the introduction of the e-markets (Johansson 127). These are online platforms where customers prefer shopping items such as electronics and furniture. Walmart aims at locating the neighborhood market at every city for ease and convenience of the customers. This strategy is predicted to expand the sales margin and maintain it at the leading position among other Fortune 500 companies (Johansson 133). 3.0 WALMART CRITICIZED FOR LOW WAGE PAY TO ITS EMPLOYEES According to New York Times, Walmart remains to be America’s biggest private employer comprising of a work force of 1.3 million United States individuals. Walmart has been intermittent in its action following a scenario of protests for better pay that occurred in November 2013, outside their offices in Los Angeles as captured by the following caption: Walmart received criticism for their low wage pays. It therefore countered these protests by increasing their pays above the minimum wage that was stipulated by the federal government. However, various critics view the action to raise the minimum wage as a move to counter the economic forces that were derailing the company’s focus. It would be a bold step for the company if it had incorporated this action in their business strategy as opposed to behaving in an action-reaction manner6. During the 2007 fiscal year (this period was before the recession), a total revenue of $183,500 per employee was reported by Walmart and a profit of $5938. During the 2014 fiscal year, these figures have marked improvements by 18% and 22% respectively. The company’s performance was top notch with high remissions in sales and profits. The payroll remained rigid with Walmart’s stakeholders benefiting instead of its workers. Due to the company’s immense profit margins, majority of the workers have a guaranteed salary increment based on their years of service, expertise and qualifications. This shift is due to the rise of a firmer and competitive job market which is aligning and giving confidence to the workers to demand for more pay (Fineman 289). Issuing its commitment to its employees, the company guaranteed a minimum wage of $9 per hour to the low-level workers. This salary strategy will commence in spring. This therefore places the company at a better position as a preferred employer since its raise in salary is above the proposed $7.25 minimum wage that was proposed by the federal government. The company proposed to add value to the department manager position, generating a $13 minimum wage per hour during the 2015/2016 financial and budgetary year and $15 in 2016/2017 business year7. This offer creates a clear path to achievement and advancement for low-wage hourly workers. The company, through an announcement through its executives announced their intention to implement similar bumps to its affiliate company, Sam’s Clubs, with 500,000 workers expecting to receive salary and wage increments at a cost of $1 billion a year. Opinion Walmart needs to keep its employees satisfied and contended with their packages. The demand for a payroll and payment scheme is grave which should be in line with the annual sales and profits made by the company. The company needs to realize the importance of the labor force which has a relentless commitment to keep Walmart at the first position in the fortune 500. I believe that a motivated employee will never look at the side of their shoulders scouting for places with better employee offers. Walmart needs to capture and retain its employees through annual salary increments and huge reward packages to excelling employees. The resultant employee turnover will gradually increase as illustrated below Source: Self Walmart’s Earnings per Employee Since the recession, Walmart has recorded strong gains in the net income per employee Source: Bloomberg With an unemployment rate of 5.7% is different from one with a marked margin of 9.8%. Employers such as Walmart are seeking for qualified workers, who are difficult to find (Iskander 285). The workers who have been found are always jumping ship leading to a human resource gap due to factors such as delayed salary increments and other improvements. Besides pay, Walmart is going to revise its employee schedule policies to give room for work predictability schedules and time offs to tend to their personal issues. Walmart Employee Reviews According to indeed, employees were given a chance to give a five star ranking with regards to their opinions on how the company attributes fulfilled their satisfaction. The following results were obtained; Attribute Ranking Job Work / Life Balance Salary/ Benefits Job Security/ Advancements Management Job Culture Source: http://ca.indeed.com/cmp/Walmart/reviews A former employee remarks that working at Walmart was a great experience for the most part of his tenure. Working as a Stocking or Produce associate, he points out that the company maintains a unique and excellent family type setting where every employee was friendly to each other. However, he points out that the management was not the best in his opinion. Another employee who is currently working at the back office declares Walmart as the greatest team to work for. She points out that Walmart provides flexibility in the job description, the company offers paid vacations, there is excellent leadership especially the store manager and it also provides room for career advancement. The only con pointed out was on low pay (Walmart addressed this issue through salary increments across all levels with a marked rise over the minimum wage stipulated) A former sales floor associate based in Toronto remarks that Walmart is a fun and productive place to work in with varied learning experiences Through various reviews from current and former employees, it becomes evident that Walmart has its pros and cons as identified. Majority of the pros center around the values that are cherished by the company8. The company values individual advancement and growth. It provides a platform where employees can interact and work together as a way of increasing their knowledge base, experience and abilities. 4.0 GOOD EMPLOYMENT PERSONAL EVALUATION CRITERIA There are various factors and categories I have designed that would help in the determination as to whether Walmart is an adequate employer or not. Profiling i. Does the company have a clear vision? ii. Does the company uphold its values? iii. Does the company have a defined culture? Client association i. From client remarks, is their client relations reputable? ii. Does the company have a positive public image? Community Service i. Does the company have initiatives that cover their corporate social responsibility? ii. Is the company renowned in the community for its positive contribution? Employee Responsibility i. Does the company treasure and promote the advancement and growth of an employee? ii. Does the company promote career progression? iii. Are their instances of Career mobility? iv. Has the company been faced with human resource related complaints? v. Does the company promote life balance, for instance education and life? Future Prospects i. Is the company development oriented? ii. Is the company diversified in its operations? Management i. Is the management structure clearly defined? Marking Scheme Walmart has shown equal concern that has cut across the edges of my job viability score sheet. Based on the metrics derived from the score sheet, Walmart has a clear vision based on its diversified operations in the stores and clubs sector, corporate world, health care, technology, transport and logistics. With its declaration of the fact that they love what they do it is a streamlined company which owes its services to people and the public. In their corporate social responsibility the firm gave more than $1.3 billion worth of cash and in-kind as contributions to many countries in the world. Career opportunities at Walmart Walmart has divided its career structure based on its four key departments of operation. Under Stores and Clubs opportunities can be derived as either Hourly jobs or Management jobs. In healthcare, pharmacy, Care Clinic and Optometry become vivid career fields in which an individual would indulge in. The transportation and Logistics group sources for drivers and distribution center operators. The Corporate division carries a bulk of opportunities which are subject but not limited to the following fields: Accounting and finance, asset protection, aviation, business analytics and intelligence, communications and corporate affairs, technology, supply chain management, real estate and store planning, marketing, merchandizing, legal, engineering and global sourcing (Greenhouse 275). 5.0 Conclusion Several successful logistics components explain and highlighted that Wal-Mart has managed to perform consistently throughout their growth that can be adopted by smaller competitors. These fields therefore signify that Walmart is in the constant search to recruit talent which can adequately apply their experience abilities, knowledge and skills in the specified areas to remain top of the rank in the supply chain industry Works Cited Cerda, Jessica A., Douglas M. Stenstrom, and Mathew Curtis. "The Role of Type of Offense and Work Qualifications on Perceived Employability of Former Offenders." American Journal of Criminal Justice 40.2 (2015): 317-335. Collins, Denis. "Operational Best Practices in Business Ethics: A Practical and Systematic Benchmarking Tool." Business and Society Review 120.2 (2015): 303-327. Drache, Daniel, Anne LeMesurier, and Yanick Noiseux. "Non-Standard Employment, The Jobs Crisis and Precarity: A Report on the Structural Transformation of the World of Work." The Jobs Crisis and Precarity: A Report on the Structural Transformation of the World of Work (March 19, 2015) (2015). Fineman, Jonathan. "Vulnerable Subject at Work: A New Perspective on the Employment at-Will Debate, The." Sw. L. Rev. 43 (2013): 275. Greenhouse, Steven. "A part-time life, as hours shrink and shift." The New York Times 27 (2012). Linkon, Sherry. "Class Struggle at the Dinner Table: The American Way of Eating: Undercover at Walmart, Applebee’s, Farm Fields and the Dinner Table." New Labor Forum. Vol. 22. No. 1. SAGE Publications, 2013. Read More