Wal-Marts Competitor Environment - Assignment Example

? Wal-Mart: Strategic Management Activities and Strategic Competitiveness (Add (Add (Add Introduction Wal-Mart isthe public corporation chosen for this assignment. It is a multinational corporation operating in the retail industry, headquartered at Bentonville in the United States. This paper will analyze Wal-Mart’s strategic management activities and strategic competitiveness by answering the given questions. Globalization and Technology Globalization and technological developments over the last few decades played a notable role in making Walmart the largest retailer in the world. As Vijaya (2010) points out, globalization enhanced cross border transaction of money, labor, ideas, and cultures; and as a result, Wal-Mart could take advantages of cheap labor and raw material available in overseas countries. Furthermore, globalization benefited the firm to strengthen its workforce by recruiting expertise from around the world. Naturally, availability of cost effective expertise, labor, and raw materials assisted Wal-Mart to increase its productivity by reducing total production costs as well as operating costs. Thus, economical production process enabled the company to offer ‘low prices’, which was the major factor contributed to the organization’s rapid market growth. Globalization also fueled export and import activities and hence propelled circulation of money. Another major impact of globalization is that this process significantly improved international relations and increased interdependence among global nations. Hence, the company could easily enter overseas markets and utilize their resources. Similarly, technological advancements also played its role in making Wal-Mart the world’s largest public corporation by revenue. Technological improvements have notably assisted the company to cut down the number of employees and thereby reduce its total expenditure. It must be noted that today the company generates a notable portion of its sales revenues from internet. Internet has also benefited the organization to improve its operational efficiency. Finally, technological changes have added value to Wal-Mart research and development activities, which in turn assist the company to keep in pace with the changing market trends. Strategic Competitiveness While analyzing Wal-Mart using the Industrial/Organizational model of above average returns, it seems that the corporate could achieve above average returns in many ways. Firstly, the organization has a potential external environment. It is obvious that since Wal-Mart has global presence, it can effectively spread its risk factors and business losses. In addition, it operates under retail industry which is the world’s largest market. While evaluating Wal-Mart’s competitor environment, it is clear that the firm is the industry leader and hence it has an edge over its competitors. Undoubtedly, retail industry’s structural characteristics, including supremacy to discount stores and low cost marketers, would assist Wal-Mart to earn above average returns. The organization follows a low price strategy. Obviously, Wal-Mart has adequate resources such as potential workforce, skilled personnel, and technologically improved production facilities to execute its low price strategy well (Walmart, 2012). The company’s experienced strategic management team is capable of implementing its operational strategies effectively. Unlike the above model, the resource based model of above average returns uses an internal perspective to explain a firm’s strategic competitiveness. It is obvious that Wal-Mart has numerous potential sources including finance, human capital, and materials. In addition, the firm has the capability to use an integrated set of various resources to perform a particular task. This capability greatly benefits the organization to economically and efficiently utilize its various resources. The low cost strategy, good market reputation, and diversified product portfolio provide the firm a range of competitive advantages over its market rivals. As discussed earlier, advantages of operating under retail industry also contribute to the firm’s long term sustainability. These competitive abilities would greatly assist Wal-Mart to frame and implement effective strategies. Hence, the resource based model indicates that the organization could earn above average returns on the strength of its resources, capabilities, and competitive advantages. Vision and Mission Statements Wal-Mart’s vision statement is “to become the worldwide leader in retailing”. This vision statement clearly points out Wal-Mart’s ultimate business objective which the firm has already achieved. When a company sets an extremely big business objective, it would foster employees and other key personnel to effectively contribute their part to the goal accomplishment. Evidently, this type of an inspirational vision statement may stimulate Wal-Mart employees to work hard to fulfill the vision as fast as possible. Admittedly, Wal-Mart’s vision statement has played a significant role in placing the firm on the top of the world’s retail industry within a relatively shorter span of time. “We save people money so they can live better” is the mission statement of Wal-Mart (As cited in Smith, 2012). The mission statement directly reflects the corporation’s fundamental business strategy (low price strategy). As Smith (2012) comments, an individual may come to think that the company is greatly concerned about social welfare. Moreover, this statement may influence an average customer to think about the financial benefits he/she would obtain from purchasing Wal-Mart products. Therefore, the firm’s mission statement has inevitably contributed to its overall corporate success. Effects of Stakeholder Groups Evidences suggest that Wal-Mart’s different stakeholder groups significantly impact the overall success of this organization. Since the company attractively pays its employees and offers extensive incentive programs for them, Wal-Mart employees take efforts to provide customers with good shopping experiences. The firm’s employees specifically try to maintain customer relations, which is the key tool of customer retention. In addition, Wal-Mart employees participate in community volunteering programs and such initiatives assist the organization to obtain good market stature. In short, employees have greatly contributed to the firm’s success. Similarly, stockholders aid the organization to raise funds in times of unexpected contingencies. The strength of stockholder groups makes Wal-Mart one of the biggest organizations in the world in terms of capital resource capabilities. Undoubtedly, huge financial resources have assisted the organization to meet its developmental needs on time. Similarly, other stakeholders including creditors, bankers, and other financial institutions provide financial assistance to the corporation on the strength of its well market reputation. Finally, the company has huge and potential group of loyal customers worldwide; and they help the firm to generate large volume of sales without much promotional effort. Conclusion From the above discussion, it is obvious that globalization and technological advancements have aided Wal-Mart to spread its business worldwide. The industrial/organization model and resource based model indicate that the company has numerous competitive strengths to earn above average returns. Finally, Wal-Mart’s vision statement, mission statement, and different stakeholder groups have significantly influenced the company’s corporate success. References Smith, C. (2012). Can an organization have more than one strategy?. Chron.com. Retrieved from http://smallbusiness.chron.com/can-organization-one-strategy-30749.html Vijaya. (2010). Wal-Mart and globalization. Financial Politics, Retrieved from http://financialpolitics.net/2010/12/08/wal-mart-and-globalisation/ Walmart. (2012). Always low prices. Retrieved from http://www.walmart.com/cp/Always-Low-Prices/538350 Read More