Sustainability Challenges in Merchandising Operations in Wal-Mart - Case Study Example

Name: Tutor: Course: Date: Wal-Mart China Question One Wal-Mart CEO Scott is right in stating there is no intrinsic contradiction between reducing the company’s ecological footprint while optimally carrying out its business practices. For instance the company has experienced tremendous success in the recent years owing to the position it has acquired in the international market. It is among the major retail stores that have been able to employ unique business activities and operations that include but are not limited to lower and affordable prices for goods and services as well as an inclusive logistics pattern. However, amidst all the success, the organization has experienced tremendous criticism owing to the labor practices and non-conformity to the market regulations. It has affected most of the retail stores particularly Wal-Mart China (Hopwood 4). Although it continues to offer the best prices and services for its products, its position on reducing the ecological footprint has been questioned. It is possible that instead of affecting the operations, sustainable practices will improve the organization’s success in the end. An additional example of the lack of contradiction is china where the company has designed objectives making the environment habitable and sustainable by ensuring that the concept is understood across the corporate arena. The first aspect of consideration in this case is the application of sustainable stores and operations that would minimize the costs and ensure maximization of profits. For instance, Wal-Mart China sought to outsource the third-party logistics, providers, retail stores and office spaces. Under the trade-offs theory, this concept is plausible since it reduces the input-cost benefits and ensures that the organization maintains a candid state throughout its operations. The connection between such changes and provision of services along lower price is minimal since the retail store will still maintain its clients. Furthermore, the possibility of pilfered energy is limited once energy saving is included in the strategy. An important illustration facilitating reduction of the company’s ecological footprint is sustainable practices that revolve around the system supply chain that includes the types of suppliers they deal with. A major step in achieving desirable results and maintaining or reducing the costs of operations would be accommodating business partners, shareholders and suppliers that share a similar goal. For instance, Wal-Mart China incorporated a unique feature in their structure by evaluating the types of suppliers in conjunction with their operation. The concept underlying this move revolved around the possibility that a review would reduce the costs and improve efficiency of the services offered. Therefore, CEO Scott was justified by highlighting that the costs and service delivery methods would not be affected by restructuring the operations to meet the sustainability requirements. A green supply chain such as inclusive logistics would imply a green business. The trade-off theory supports sustainable practices by reflecting on the importance of innovative communication that builds a positive business structure to support any initiatives created under the brand. A succinct communication process ensures that the link between internal processes with external suppliers progresses analogously to represent a successful organization. For instance, Wal-Mart China concentration on transparent communications SVN with the stakeholders sought to develop a unified vision that would motivate employees towards working for the success of the strategy. Such a concept may not interfere with the prices that are offered by Wal-Mart China. However, it may interfere with the operational costs in case the communication structure changes completely. Question Two Although different methods of approach regarding sustainability can be used considering the Chinese culture, it is likely that the organization employs a number of triple bottom line decisions in order to implement sustainable practices. Wal-Mart China may restructure their sale strategies to meet the cost-sensitive culture that has been created by the Chinese. In this case, they may establish an interdependent system that will benefit the organization as well as ensure that the consumers are not exploited. For instance, developing a pricing strategy that meets the necessary market requirements under business laws will enable the Chinese shoppers to purchase merchandise instead of looking around. Similarly, Wal-Mart China may make triple line bottom decisions by evaluating the consideration of confluence underlying the concept of value. The Chinese culture is highly accustomed to value as the major derivative of satisfaction. In this case, satisfied customers are likely to purchase more goods and services promoting the sustainable practices that have been imposed on reducing the input costs and operational incentives. Wal-Mart China may shape such prevalent norms by exploring their emergence through explore emerging through experimentation to gain a clear understanding of the factors that drive consumer satisfaction in China such as the purchase of lesser measure more regularly. Triple bottom line making decisions based on the environment often exploit the additional benefits that consumers may acquire from an organization. The case of Wal-Mart China is unique considering the jurisdiction of operation that is offered in terms of the location. It expands the vulnerability to increased construction expenses, implementation risks and financing challenges that eventually reflect on the prices of goods and services in the retail stores. Compared to the environmental conditions that were evident in the United States, the Chinese culture failed to provide an allowance for reduced prices. In this case, Wal-Mart China may invest more in green technology particularly construction material as well as use renewable and disposable elements during their operational procedures. It limits the amount of costs that are incurred in all processes therefore maintaining a significantly low implication on the prices of goods and services. Furthermore, the organization has the ability to leverage its goods and services through the World Trade Organization (WTO) that often offers limits on the conformity to restrictions such as store placement and location. Question Three The social and environmental approaches that are evident between the Chinese may frontier the ability of Wal-Mart to employ basic strategies. Furthermore, the scope of product selection warranted increased expansion considering high inclination towards seafood, electronics and textiles . However, the Chinese people culture is controlled by the availability of a social licensure. For instance, the local and central government agencies controlled most of the initiation and locations and required organizations to experience a lengthy application process. Similarly, such applications also created an anomaly since it opened up an avenue where agencies could exert more restrictions regarding the store count as well as the geographical positioning. In this case, Wal-Mart China may align its applications to foster environmental sustainability by becoming an advocator to the importance of Chinese policing and regulatory culture. It may also venture into community-based programs such as insurance savings to assist in the developmental projects that are being carried out in China. The company should incorporate a recycle centre particularly directed at the mercury bulbs and batteries. Sustainability challenges were experienced in the merchandizing operations where all elements were required to be evaluated. In bid to diversify its scope of product differentiation and supply chain, Wal-Mart China experienced constant legal and market-based issues. For instance, Wal-Mart China could not gain authorization access for licensing on imports and exports used domestically. Similarly, Chinese suppliers had limited knowledge and experience working with foreign market. Such factors affected with the level of time that was placed in interacting with suppliers and manufacturers. Working with vendors over long periods limited the ability of the organization to meet deadlines and attract more consumers. It is different from global Wal-Mart since it is considered as a long-term investment. As vendors make the necessary changes towards compliance, Wal-Mart is able to restructure its merchandizing operations to fit into the diverse cultures. Wal-Mart China also experiences issues related to its distribution channel. Products that emerged from vendors, suppliers and going to consumers had to be integrated into the logistics system. However, transportation was a major issue that was caused by poor transport infrastructure and the requirements from the inter-DC movements. Similarly, it was possible to identify trucks that were returned from the distribution stores because of issues related to obsolescence and quality. Such factors were attributed to the severe inspections that were carried out on DSD shipments. It also incurred tremendous costs in the safe disposal of various products such as fluids. These factors are similar to the issues encountered by global Wal-Mart considering the costs involved. Question Four First recommendation is carrying out an organization-wide analysis of the existing Wal-Mart processes. Secondly this should be followed by an examination and amendment of the weaknesses. Improved management of the physical stores will help. Managers need to know the best way of operating all of the Wal-Mart China locations. The inventory flow for the company is equally problematic. This process needs to be improved since most products cannot reach the storefront in time. They can also reduce prices of goods about to expire allowing customer to gain affordable goods that are still safe for consumption and are compliant with Chinese production, manufacturing and sales laws. Thirdly, Wal-Mart China can also change the way they acquire their products. They can go lower in the supply chain and acquire means of production. In this way, they can acquire their own raw materials at a higher quality and lower price. Consequently, they can influence the type of products being stocked on their shelves. Grocery products are at the top of the list that should be improved within the operations. The organization can also incorporate data in the fresh food selection process. Data on purchasing trends, rate of restocking and durability of fresh products are all pertinent statistics that should be considered in making such decisions. The application of technology in the sustainable process will improve the diversion from the ecological footprint. For instance, improving communication will enable Wal-Mart China to identify compliant suppliers. Fourthly Wal- Mart should improve the employee training system to add new aspects that will enhance the productivity is necessary. Currently, Wal-Mart China employees form a significant part of people and are effective but they need to create an unforgettable experience with the customers through need to understanding about Wal-Mart’s China’s situation and options. This training can be done in shifts and during low peak seasons or even at night. Furthermore, retail leadership is important since it creates people who are able to match up to the challenge and meet the sustainability needs of the sector (Hopwood 12). Creating a strong relationship with the different stakeholders is a relatively affordable solution. Emotional connections such as visiting customers and issuing rewards are some examples. All these aspects will be captured in the customer experience vision. In this way, the whole process can be monitored and evaluated as the need arises. Read More