Problem Statement Wal-Mart - Essay Example

Wal-Mart Case Study   Problem Statement Wal-Mart is one of the largest retailers in the US and today the company enters international markets successfully. However, the company is criticized for its poor social responsibility policies, questionable employment policies, and the negative impact of Wal-Mart stores on local communities both in economic and environmental terms. In such a situation, Wal-Mart has to elaborate the new strategy of its business development to overcome existing challenges and, thus, facilitates its further international market expansion.Wal-Mart is one of the largest employers in the US, although the company has been criticized for its employment policies, female employees criticized the company for their under-compensation caused by the existing gender unequal treatment. Situational Analysis Customers of the company benefit from the low prices and variety of products which can be purchased in various branches nationwide (Terpstra, et al.138). However local communities suffer from a deterioration of the environment in areas where Wal-Mart stores are located, due to an increase of the vehicular flow. In addition, local communities suffer from the overall decline of local business activities in areas where Wal-Mart stores are located because smaller businesses cannot compete with one of the largest retailers in the history of US also the world. Suppliers cooperate effectively with the company but they have to always match its low cost strategy. Otherwise, Wal-Mart would choose other suppliers. Moreover, Wal-Mart tends to shift to large corporations as its major suppliers because they offer minimal prices of products and are capable of delivering homogeneous products nationwide. Hence competitors cannot outpace Wal-Mart as one of the largest retailers in the US. All these factors constitute the unique management of Wal-Mart as it has remained competitive and is gaining popularity across the world despite criticism. At the international level, Wal-Mart has a less significant impact compared to the US market. Nevertheless, the company has kept on growing and today Wal-Mart is one of the leading retailers not just in the US but also in the world. Moreover, if the company continues its aggressive international market expansion, Wal-Mart may become the world's leader, overpowering its major rivals, like Target or Carrefour. While entering international markets, such as China, Wal-Mart attempts to introduce its standards and organizational culture abroad to its overseas outlets to make them similar to those in the US and hence this will also facilitate the interaction of various outlets of the company worldwide. On the other hand, the company also focuses on the wide use of local suppliers along with large multinational corporations as its major suppliers in China. In such a way, Wal-Mart decreases costs and can maintain its low price strategy but, as in the case of China, as well as the other developing countries, Wal-Mart faces the problem with positioning as the lowest cost retailer. Nevertheless, Wal-Mart has managed to use the full potential of its brand and its recognition to attract customers in China and in other countries, where the company operates, even when it cannot implement its low price strategy to the fullest extent. Alternative Action In such a situation of mixed weaknesses, Wal-Mart’s goals should have focused on the elaboration of a socially responsible policy and sustainable business development because this is the most effective way of gaining the support of employees, local communities, the society, shareholders, and key stakeholders. At the moment, the public image of the company, especially in the US, is rather negative, especially amongst employees and customers. In such a situation, the company cannot ignore the deterioration of its brand image. Instead, Wal-Mart’s primary goal should be focused towards regaining its popularity and maintain a positive branding, and social responsibility and sustainability may help the company to regain its position in the US market and facilitate its further marketing expansion at the international level. At this point, it is worth mentioning that Wal-Mart has failed its social responsibility in the US as well as internationally. Employees of the company suffer from discrimination and unfair employment policies, while employment benefits are minimal. Moreover, overseas outlets of the company often neglect the basic human rights of employees, while the company saves costs by only matching local legal requirements which are consistently different from American employment norms and standards. In addition, the company pays little attention to the minimization of its negative impact on local communities. However, even if the negative environmental effects can be minimized somehow, the negative impact of Wal-Mart stores on local economies is irrevocable and new jobs created by the company does not compensate the loss of business opportunities in those communities, where Wal-Mart stores are located. In such a situation, the plausible solution to current problems the company has created is to shift toward environmental responsibility and sustainability. This new strategy will allow the company to regain the confidence of employees, who may start improving their work performance. Sustainability will enhance the brand image of the company and customers may change their attitude to Wal-Mart which is now perceived as an environmental polluter and livelihood predator in local communities. Decision It is important to note that Wal-Mart has the potential to enhance its marketing performance but the company has to overcome its current problems, such as poor employment relations and negative public image. In this regard, a move towards social responsibility and sustainable development can help the company to tackle its current main problems. It is also important for Wal-Mart to explore alternative cost reduction techniques and shift its reliance on lower wage rate option as this carries significant consequences on it in the long run. In its attempts to achieve great success in the global market, Wal-Mart need to train its personnel from diverse cultural backgrounds about its organization culture as this will boost their performance towards attainment of the set goals. Wal-Mart is likely to gain much in terms of employee performance and public image if it can improve on employee treatment and standard wage rate as this carries a significant risk of future failure on its part if rules and regulations are tightened. Review Questions (a)What remedial measures could Wal-Mart opt for to improve the working condition and benefits to the employees? Providing incentives like compensation for overtime, monthly leave and increased allowances would boost its employees working condition. (b)What relevant steps would help it Wal-Mart improve its overall employee performance China? Training the local recruits on the organization culture of Wal-Mart so that they act in line with the expected global standards Work cited Terpstra, Vern, Ravi Sarathy, and James Foley. International Marketing. Naperville, Ill.: Naper Publishing Group, 2012. Print. Read More