Strategic Marketing of Wal Mart - Case Study Example

Marketing Table of Contents Wal-Mart’s goals and objectives 3 SWOT Analysis 5 Strengths 5 Weaknesses 5 Opportunities 6 Threats 6 Strategic marketing 6 Wal-Mart Marketing mix 7 Product 8 Price 8 Place 8 Promotion 9 Conclusion 9 Introduction Recently, organizations have established a system of sharing their mission statement which is to be applied across a strategic framework. This is important as it enables organizations achieve their goals and objectives and also enables organization to have a better position in themarket. Nelson (2009) describes that identifying and communicating company’s mission statement, vision, goals and plans engages employees therefore facilitating future accomplishments. This study shows Wal-Mart, which is a major hypermarket in U.S and how it tracks customer preferences, target market and its positioning strategies. It also shows how the company connects it strategies to achieve effectiveness. According to Sandra and Roy (1997) the importance of having a vision made Sam Walton come up with a discount store early in the 1950s. His idea was to open a discount store with wholesale margins on all products, one that would provide easy shopping and a friendly customer service. The critical factor of the stores was to be introduced to small towns in order to improve low income earners to save more. There were three basic principles which include providing customers with clean and friendly environment, partnering with various associates and maintaining community commitment. Wal-Mart is an American public multinational company and in 2010 it was ranked as the world’s largest company in revenue production. Charles (2006) states the company’s mission is “Giving ordinary people a chance to purchase same goods as rich people.” The company vision is “To become a leader in retailing worldwide.” The company was founded in 1962 also aims at helping people to save money in order to improve their living standard. Wal-Mart also is said to be the largest private employer and largest grocery retailer. Sandra and Roy (1997) shows the company generates about 50 percent of sales from the grocery business and has therefore focused in opening more retail warehouses for example it owns about 8,500 stores which are located in more than 15 countries. Sandra and Roy (1997) shows that Wal-Mart Company operates with a different name in various countries for example in Mexico it uses Walmex, in UK it uses Asda and in India it uses Best price. Wal-Mart Company has also developed various places for example through job creation. It aims at creating about 10,000 jobs in Chicago by 2015. This plan was developed in order to promote community development and to enable more people to improve their life. It also advocates for zero rate waste. According to Charles (2006) Wal-Mart Company has eliminated about 80 percent of waste for example in California it has promoted environmental care. The company has also donated about 5 million dollars for helping the victims of the Japan’s earthquake and tsunami. It has also partnered with Humana Medicare in order to provide savings on premiums and cost shares. Wal-Mart’s mission is to enhance and integrate supplier diversity programs where it will be categorised in procurement practices. These practices advocate for minority people in the society especially enabling women to open their own businesses. Some of the ingredients that have contributed to the success of Wal-Mart include the strengths and virtues of the company’s founder. This is due to his overriding vision and unchanging values. He also had the courage to take several business risks and strength in motivating and inspiring employees and partners. Wal-Mart’s goals and objectives The company believes in driving a sustainable business through diversity programs that build both qualitative and quantitative components which assist in achieving diversity goals. Pallavi (2007) describes that Wal-Mart aims at increasing its sales volume through offering friendly prices to its clients. This has enabled the company be associated with low prices and has improved the company’s image. The company therefore aims at ensuring that employees participate in attaining these goals. A culture of perfection has also been cultivated where every one aims at being on top. The major business objective of the company is ensuring that sales volumes are always increasing. The company also ensures that its growth rate is not stable but increasing. The other goal is to introduce ways of sustaining company’s competitive advantage for example through developed promotions. According to Nelson (2009) some of the factors that have contributed to the success of Wal-Mart over the past years include great strategy, superb strategy implementation and execution and great leadership. However the major factor is its great strategy for example the company’s international strategy is to remain local in terms of the process of offering goods, the use of local suppliers and its way of operation. The company’s standard of operation has also contributed to its success for example by responding to local communities and cultures. The company also maintains the needs and preferences of the local communities and suppliers. Wal-Mart aims at nurturing a culture that thrives on pleasing customers, hard work and constant improvement. The company is guided by a culture of ambition, capability and momentum. The company for example has been named as the ‘retailer of the century’ and as ‘the most respected in the world’ these titles has improved the company’s image and allows every one in the group to maintain the company’s culture. The core element of the company is to provide a wide assortment of products to its customers and at affordable prices. The culture of the company is providing a convenient place for trade which is a one stop shopping experience. There are four core values that underpin the management of Wal-Mart one is treating employees as partner where they share both the good and bad aspects of the company. This value has been employed by the company for example by referring to all employees as associates which denotes partner-like relationship. The company also values building for the future rather than for immediate gains. This is achieved by studying the changing concepts in the retailing industry and being ready to implement new ideas. The company also recognizes that the road to success includes falling and that this is a learning experience. They take falling as a corporate defect that can be corrected. This attitude enables the business grow morally and advance. SWOT Analysis Strengths Wal-mart has been a powerful retail brand and therefore has a good reputation for its value for money. Its convenience and the provision for a wide range of products have contributed to its strengths in the market. Charles (2006) puts it that Wal-Mart has also grown substantially over the recent years therefore has experienced global expansion. The company has a core competence which involves the use of improved information technology that supports international logistics systems for example the company carries out a market research that enable the company to see hoe the products perform countrywide and store by store. The improved technology is also necessary as it supports the company’s efficient procurement. The other strength that enables the company to survive in the competitive market is having a focused strategy for human resource management and development. The major key factor to Wal-Mart business is people where the company invests time and money in training, development and in retaining employees. Weaknesses As the World’s largest grocery retailer and despite the advantages its offers to its customers and the economy, Wal-Mart is weak at certain areas as a result of its huge span of control. Since the Company sells its products across various sectors such as clothing, food and stationary it becomes flexible to its more focused competitors. Though the company is global, it has presence in few countries worldwide and this contributed to its weaker side. Opportunities Some of the opportunities that has enabled the company to position itself in the retail market include taking over, merging with companies and forming strategic alliances with global retailers for example in Europe and China region. The stores are available in small number of countries and therefore there is an opportunity of future business expansion to other consumer markets. The availability of new locations offers opportunities for exploitation of market development where the company diversifies in large centres and malls. Threats Being the market leader means that you are the target of competition both locally and globally and also a global retailer is exposed to various political issues the operate in different countries. These factors include the threats the company faces while trying to market and position its stores globally. The intense price competition which results from reduced cost of production and manufacturing cost is also a threat to the company. Strategic marketing Much of Wal-Mart’s success has been attributed to its stockless warehouse and the use of Just in Time (JIT) distribution system. This systems works effectively as goods delivered are picked for reshipment and later sent to the stores. Charles (2006) shows Wal- Mart also enjoys economies of scale by purchasing full truckloads from various suppliers therefore gaining about 3 percent cost advantage over other competitors. The goal of the company is to give customers the best value and therefore customers trust the company for its lower prices and for the best selection of quality items relevant to their needs and provision of the most convenient shopping experience. Wal-Mart also attracts its customers by offering unbeatable prices and exciting surprises which builds loyalty between the company and its customers. Every business is analyzed by the factors that affect its functions and these factors are attributed for the success or failure of the business. In light of this, certain techniques are considered to contribute to improved competition in the market. These include customer orientation and coordinated marketing and profitability. In market penetration, Wal-mart focuses on its market and the products its offers to the public. It also has good information on competitors and customers needs. Wal-Mart Marketing mix Though Wal-Mart is the price leader, the stores locations make it convenient to its customers. This is a strong marketing mix and other retailers may compete with the company by increasing their number of stores but this does not compare to the low price strategy used by Wal-Mart. Product According to Pallavi (2007) this is a top priority in the marketing mix for example companies selling real innovative products attracts more customers into their stores. The company host products such as electronics, music, furniture, grocery and many more according to the needs of its customers. There is also a huge facility of online shopping as well as provision of safe shipping. The company uses a reliable and warranted system of shopping. The company has taken initiatives for food value and the use of environment friendly technologies. Price Wal-mart does not produce any brand but is an exhibitor and therefore its huge network globally is as a result of discount packages that are attractive and tempting to its customers. It is an economic force as it runs the pricing policy where it provides low rates which are not available in any other store. The universal barcode is also the bench mark of the company and a major achievement of the company as it provided power shift from manufacturers to retailers. Pallavi (2007) describes that the prices offered by Wal-Mart are as low as 15 percent that of the local market which include that of electronics and technological market sales. Place Wal-mart is divided in three divisions which include Sam’s Club, Wal-Mart Stores U.S and Wal-Mart international as well as other outlets that operate in different names such as in Mexico, Japan, Canada, China and many more. Its huge networks covering about 197,000 square feet enable the company to effectively market its products world wide (Nelson, 2009). Promotion Advertising is important in marketing mix as people have to know the kind of products offered. It is therefore necessary for companies to find an effective way of advertising for example by conducting little market research and learning from big market sellers. Wal-Mart advertises its goods and services through its official website or through ‘The Wal-Mart Timeline’ which is published on walmartfacts.com. Conclusion Wal-Mart Company has been driven by improved technologies which have enabled the company to introduce new service delivery systems. The second business objective is developing creativity and innovation. The third objective is to maintain market positions and developing new techniques of attracting potential customers. The company is valued as a strategic community partner due to its mission of enabling people to save money to better their lives. The company also aims at maintaining the aspect of availability. This is by opening series of stores in different locations of one country. This improves convenience and company’s image and has therefore contributed to the reasons why the company is doing very well in the industry. References Charles, F. (2006). The Wal-Mart effect: How the world's most powerful company really works--and how it's transforming the American economy. New York: Cengage Learning Inc. Pallavi, G. (2007). Wal-Mart goes abroad for growth. New York: The McGraw-Hill Companies. Sandra, V. & Roy, V. (1997). Wal-Mart: A History of Sam Walton's retail phenomenon. Twayne's evolution of modern business series. California: Springer. Nelson, L. (2009). The retail revolution: How Wal-Mart created a brave new world of business. New Delhi: Universal Publishers. Read More