Strategic Analysis of Wal-Mart - Case Study Example

Case Study on Wal-Mart Wal-Mart is a giant competitor in the retail industry competition in a wide variety ofretail categories (Yang & Linowes, 2009). It is the biggest multinational company in the world possesses a low cost structure. Wal-Mart prospers despite market instabilities that other retail companies may face. However, threats are inevitable and so it faces weaknesses that they must deal with. The overall retail industry is currently experiencing challenges since the economic crisis in the US is rampant due to the fact that consumers spend less during weak economic times. Despite the fact that many retailers even close down during weak economic periods, Wal-Mart manages to maintain high profits due to huge volumes of sales it makes. It has succeeded due to its low cost strategy that attracts an array of consumers (Yang & Linowes, 2009). Significantly, this prompts it t enjoy cost advantage through controlling the market as the cost leaders. Despite its placement, it is therefore necessary to addresses the weaknesses and strengths Wal-Mart possess in order to maintain its position in market, which this case study will analyse the appropriate solutions to the weaknesses and enhancing its strengths. One major threat that Wal-Mart faces are varied pricey lawsuits filed against the company. Many employees and customers have complained of discrimination instances in the company. Due to these, the company has lost a lot of money as they pay off damages to those offended by the same. Approximately 815,000 employees of female gender and most often than not have experienced cases of unfair treatment (Reed, 2013). The unfairness is quite evident for they are sometimes underpaid compared to men whom they work together. It is quite ill-fated that the same females end up jobbing hard and for long to the extent of even surpassing the males but remain unrecognized (Reed, 2013). In addition, these women comprise the majority of employees but still do not get appear anywhere in assuming key positions meant for the enterprise’s managerial roles. As per 2010, most of its managers were men. Being the biggest retail company, this enterprise ought to set a pace for the smaller retail companies so that they embrace equality and not injustices. Evident from Duke Vs Wal-Mart case, 5 million females accused the enterprise of discrimination when it came to promotions as well as allocation of certain vital assignments (Reed, 2013). To add on, to date numerous people due to unfair experiences they have ever had are filling case suits with the intention of seeking justice. As a remedy to this crisis, it is necessary that the firm insist on conducting an internal investigation regarding these claims and others that remain unaddressed (Yang & Linowes, 2009). The investigation will enable them identify these claims and rectify them promptly instead of waiting for them to blow up. In addition, the firm ought to ensure that every employee or customer enjoy treatment with maximum respect as well as equality regardless of their race, social class, sex, or even region (Yang & Linowes, 2009). Being a leading retailer in the US, retailing companies may tend to imitate the strategy employed by Walmart in their services. They may imitate the domestic strategies as well as their outsourcing programs. This way, they will be able to knock down Walmart from the leading platform due to these predicaments that remain unresolved for long until respective victims decide to involve external forces. Therefore, it should continuously embrace latest technology and keep on improving its services. This way they will always be ahead of the competitors. Cases involving environmental carelessness against Wal-Mart are still present whereby in evading their augmenting should move towards ensuring that they conserve its immediate settings. This is because less than two percent of Walmart generates less energy from wind power and solar installations. Compared to other retailers, Wal-Mart is much far behind for other players in the same field are currently using 100% renewable energy. Conversely, its greenhouse emissions have been growing whereby between 2005 and 2009 the capacities augmented by 7 percent. This is quite evident in Asia whereby by 2015 predictions contend to double to produce approximately 13 million m3 tons. In addition, Wal-Mart relies on cheaply made goods with the intention of cutting costs. This poses adverse effects for it indicates that cheaply made goods have low quality, hence will wear off faster. If this is the case, the consumers will go to the stores to replace their goods more often which also increases rate of trash production resulting to doubling contributing the action of environmental degradation.There are various ways of caring the environment and the effective one will be embracing green technology. The company ought to introduce packaging materials that are recyclable or reusable. In addition, the management should ensure appropriate means of waste disposal for this way; the company will prevent heightened incidences of destroying environment. Wal-Mart needs to serve the community around it in order to prosper with less resistance. This is by ensuring that some of the profits it acquires go back to the community, which is only achievable in sponsoring charity events, scholarships as well as participating in other community initiatives (Yang & Linowes, 2009). Consequently, immediate communities to their operating enterprises will embrace the firm positively. Hence, manage to overcome any resistance they may face if it anticipates to expand own services both in smaller towns and more strategic locations. The firm can also opt to find other strategies in order to do well in foreign markets. They can form joint ventures with foreign corporations or use the foreign companies as a means of entering the new markets. Global expansion is quite beneficial to Walmart for it results to creation of profit hubs in the receiving states. It should ensure that they acquire more market shares in the developing countries, which have already established operation bases. This is quite beneficial compared to focusing to states that they have already born strong establishments and enjoying utter denomination. Another advantage when it joins with other corporations is minimization of incurring loss of resources in case the venture does not pick up well at the onset. Wal-Mart should first conduct a study in an international market first before investing. They should understand demographic characteristics of potential consumers in addition to those people’s preferences and financial positions. This way, they will be able to identify stores to invest in and decide to develop speciality bases to evade competition from the already existing players in those locations. Understanding the culture of any given local community is an essential aspect whereby once it Wal-Mart has identified all these will not only be successful but dominate the market within a very short duration. This is because they are aware of what the consumer wants and when instead of operation blindly. Argentina and Singapore comprises the potential destinations to Wal-Mart’s future expansions. This is because presently it has fewer stores in Argentina and they should increase its stores as well as in other developing states because operating in these regions has proven to be more profitable (Yang & Linowes, 2009). Studies reveal operating in these regions has been source of revenue for Wal-Mart especially when competition is tough in their home markets and the domestic companies are not resulting to enough profits. The firm should also result to venturing into new markets such as Singapore as well as other Arabian states. A new store usually creates immense attention thus will have huge sales’ volume during the first months or years. Singapore is the second in the world as the city that presents best investments opportunities. The Singaporean regime has less corruption cases, hence availing favourable incentives to foreign players. These incentives will be favourable to Wal-Mart given that they will invest at allow costs and enjoy reduced land rates. Moreover, they will be able to obtain cheap and skilled labour, which is quite an advantage as well. The number of Green rated factories for this retailer has been decreasing in the past years prompting it to blame the shift on the increasing standards put in place for factories. The policy to increase standards was issued in 2004 whereby since then factories have been cautioned to improve their practices (Bradford et al. 2007). There was reporting of a number of violations over the past years by certain workers contending of unpaid remunerations in all hours they have worked for. This prompted Wal-Mart face severe accusations of using double books claimed to be a scheme of trying to hide exact hours. This was wrong on the part of management, the suppliers, and other stakeholders who recognized that they were violating the labor laws well as rights of the workers. To ensure that the workers are safe without risk or violations, the firm ought to ensure that the have well lit working areas, well-maintained restroom facilities as well as sufficient cafeteria capacity (Bradford et al. 2007). It is necessary to note that Walmart has managed to eliminate 80% of the wastes that could go to landfills from their operations in California. Plastic use has also declined by 21% globally implying that the firm has embraced significant step doing away with non-biodegradable matter. In the case of energy use and they have also taken a step by changing GHGs, in regulation consumption by respective trucks. They currently use trucks that emit less harmful gases. Following all the above suggestions, Wal-Mart can effectively sustain its positions as the biggest retailing company and will receive support from the community and government. References Bradford, G., Henkle, D., Wittman, L., Brown, D., Manubens, M., Uricioli, D., Martin, R., Kalamanathan, R. (2007). A research report conducted by the International Labor Rights Forum (ILRF). Retrieved from on July 24, 2014 from Read More