Retail Product Management: Buying and Merchandising - Research Proposal Example

Management, Information Systems and Organizations (MISO) Introduction Many organizations have ventured into information technologies in order to increase the effectiveness of information and operation systems. However, many of these organizations have been unable to successfully integrate the technologies for enhanced sharing of knowledge and making effective decisions. The implementation plans put more emphasis on the role of technology and give less importance to the institution processes and the organizational structures. Many of these organizations fail not due to technology but because inadequate attention is paid to the issues that are to the organizational culture. The paper will explore management and information systems and their role in the organization success. A strategic plan, a control plan and implementation process will be structured for a case-study scenario organization. Description of Company Walmart started as a discount store in 1962 in Rogers, Ark. By the end of 1960s, the company had grown to 276 stores in 11 states. In 1988 it opened a supercenter that features a full grocery and general merchandise. In 1991, it became an international company. The purpose of the company is “Saving people money so they can live better” (Walmart n.d., p1). Saving people money refers to the offering of best quality merchandise at low prices in the Walmart stores. Living better comes in when the customer saves money. Assisting people live better lives is more than what they do; it is who they are (Walmart n.d., p1) Shareholder View The investors are becoming increasingly concerned with frequent executive compensation that appears to be inadequately connected with the creation of the shareholder value. The shareholders urge the Wal-Mart Stores, Inc. to adopt policies that can allow the shareholders to vote at each of the annual meeting on matters pertaining to advisory resolution (wikinvest n.d., p1). Walmart Corporate Policies There is a big concern on the policies that the company is adopting. The policies are quite old and are deemed old fashioned. Innovation in the company is slow and there is need for more innovative steps. There is need for the company to adopt policies that are up date and face out the older policies (Kasi 2011, p1). Overall Purpose The present overall purpose of the company is “Saving people money so they can live better” (Walmart n.d., p1). The purpose is a bit weak and needs to be improved. The company can include items such as the expectations of profitability and growth, and the ethical position of the business in its corporate mission (Business Resource Software, Inc. 2011, p1). Strategic Objectives Strategic objective is concerned with making the mission statement operational (Dess, Lumpkin and Taylor 2005, p1). The mission statement of Walmart is to assist people in saving money so that they can live better lives. Profitability The company can increase its profitability by innovation of more products and finding new ways of marketing their products and services. It is also imperative for the company to set its financial objectives in order to measure profitability. Market Share The market share objective should be in terms of the sales growth rate and sales volume. The main focus of the company should be to win additional market share and overtake any key competitor on customer service and product quality basis. Productivity A strategic employee recognition program can offer a cost-effective way of raising the employees’ morale and re-engaging the detached employees. The program can also assist the employees to concentrate on the core values of the organization and thus raise its productivity. Management/Employee Performance A performance appraisal approach can be adopted by the company and the procedure that can be followed is planning out the performance appraisal and assisting the employees plan out their performance appraisals. Technical Development and Innovation This includes adoption of policies and programs that center on innovation processes such as innovation of systems that can monitor the movement of goods within the company to avoid scenarios such as pilferage of goods. The staff should also be trained on how to use the recent information technology systems. Social and Public Responsibility Social and public responsibility is very vital for the company; Walmart has its own corporate social responsibility. The company can improve its corporate social responsibility image by making corporate responsibility relevant to the business and providing optimal information. Internal Performance Strengths Walmart is the largest employer network in the United States. A variety of products are provided under a single roof in majority of the states. Throughout the year, the company provides sales prices and this attracts majority of its customers. Walmart is, in the world, the largest retail store. The company has a well established information technology system that monitors the prices being offered in world market. The company’s divisions such as supercenter and SAM’s Club are a major attraction to different classes of customers. Weaknesses Although the company has a well established information technology, it lacks the expertise among its staff. The company focus is limited to two continents alone (Europe and America); the other continents share the remaining few stores. Its mission statement lacks some elements and thus it is not well established. Memberships to clubs such as SAM Club are very limited. The company is adopting policies that are outdated and very few innovation steps are being undertaken. The company is gender biased though it poses itself as a company with the largest revenue. Its products are sold in bulk in order to maintain a constant price and this is a possible threat to the company’s revenue (Kasi 2011, p1). External Environment Opportunities There are more opportunities for the company to expand its business to areas such as China, emerging markets and Europe. There are new and up to date strategies for the large and efficient supercenters. Opportunities still exist for Walmart to go on with the present strategy of the large supercenters. The decrease in the dollar value and the growing market for internet shopping are among the best opportunities for the company. Change in the market perception can greatly increase the sales. Threats There are competitors that are emerging with innovations that have not been adopted by Walmart. There is political involvement in the provision of products and that is set to affect the Walmart’s profits. The company’s policies are out date and there is a need to review them. The current strategy (constant price strategy) is not very correct for products that have high manufacturing costs. The employee union within the company proves to be a threat to the well being of the company. With such a union the chances of survival may prove very difficult. The company should desist from differentiating part time and full time employees (Kasi 2011, p1). Evaluate Alternative Strategies Alternative strategies are based on the determination of the probability and practicality of those alternative strategies. Other characteristics accessed are risks, resource needs and environmental uncertainties (Linda 2009, p1). The company has been using outdated policies and it is important for the company to adopt up to date policies. The company can diversify its services in the supercenter and the SAM’s club because these two divisions have proven to be helpful to the company. The company should also diversify its international market and venture into other potential continents such as Africa and Asia. There are emerging strategies in the information technology and the company should create the environment for the adoption and implementation of these strategies. Strategic Plan The plan will entail the adoption, implementation and assessment of the following items. The mission statement of Walmart should be defined or redefined. The vision statement follows the mission statement and it will explain where Walmart is heading. A SWOT analysis will be done to assess the strengths and weaknesses, and opportunities and threats that are essential to the company. The strategic objectives mentioned will be adopted and implemented; the strategic objectives connect the mission to the vision of the company. It will involve performing major activities that will make the achievement of the vision a reality (Olsen 2006, p37). The strategic objectives can be broken down into short term initiatives. They assist in the realization of the overall strategic objective. The difference in the two is that strategic objectives are long term and the other short term. An action will be created to assist in the implementation of the Walmart’s goals. In order to effectively manage and measure the strategic plan, a scorecard must be created in order to know if Walmart is achieving its goals. A financial statement is required to determine whether the strategic plan is making any sense (Olsen 2006, p37). The final thing will be evaluation of alternative strategies. Key Targets to Divisions/Departments There are supercenters within Walmart; these supercenters have been the major attraction for most of the consumers. Such centers can be improved to cater for more customers and more products and service. Walmart has to adopt policies and programs that will transform these supercenters into big business icons. SAM’s club is another division within Walmart; recent information suggests that SAM’s club has attracted most of the Walmart’s customers. Proper policies also need to be implemented to see the success of this club. Other departments that may be targeted are the human resource department and the executive office of the company. Operating/Tactical Plans The strategic plan will be broken down into short term, specific plans and actions (morebusiness.com 2009, p1). The tactical plan will cover the entire period of the implementation of the strategic plan. An assessment of the strategic plan is required in order to carefully to divide it into manageable parts. Timeframe of the strategic plan should also be taken into consideration. It is imperative to note that some of the sections within the strategic plan will take longer than the others. Balance and harmony of these sections should be sustained. In a nutshell, the tactical plans make up the strategic plan. Control Plan Inventory Control: Description One of the most important retail practices that Walmart must undertake to entrench in their standardized routines is a comprehensive inventory control. Inventory control is a system adopted by an organization that deals in commodities, where measures are put in place to account for proper handling. Accountability measures are streamlined to ensure quality and quantity are not compromised at any handling point. Destruction and pilferage are avoided through a comprehensive inventory control, while ordering and delivery qualities are monitored and maintained within adequate levels. Internal control standards that Walmart needs to undertake in light of these circumstances include a host of tasks that facilitate ordering, reception, holding or storage and delivering. Tasks List On reducing order of priority, the tasks will be implemented as follows; 1. Market research (6 months) 2. Staff training (1 week) 3. Accountability control (1 month) 4. Inventory valuation (3 months) 5. Ordering control (3 months) Description of Control Effectiveness To come up with a comprehensive plan for Walmart with regard to inventory control, a framework will be formulated to detail stocking procedures that will facilitate continuity of operations at a minimized cost. A new layout will be proposed as outlined above and detailed below. Critical path of planning is usually generated from identification of the most preferable options in a myriad of several others (Baker 2004, p1). In the technique, the length of implementation of an entire project or strategy is determined using a diagrammatical representation of activities that the management has access to. In the case of a more competitive environment, managers have their options base considerably widened. The most appropriate alternative combination of activities in a critical path is usually the most efficient channel. Ordering Control (3 months) Under this regime, the Economic Order Quantity analysis of controlling inventory purchases will be implemented. Inventory Valuation (3 months) To supply the relevant data to the ordering authorities at Walmart, a continuous stock taking technique that monitors movement of every unit ordered from reception, storage till delivery will be enacted (Macintosh and Quattrone 2009, p268). Accountability Control Standards (1 month) Walmart will require an internal control system that will facilitate strict monitoring of the conduct of all employees with regard to handling of inventory. Constant documentation systems will be implemented to ensure that the correct authorization of movement of inventory and subsequent delivery takes place. Under the new layout, pilferages and damages will reduce handling costs at Walmart. Staff Training (1 week) To ensure that the staff members are conversant with the new procedures to be introduced, one week of training will be facilitated across the departments. Market Research (6 months) The best market trends in carrying out a fashionable inventory control will have to be consulted prior to the establishment of the system, to enable the management to come up with a competitive design. Budgets: Task Description Expenditure, as guided by the constraints of revenue and needs, will form a basis for cost projections under the new strategic program budgeted as follows. Besides carrying out an overhaul of the inventory system, Walmart will need to reassert its market presence through various promotional tools such as advertising and sales offers (Kasi 2011, p1). To complement to the market presence reassertion, the organization will need to venture into a customer experience that will sustain increased sales, such as more corporate social responsibility projects. Research and development will form part of the new investment required at Walmart. Innovation and creativity will be funded to raise the current information and communication technology utilization to enhance efficiency. Capacity will have to be expanded to increase the variety of commodities that the outlet currently accommodates. To monitor commodities while inside the Walmart premises and assist other accountability measures in reduction of pilferages, security systems will be installed. Budget: Serial No. Item/Activity Price per Unit $ No of units Total $ (1000) 1 Advertising 3000 2 Inventory system 2400 3 R&D 4000 4 Staff Training 2000 5 Corporate Responsibility 5000 6 Expansion 5000 2 10000 7 Personnel 5500 Total 31900 Description of Control Effectiveness Budgets usefulness in control and management is a multifaceted opportunity for organizations to achieve coordination of activities across the departments. It is also possible for organizations to limit expenditure to sustainable levels. Involvement of various departments in budgeting acts as a motivation and authority clarification to various employees. Budgeting is an important planning tool that facilitates future plans consideration in the investment program. As such, budgeting as a control mechanism plays a major role in the positioning of the organization in realization of interests within the scope of object achievement. Management Topic: Decision Making In strategic organizational management, decision making is the pillar of success direction that the organization wants to follow. Every project embarked by the organization at all levels of management is usually based on a policy framework that reconciles a number of interests and objectives of the various stakeholders’ party to the organization. At such a high level of networking of interests, policy formulation is entrenched on a backdrop of targets priory set to satisfy each of the stakeholders. Decision therefore making becomes a vital tool in the reconciliation of the targets set in order to facilitate sustenance of satisfaction among every quarter of interest (Butterfield and Savory, 1999, p16). In describing decision making within the context of strategy process and strategic management, it is a very critical process that determines the success of strategy. Decision making can be said to be the managerial process whose prime aim it is, to come up with a winning formula from a conglomeration of formulae. It is the process that upon making comparisons of several alternative business options comes up with the most striking option that facilitates growth of the organization. Short run operational and tactical decisions confront the most immediate requirements of the organization, by weighing consultatively predetermined alternatives in a challenge. In such decision making scenario, the management handles issues currently at hand regarding continuing operations or altering operations. Whether the management sticks with a given operation formula or opts to introduce changes to spur missing growth and productivity is the role of decision making process to determine. The most important aspect of short run decision making is the limited scope of time of intervention which is the current or the immediate future impact of operations (Offenbacher 2007, p4). Alternatively, decision the nature of decision making may be on a long term scope, which extends into the time horizon of several operating periods. The impact of decisions made with a long run scope is usually felt across the departments and for a considerable duration of time. There are far reaching implications that the decision making process introduces into the organization when long term decisions are undertaken. At Walmart, decision making process regarding formulation of a strategic plan as well as a control plan will be guided by the short run and long run needs of the organization. Besides the considering the time specific needs at Walmart, considerations will need to be made regarding the objectives of the organization. This is because both long run and short run and decision making are usually implemented under the confinements of the long run and short run objectives of an organization. Several alternatives that touch on strategy, control as well as network analysis at Walmart will be considered in the decision making process for a successful isolation of the most appropriate alternative in a consultative and analytical approach. At Walmart, research on likely implications under the regime of each alternative will act as the guide on arrival of a suitable option (Bridge and Dodds 1975, p2). Based on likely strategy, control and network analysis needs Walmart will consider short run and long run alternatives touching on; redefining ICT utilization, diversification of market coverage, objective and mission clarification, innovation, gender issues, sales modifications, wages issues and brand issues. In resolving these and several other organizational needs issues, the management will consider factors that directly influence managerial decisions including costs analysis under the each regime. Cost analysis of decisions proves to act as a determinant in selection of an alternative decision since some production cost mixes are usually more appropriate and applicable than others. Qualitative and quantitative factors will be used as alternative qualifiers at Walmart to come up with a successful decision making. Conclusion Information technologies applications in an organizational operation setting is perhaps one of most adventurous project that innovation and the business world have in complimenting each other. Since inception in 162, Walmart has grown to be an international corporation with a huge propensity to success and expansive opportunity to traverse the boundaries across the continents. However, the corporation has not been able to enjoy the full exploitation of opportunities presented by its unique market position. As demonstrated above, strategic control and planning hold an important channel through which the corporation can redefine the apparent latent propensity to take up opportunity. If the fortunes of economic success presented to the corporation by its shareholder value, objectives, profitability, market share, productivity, management team, soul and social presence are to be exploited using the appropriate strategy, it can acquire a special niche occupied by none other. Based on the analysis of its needs against a backdrop of its objectives, Walmart can be said to be slowed down by the lack of appreciation of its weaknesses and capitalizing on its strengths. Reference List Baker, S. L. (2010) Critical Path Method (CPM). [online] Available from [accessed 2 April 2011] Bridge, J. & Dodds, J. C. (1975) Managerial decision making. London, UK: Taylor & Francis Business Resource Software, Inc. (2011) Mission statement [online], Center for Business Planning. Available from [Accessed on 2 April 2011]. Butterfield, J. & Savory, A (1999) Holistic management: a new framework decision making. Washington, DC: Island Press Dess., Lumpkin, G. T. Taylor, M. L. (2005) Strategic management. New York, NY: McGraw-Hill Irwin. Kasi (2011) Market Mixx. [online] Available from: [accessed 2 April 2011] Linda. (2009) Strategic planning process: Evaluating alternative strategies [online] StrategicMarketingSegmentation.com. Available fro [Accessed on 2 April 2011]. 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