Strategic Choice And Evaluation: Walmart Inc.

Wal-Mart is a brand that is well known around the world, especially in the USA. It has gradually developed into the largest retailer in the world. Wal-Mart’s globalization efforts have been happening rapidly. But have they been successful in all aspects of their international expansion or not? This is the main thought that is going to be discussed in this essay. The questions I will be looking at are based on a case called “Wal-Mart takes on the world” from the book of International Business The Challenge of Global Competition eleventh edition – Ball, McCulloch, Geringer, Minor, and McNett. Questions are the following:

As the leading discount retailer in the United States, WalMart (NYSE:WMT) has consistently shown an exceptional ability to master the complexities of logistics, supply chain management, retailing and pricing management. The WalMart supply chain is among the most advanced and sophisticated in its use of analytics and information systems globally, often computing pricing variation and analysis literally overnight based on satellite uploads of information (WalMart Investor Relations, 2013). WalMart has also successfully taken a capital-intensive business model and transformed it into a retailing business capable of generating high profitability from low margin products based one efficiency alone (Zhu, Singh, Manuszak, 2009). WalMart is also one of the most-researched companies in the world, and continues to provide in-depth financial data on their Investor Relations site (WalMart Investor Relations, 2013). The purpose of this analysis is to evaluate the mission, vision, and overall strategy of WalMart and also define three objectives for improving the organization's financial position, showing how the objectives defined relate to the mission, vision and strategy of the company. In addition for each objective, meaningful performance measures are provided in addition to defined expected level of performance as well. For each of the objectives chosen at least one new

Retail super-giant Wal-Mart has fought its way to becoming the world's largest company. Wal-Mart’s legendary supply chain technology has allowed them to break the three-day barrier that some economists in the eighties felt that it was unbreakable. In other words, Wal-Mart is often able to replenish items on the Wal-Mart shelf in less than three days – not from the central warehouse to the shelf, but from the manufacturer to the shelf. With quick and reliable 2-day turn around, Wal-Mart is able to maintain lower levels of inventory and still meet customer demand. These lower inventory levels result in either a reduced floor plan with lower carrying costs and lower interest expense – or a greater diversity of products on the store shelves.

Walmart’s approach means frequent, informal cooperation among stores, distribution centres and suppliers and less centralized control. The company’s supply chain allowed consumers to effectively pull merchandise to stores rather than having the company push goods onto shelves by tracking customer purchases and demand. Through the use of universal product codes, implementation of Retail links at the store, use of RFIDs and smart tags, suppliers and manufacturers within the supply chain synchronize their demand forecaste under a collaborative planning, forecasting and replenishment scheme, and every link in the chain was connected through technology that includes a central database, store-level point-of-sale systems, and a satellite network. As per report, there was a 16% reduction in out-of-stocks with the use of RFIDs and pointed out that the products using an electronic product code were replenished three times as fast as items that only used bar code technology. These strategies have made Walmart to be the dominant force over other competitors with information and technology helping its supply chain strategy attain greater

The two supply chains of Walmart and Amazon are different from each other and are efficient at their own perspectives. Both the supply chains are highly efficient in reaching out the customers in different ways. Walmart’s supply chain is completely based on store based retailing whereas Amazon’s supply chain is based on online retailing. The various methods followed by Walmart in its supply chain are vendor management inventory, cross-docking and central warehousing. Amazon acts as a retailer, as a third party and as an agent in supply chain management while selling various products through online.

In business, three major strategies comprising of cost leadership, differentiation, and focus strategies exist. The focus strategy emphasizes on providing services and products to a specified buyer group or market segment within a given geographic market. The differentiation approach is often defined as provision of services or products that are perceived to be unique in the market place. Wal-Mart emphasizes on the long-term strategy of cost leadership. Through this strategy, the company ensures that it offers customers with quality products at relatively lower prices than other providers in the industry. Through overall cost leadership strategy, Wal-Mart has been offering better quality products at a lower price than any competitor can offer. For the organization to achieve this goal, it has developed long-term supply chain management, which ensures that products are made available to the market at the required time (Enz, 2010).

The development of the Internet and more specifically the business website has seen brand recognition by consumers escalate to never before seen heights. Because of this brand recognition, it has become important for businesses to design their websites to reflect their overall marketing strategies. This is especially important in the retail world. All retail businesses have a similar overall marketing strategy of generating sales and retaining the customer for future sales. Most of the retail giants still greatly rely on the success of their brick and mortar stores to turn a profit. However, internet sales for these brick and mortar stores have increasingly risen over the last few years to compete with the retail stores like Amazon that are strictly internet based businesses. Brick and mortar retail stores, such as Walmart, Target, Kmart, and Nordstrom, have each designed their websites to reflect the overall retail marketing strategy as well as the individual marketing strategies that have made their brick and mortar businesses successful.

Since Wal-Mart is a mass market retailer, its primary source of value that it adds to the company is derived from its supply chain. Wal-Mart has suppliers located all over the world and it purchases goods from a wide range of different types of vendors. Many of the company's primary vendors are directly connected to Wal-Mart's IT systems through what is referred to as an electronic data interchange (EDI). An EDI can instantaneous transmit data between Wal-Mart and their vendors. Such information can consist of order information, stock supplies, demand forecasting and many other key supply chain metrics. The advantages of such a system are clear as they can greatly assist creating efficiencies in the supply chain. However, not all suppliers have developed sufficient IT technologies to participate in an EDI program with Wal-Mart. Another option for greater coordination between parties in the supply chain is web-based supplier integration. Although the web-based systems are not quite as sophisticated as an EDI, they are more accessible for many of the smaller suppliers and they have shown to improve long-term coordination, cooperation, and commitment.

4. Relations with Suppliers- Wal-Mart has in place a system that helps to achieve their goal of lower prices. This Information Technology system includes computers, networking, and internet that cuts inventories and waste and helps with speedy delivery. This system also helps Wal-Mart to keep in constant contact with suppliers by transferring the data that suppliers need so they know what Wal-Mart needs. Wal-Mart also works with suppliers to improve their production and squeezes the best prices out of its supplier. The video referred to Wal-Mart as the customer’s agent. All of this focus Wal-Mart puts on suppliers reduces costs and lowers prices. Wal-Mart’s technological/logistical leadership remains unmatched by competitors (Web, 2005).

Walmart.com has an alliance with the master of retail process: Wal-Mart. Having the best process and infrastructure when it applies to supply chain is definitely a competitive advantage. Walmart.com can take advantage of back end operations and inventory management processes through its alliance with Wal-Mart.

The five generic competitive strategies are low-cost provider, broad differentiation, focused low-cost, focused differentiation strategy, and best-cost provider strategy. According to the textbook, “a company’s competitive strategy deals exclusively with the specifics of management’s game plan for competing successfully” (Gamble, 93).

“Always low prices”, is the first thing you think of when you think about one of the most successful companies around the world, Wal-Mart. For years they stand as a well know company due to their everyday low prices and variety of products. Their mission statement is “Saving people money so that they can live better”. They have chosen their mission statement wisely yet there is a lot of controversy when it comes to this International Company.

Wal-Mart was founded by businessman Sam Walton in 1962 as a small retail store in Arkansas, USA. From there it has grown to become the largest retail giant in the world. Ranked by Forbes 2000 list for 2011 as the 18th largest public corporation in the world, Wal-Mart is the highest revenue generating public entity in the world as of 31st January 2011, with gross revenue of 422 billion US Dollars (Walmart Annual Report, 2011). It is also noted for being the largest private employer in the world having just over 2 million employees serving in 8500 stores, in 15 different countries, under 55 different names, worldwide. (Daniel, 2010)

Wal-Mart Stores Inc. helps individuals around the globe spare cash and live better - at whatever time and anyplace - in retail locations, online and through their cell phones. Every week, more than 245 million clients and individuals visit our almost 11,000 stores under 65 flags in 28 nations and e-trade sites in 11 nations. With financial year 2015 net offers of $482.2 billion, Wal-Mart utilizes 2.2 million partners around the world. (Wal-Mart Corporate) Wal-Mart is a superpower in the business world and has been that way for 50+ years. Understanding how it got to this point and how it has maintained its successful business model starts with its

Successful corporations in today’s business world must be able to employ different levels of planning in order to achieve goals put in place by senior management. Wal-Mart has many different levels of management planning in place to follow through on its goals and objectives. There are many factors that influence Wal-Mart’s strategic, tactical, operational and contingency planning. Although Wal-Mart has been a very successful corporation throughout its existence, it has had to absorb the impact of legal issues, ethics, and corporate responsibility in its management planning.