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Strategic Management: A Case Study of Wal-Mart Inc.
Management Strategy
A case study Wal-Mart
Introduction
Porter (2002) states that the root of the problem is the lack of distinction between efficiency operating and strategy. The issue of productivity, quality and speed has resulted in tools and techniques of management, total quality management reference, time-based competencies, outsourcing, partnering, reengineering management, change. In any organization, management strategy is the key to its success. There are many theories on the basis of this assumption that without an adequate strategy and planning, it is difficult for any industry to survive regardless of their size. You need to understand here that all the major business organizations have been established through strategic planning and superior performance. The retail industry is news everywhere, not only in traditional industries, increasing its sales, but also intruders industries larger companies in this industry, such as addiction addiction costs @ Industries Aditya Birla Group During the India. Wal-Mart, a retail industry in the United States, known as the retail giant has survived and is still big business in the world that covers nearly all foods and beverages, clothing, etc. Not only is the largest company in the world, but also The largest company in the world history. (Fishman, 2006) This document is divided into four sections to understand and respond like Wal-Mart does best in the industry, 1) of the retail industry for the time input components Wal-Mart, 2) the competitive advantage of Wal-Mart and the key, 3) the strategy Wal-Mart and 4) the sustainable growth of Wal-Mart.
I. Retail Industry – Wal-Mart says Hello!
Strategic decisions are those destined to differentiate an organization from its competitors in a way that is sustainable in the future. (Porter, 2002) Porter strongly recommends that business decisions can be classified as strategic if they involve some innovation and the difference resulting in a sustainable advantage. According to Patrick Hayden et al style industry (2002) adopted retail discounts on their products after the World War II. It is known that the discount retailer's strategy was not at Kmart, Target and Wal-Mart has begun to operate. Frank (2006) states that when Sam Walton was the franchise for the Ben Franklin variety store, invented the idea of spending their savings customers and earn profits through volume. Before the entry of Wal-Mart on the market, Sidney Harrison and Hebert founded Two Guys discount stores in 1946 when he was equipment, automotive parts and later at the grocery store. Two boys was the precursor relative to retailers today like Super Target, Wal-Mart has succumbed to the economic recession. Another discount store established by Eugene and EJ Korvette, which is often cited as the first discount store that does not arise in 5 to 10 cents, and finally the roots declare bankruptcy because of the inability to compete with new competitors.
Porter (2002) states that the combination of operational efficiency and strategy is essential to superior performance is the goal principal of any organization. He also says that a company can perform their rivals if it can work in different ways which are not in practice. emphasis had been placed in strategic positioning and positioning broad needs – SEO based on access and positioning.
Wal-Mart, began work at other Target stores, Woolworth (Woolco) and K-Mart. However, the target was courtesy running successful, Wal-Mart, but two operations failed and declared bankruptcy. (Michael Bergdahl, 2004) five forces model of Porter explained that strategic decisions must be taken and on what basis. The model explains the basic strategies to consider when starting a business that bargaining power of suppliers. While Franklin franchise has always sought cheaper deals and the idea of spending their savings to customers and win in Beach volume bulk purchases. Thanks to the form of discount stores, buyers have received the cheaper price compared to any other store. Regarding threats of new competitors, Wal-Mart was constantly in the news for the acquisition of other small businesses to expand. But nevertheless has a strong carving competition Super Target, Tesco, etc. is the world's largest industry retail sales.
II. Elements Key Wal-Mart Business Model
Wal-Mart is the leader in the distribution sector with revenues of $ U.S. 244.52 billion in 2003 this making it the largest company in the world. Mike reports that Wal-Mart in 2002 had 1.283 million employees increased to 11.2%. The above data explains that the strategy Wal-Mart is extraordinary that manages and operates over 4,150 retail facilities globally.The key elements of Wal-Mart (the value chain), which offers lower prices than its competitors, including enterprise infrastructure that frugal culture, it has regional offices and pleasant work environment. Efforts take many visits and learns that there is no testing before any meeting usually on Saturdays. In any organization, resources Human development is the key to Wal-Mart and effectively manages its sources. Under Wal-Mart employees as partners. Manager compensation is related to the provision of store operated by him in promotions, compensation for partners based on corporate profits and also offer incentives in performance. Work in non-unionized Wal-Mart that the company takes all measures benefits and training on related topics. The Technology plays a vital role in the development of the organization and Wal-Mart is well equipped with technology innovations such as point of sale tracking performance shops, market studies, the satellite system in real time and UPC. Wal-Mart, recruitment measures that negotiations ruthless alliances with certain suppliers, centralized procurement, planning packages, etc. help the cause of the general supply goods and services at low prices. Other factors that increase profit margins at Wal-Mart production logistics with frequent replenishment, distribution centers, auto crossing, selection on race, EDI, and the center of the floor system. Wal-Mart strategy of the operation is innovative with department stores small towns with a monopoly on the market Low rental costs, local prices, expanding concentric brand products, private label, little room for inventory, a store 's, etc. In terms of marketing and sales, marketing is a measure of the premises, spent less on advertising and prices are fixed and depends on the store manager the latitude to set prices. All these factors combined are the key elements of Wal-Mart, which not only increase profit margins by selling in bulk, but also increase customer confidence in services such as point of sale system and daily news Low prices.
III. Wal-Mart Strategy
Wal-Mart dominates the retail industry in America, because of several factors that its business model remains a mystery and its efficiency by not allowing the opponents to find weaknesses. Wal-Mart attempts to formulate strategy in which dominate the retail market, where its presence, growth and expansion in the U.S. and international awareness brand and overall customer satisfaction in terms of brand Wal-Mart and branching into new areas of retailing.
We know that Wal-Mart strives three generic strategies that work is the strategy, the strategy of differentiation and cost leadership in general. Managers work hard to make their organization unique, distinctive and identify key success factors that encourages customers to buy your products.Thus, enterprise resource and capabilities are essential to explain the performance of the company. Resource View (RBV) explained the heterogeneity competitive based on the premise that close competitors differ in their resources and capabilities to provide significant and sustainable. Business capacity may be found thanks to its functionality, reliable performance, such as logistics than Wal-Mart. (Helfat, 2002) Wal-Mart has a strong infrastructure and human well-equipped professionals and resource management technology.
All organizations to thrive hard to succeed You need to have better resources and superior capabilities. Wal-Mart with RBV strong economically and financially strong enough to stop at time of the crisis. Pereira states that dominate the retail market for its core strategy. Wal-Mart operates in the low-price strategy that works like everyday low price (EDLP), which generates confidence among customers. (Brunn, 2006) The strategy is to buy goods at lower prices and sell products to customers at prices much lower, reducing prices as much profit as possible and increase the sales increase. This increases the fierce competition on the market and Wal-Mart is competing with all its competitors is dominant in the market.
Wal-Mart is expanding for good and it is also their goal Strategic. Wal-Mart uses over 1.3 Related owner of 4,000 companies that are in the U.S. 3000 and serve about 100 million users each week. Wal-Mart has acquired many international magazines and merged with some super stores such as ASDA in the UK. Wal-Mart laid network of retail outlets has meant that Wal-Mart interact and affect virtually every location within the United States. (Helfat, 2002) The expansion strategy has led to the Wal-Mart hunger in many countries in Europe. It is known that three countries that do not have Wal-Mart has become part of the international presence of the company where national retail chains have been acquired by Wal-Mart, 122 Woolco stores in Canada, 21 stores Wertkauf 229 units in Germany and ASDA in the UK. Strategy acquisition by Wal-Mart keeps the company at the cutting edge as we enter the new market and the number of competitors is minimized as well. Strategies have contributed to Wal-Mart to control the number one position in foreign countries, which is the world's largest retailer.
We see that Wal-Mart has significantly porters five models where the force through a strategic planning and strategic implementation led the elimination of barriers to entry, rivalry among competitors and pricing rules. Regarding the alternatives, Wal-Mart to reach its goal of customer satisfaction in selling products under its own legal framework. phenomenon of large-area Wal-Mart has changed the industry Retail in the United States, which is often regarded as discount stores and made profits by purchasing a high volume low profit margin on profits. (Parnell, 2008) Wal-Mart with its low cost and ever-expanding strategy had a dramatic impact since 1962 when Sam Walton started his business. With this strategy, Wal-Mart now has more than 4,000 stores and outlets in the United States and other countries through acquisitions and mergers.
IV. Sustainability in the discount retail sector – Wal-Mart
According to Porter (2002) Efficiency and operational efficiency are the keys to success in any organization. A company can outperform its rivals or competitors on the market only with senior management and effective monitoring to create a contrast with the other end attracts customers. Porter defines effectiveness operational performance of activities similar to those of its rivals, but better than them. In one study, said the Wal-Mart is an expert in manipulation of perceptions. This is called the low-price strategy is not Wal-Mart, but the announcement manipulate consumer perception into believing that their prices are lower spin price "price" of competitors. "Wal-Mart means that consumers are addicted to get to their stores to convince them that the prices are lower than in other stores selling himself cheaper advertising that "we have lower prices than someone else and put an "opening price point. The point of" opening price is the lowest price in the store that keeps high visibility which makes consumers believe that goods in this store are actually cheaper. (Carrera Cowgill, 2005)
The SWOT analysis reveals Wal-Mart is more powerful retail brand, reputation, money, value commitment, and offers a variety of products. It grows at a rate supported, with the expansion of its horizons to other parts of the world through the acquisition and merger. Wal-Mart has good opportunities in the markets Europe and China, and focuses on the acquisition on the market by acquiring small shops and the merger with leaders in specific markets. Wal-Mart is still threatened to maintain its leading position in the domestic and international markets. World leader in the industry leaves the organization vulnerable many socio-economic developments and policies.
Sustainability is the first most important task makes its management tries to develop policy and strategy to compete with competitors. Slack, imitation, substitution, hold-ups are some of the threats to an organization in the retail industry. However, Wal-Mart with its visionary goal of achieving zero waste status and achieve 100% energy renewables is expected to launch a number of sustainability initiatives. (GreenBiz, 2008) Imitation increase the benefits that the offer increases. But imitation is known, relationships involved James Hall reports that Wal-Mart plans to open convenience stores, Tesco has started to operate at United States and called Fresh & Easy Neighbourhood Markets. (Santiago, 2008) These tactics created mixed reactions among consumers and degrade the reputation of market leader. Substitution reduces demand for what the company provides only the shift in demand elsewhere due to changes in technology. The threat of substitution can be subtle and unexpected as the minimization of costs by videoconference instead of flying long meetings distance of its managers of other stores, etc. Therefore, position is a particularly effective way to attack his rival dominant. Replacement provides answers mixed after the identification and understanding of the threats. The organization must fight against the threat and merging with them, changing the replacement options to be on the market. Holdup shifts the value to customers, suppliers or they have some additional bargaining power resulting from bitter negotiations, contractual arrangements and vertical integration.
Wal-Mart is having wide network of nearly 7,800 stores and more Sam's Club in 16 markets worldwide. It employs more than 2 million associates, serving more than 100 million customers each year. According to Fishman (2006), Americans spend $ 26 million every hour at Wal-Mart, which makes it credible that Wal-Mart is financially sound and able to fight any threat of their rivals in the market. Wal-Mart is constantly expanding its borders through acquisition and mergers. Thus, Wal-Mart with a large network of stores and alliances in the forms of ASDA, Target and many other stores is sufficiently well protected to maintain their leading position in the retail industry.
About the Author
Gopal Pottabathni
email: gopalpottabathni@gmail.com
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