Executive summary By using the Advanced IT system Walmart has shown a continuous achievement and with a system that allows all the managers to post their point of view for the betterment of the company. Walmart itself has discovered two largest retailers one in Mexico and other one in Canada in 2004 and 2008.
Walmart expanding their business successfully all over the world. With the use of information system and by integrating themselves with the Japanese retail companies Walmart showed 94% of inventory accuracy in all countries where Walmart was doing its operations. Walmart is focusing on its strong point and their key customers by which Walmart can increase its sales more than $200 million in the next 3 years.
Walmart built its vision that by keeping the prices low customers will buy more products in bulk which increase their sales and thus results in more profit. Walmart provide a huge variety of products and services to the all type of customers which is very useful to them. Their main focus is to provide high quality trustworthy products to large, medium and small families. Walmart is looking forward to achieve three main targets that are: * Charging less for offering and delivering products at home to the customers. * 20% - 30%. Increasing the profit margins
* Sale of hardware products increasing around 30% in the 3rd year. Walmart adopted a public affair strategy that helps Wal-Mart to move its operations to other foreign nations and that makes them huge profit. Currently Walmart is in competition with K-mart which is at number second after Walmart in the US retail market. Walmart have around 1636 retail stores, 1093 supermarkets on their names and they have around 1183 international stores worldwide that are increasing day by day.
Introduction Sam Walton founder of Walmart opened his first Wal-Mart discount store in 1962. At present there are about 600 stores all over the US and these stores have approximately 106000 square feet area. These stores are providing pleasing customer service and satisfying shopping experience to all the customers.
Wal-Mart are stocked with variety of good quality and valued priced products such as: Toys, Electronics, Hardware, Jewelry, Health and beauty products, Home appliances, House wares, Pet Supplies and Family Clothing’s. Each store has employee of roughly 225 .In the financial year 2010 the Wal-Mart store generated $258 billion or 63.8% of the total sales in this particular year. There are more than 3000 supercentre across nationwide and most of them are open 24 * 7. These supercenters were developed to meet the rising demand for the low prices products.
They save a customer’s time and money by merging a full grocery and all the general merchandises are under one roof. The supercenter groceries highlights bakery goods, beverages, fresh produce, frozen food, spices, meat and dairy goods canned and packed goods etc. Wal-Mart Express Stores: Wal-Mart Express Stores was created to offer low price everyday products to customers who are in rural and urban areas where they may not have much access to the larger stores. The two of the initial Wal-Mart Express Store was opened in Northwest Arkansas in June 2011.
Organizational Structures: Three retail formats of Walmart have become famous in the United States of America such as discount stores, supercentres and Walmart markets. This retail section sell a huge range of known grocery products but now the focus has shifted towards supercentres which includes all the grocery items. Wal-Mart.com is one online retailer where the customers can buy any kind of products online and can also inquire about the products and services offered.
There are four types of organizational structures or design like functional, divisional, hybrid and matrix. Functional structures: It is a structure in which all the positions are set according to their main functional areas. Functional structures have some advantages and disadvantages such as: Advantages:
* Optimum use of resources * Possible technical advantage over competitors * Ease of synchronizes within functions * Achievable economies of scale Disadvantage: * Less interaction between the workers of an organization * Less training for qualified managers * Inaccurate measurement of performance * Slow reaction on multifunctional problems Divisional structures: It is a structure in which positions are set according to the similarity of the products and markets. There are four forms of divisional structure- product, process, geographic, customer. Advantage of divisional structure:
* Quick response to environment change * Large training in common management skills
Disadvantage of divisional structure: * Negligence of overall goals * Duplication of resources in each division * Less sharing of expertise across division.
Hybrid structures: It has both divisional and functional structures elements. Advantages of hybrid structures are: * Flexibility * Malleability in divisions * Functional efficiency * Position of corporate goals Disadvantages of hybrid structures are: * Disagreement between corporate departments and divisions * Extreme administrative overhead * Takes more time to response to the exceptional situations.
Matrix Structure: It is the form of departmentalization that lay over divisional horizontal reporting relationships on top of a hierarchical functional structure. Advantages of matrix structure:
* Proper decision making * Powerful project or products coordinate * Lithe use of human resources * Improving environmental monitoring Disadvantage of matrix structure: * Slow response to change * Overstress on group decision making, * More focus on internal relations. SWOT ANALYSIS STRENGTHS * The Wal-Mart has a competitive advantage in using the best information technology for its international logistics system. For example it helps the employees working in Wal-Mart to keep a track of their globalised recognized products. * The human resource management of the Wal-Mart emphasis on a strategy to recruit the efficient and skilled employees by providing them with effective training.
And for that Wal-Mart invests their respective time and money to become the best customer service company in that industry. * Wal-Mart has expanded the firm globally. It has created a joint venture with a very big and renowned firm Bharati in India. * Wal-Mart major strength lies in their customer. The customers are very much satisfied by the flexible service they offer.
WEAKNESSES * Wal-Mart may not have the flexibility which other focused competitors have because as Wal-Mart is selling its products in various sectors such as food, clothing, stationary, sports. * The small companies like family dollar and dollar general have entered the market and have been successful in achieving customer interest likewise Wal-Mart is also facing the same sort of competition with stores like K-Mart and Target. * Due to the huge span of control over its empire and mainly focusing on Information Technology advantages. Wal-Mart could go weak in some areas.
OPPORTUNITIES * Wal-Mart just created a joint venture with a huge Indian Company Bharati and it also merged itself with various other known companies in order to spread its business worldwide and become globally recognized and renowned. * Wal-Mart since now have done trading only with few countries, therefore there is a significant opportunities for the company to spend its consumer market in the near future. THREATS
* As a very known and popular company, there are many targeted competitors locally and all around the world. * Being a company who is globally recognized as a drawback of getting into political problems where you are operating.
PEST ANALYSIS POLITICAL It is the legal and political system in which an organization must function effectively and efficiently. Wal-Mart is the leading retailing industry with fiscal revenue of $244.5 billion in 2003. Wal-Mart response to the hurricane was well praised even by its critics; they donated $20 million worth of products, which includes food for 100,000 meals and gave jobs to the dislocated workers.
Wal-Mart’s distribution and donation agency is faster than the government. Pleasant environment to work, frugal culture and no regional offices are the main components of Wal-Mart because these are offered at a very cheap price as compared to its competitors. As Wal-Mart will keep on increasing the ease of convenience it will always remain America’s top retailer and will keep on growing. ECONOMIC
The economic element involves the systems of producing, distributing and consuming of the wealth. Wal-Mart is consists of world largest retailer with 405 billion dollars in sales for the financial year ending January 31, 2010. Wal-Mart in us operates around 4,300 facilities which include Wal-Mart supercenters, discount stores, Neighborhood stores and warehouse.
In spite of general weakness in the world economy and the vague environment that overcome, Wal-Mart had reported the growth of 11% to the total of 6.4$ billion. One of the main opportunity that this industry got is that they have the access of trading free of cost. This helped the Wal-Mart in expanding its business worldwide.
SOCIAL This includes the values, belief, attitudes, norms and general demographic trends. Wal-Mart’s store main target was to satisfy the needs of the low income customers. Headquarters were made in a ware house style building which had minimum fabrication. Stinginess was the main tined and the company, and every employer was demanded to abide by this rule in its entire sphere. It was known that the company was capturing the main streams of the market by allowing smaller upcoming towns to popularize their cultural aspects. TECHNOLOGICAL
It is the current knowledge of products and services. All the companies should understand the current technologies developments which affects their capability to offer products and services. Wal-Mart is the leader in the usage of technologies to maximize the operational effectiveness. The company realized the value to invest in technology and also developed a personal satellite network at a very early stage. Wal-Mart manages it own logistics through a spoke system of warehouse and other distribution centers.
Wal-Mart was the leading company in the efficient using of technology for maximizing operational efficiency. After that the company realized the value spend on this information technology sector and set up its private satellite network. This helped the company to know about the performance of every individual product country wide. Wal-Mart offered the best value in form of money for their product which is expensive in the market.
By launching products like fare trade coffee, florescent light bulbs, affordable organic produce, it is believed that it can play a powerful role in protecting our environment and will be able to shelter the natural resources. They can know that how an individual product is performing worldwide at a glance with the help of informational technology that maintains its logistic international system. It also holds Wal-Mart’s well-organized procurement.
VALUE CHAIN ANAYSIS Wal-Mart is considered as one of the largest fortune country which is able to spread its business all across the world. Wal-Mart is the largest retail chain which deals in food to every requirement of their consumers, like- stationary, electronics, etc. PRIMARY ACTIVITIES
INBOUND AND OUTBOUND LOGISTICS For making it easy and efficient the Wal-Mart use the cross docking approach in which goods are directly supplied to the customers from the manufacturing site of suppliers which reduced the work of an employee in handling and keeping the goods in the store. One of the most logistic infrastructures of Wal-Mart is its quick transportation system. OPERATIONS
Wal-Mart stores includes three different retail formats and all of these are located in United States of America such as supercentres, which has a wide range of variety of almost all types of products and full line supermarkets. The second one is the discount store which deals with product and limited amount of food products. The last segment is the neighborhood market which deals in less variety of general merchandise and full line supermarkets. The Wal-Mart has expanded its business in different countries like Argentina, Canada, Germany and UK. MARKETING AND SALES
In 1940 Sam Walton started his career with J.C Penny Company as a management trainee. He developed the Wal-Mart chain on Penney’s notion. He aimed to open merchandise at lower price which will satisfy the customer by providing friendly and clean shopping experience.
SUPPORT ACTIVITIES PROCUREMENT The idea of Wal-Mart is to minimize the purchasing cost so that it can sell to a customer at a cheaper rate. The company receives the goods directly from the suppliers. Wal-Mart has its own warehouse which supplies approximately 80% of the inventory. They have many distribution channels and every distribution centre is subdivided into different groups. Every employee working in the company has the access to know the information regarding the inventory level of each and every product. In this way Wal-Mart succeeded in satisfying the customer needs quickly and in improving management operations.
TECHNOLOGY Technology has made the life of an individual easier and approachable. Wal-Mart works on the same strategy. Wal-Mart has been a big company to keep an eye on man and materials which is to be delivered across different countries and it’s been successful in maintaining its warehouses all over the world.
Recommendation: * Walmart should have mission statement that all the items sold are suitable for the customers in the places where they have been marketing. As a result of increasing population walmart should make sure that they have a continuity in selling there product so that they is no shortage of any stock. * Moreover , expnading more walmart stores to ensure that all the customers are been able to take advantage of such retail stores. * Walmart stores should spread their intenet retailing in order to sell more goods world wide reaching all the major parts.
* As for the safety, walmart should submit a safety and security plan before a certified of occupancy is issued for the operation of the store. * Walmart can open a baby care so that the mothers who shop can easily go ahead and shop without any disturbance while their baby is taken care off. * To improve there customer satifaction capability, walmart should expand their stores size to keep more products in stock. * They should offer free dilivery service for all the transaction that have been made above 50$.
* Walmart loves donating to charities to create a good impression. They should be more active in charities rather than just giving cash. * Walmart has a good financial background. It should put the money in promoting itself and to build up corporate strategies. * Walmart should have information dest at every desk which provides and answers all the questions of the customers. Walmart associate everything they need to know from the customer desk.
*Walmart spend less on advertising itself as compared to its rivals. It should use its strong financial position to advertise itself more. * They should bulit up more marketing strategies which can benefit them. * They should take customers feedback and act accordingly on improving itself.