Impact of Walmart mission on Overall Success - Essay Example

 Impact of Walmart mission on Overall Success Impact of the company’s mission, vision, and primary stakeholders on overall success The mission and vision statement of Walmart indicates that the company aims to become a renowned retail company across the globe. Sam Walton had a vision of making his company the only choice for consumer market. The team members have incorporated the best facilities and infrastructure to provide exceptional service to all its customers. Mission statement of the company indicates that the retail store brings forth the best prices which cannot be imitated easily by other players in the industry. The company believes in passing on its savings to its customers so that they are able to live a more beautiful life. This vision and mission has been the reason for the company’s overall success. Walmart on basis of these values has developed strategies to offer wide range of products at lowest prices in the market. Its primary stakeholders also play a major role in the success of the company. For instance healthy relationship with suppliers enables the company to make bulk purchases at competitive prices and then pass on its savings to the customer base (Johnson & Scholes, 2003, pp. 67-68). Employees as stakeholders have a positive impact on the success in terms of their increased efficiency and dedication. On the other hand customers being another primary stakeholder helped the retail chain to enhance their growth through high level of loyalty and satisfaction. Analysis of the five (5) forces of competition Porter’s five forces model is a strategic tool which is used to conduct an industry analysis of a particular company. The five forces of this model are illustrated in figure1. Figure 1: Porter's Five Forces (Source: Johnson & Scholes, 2003, p. 90) The force exerted by potential competitors is moderate in case of Walmart. Grocers are the ones who can easily into this retail segment posing a tough competition for the company. It can be stated that entry barriers are relatively high as the organization has established a strong brand name, comprise of exceptional distribution network, encompass wide geographical area and has a strong financial arm to fight against all potential competitors. The rivalry amongst players is moderate and the major players apart from Walmart are Target, K-Mart and Sears. However Target is the retail chain which has achieved tremendous growth in its domestic markets. The bargaining power of buyers is relatively low as customers are offered convenience as well as best prices by the company. There is low to medium pressure in context of bargaining power of suppliers. This is because Walmart is a big retail chain and it provides lot of business to its wholesalers and manufacturers. The company possesses a large base of suppliers and low switching costs. In relation to retail industry the threat of substitute products is low. One of the substitutes is specialty stores where customers can find their desired products but not low prices which are being offered by Walmart. Online shopping is another substitute where cost advantage can be gained by customers. SWOT analysis for the company The major strengths of Walmart are its large scale of operations as it offers wide scale of items at reasonable prices across the globe. Information system also forms it’s another strength as the entire work process of the company is based on automated system. The company has been able to create a strong position in the market due to its cost leadership strategy. International operations of the company are another major strength which is possessed by the organization. However the company comprises of many weaknesses such as lawsuits which are related to labor. Since it is a large organization so often it becomes difficult to handle the large base of employees. Negative publicity of the company disrupts the brand image and it is even subjected to high employee turnover. Differentiation is less in relation to this retail chain. The opportunities for the company are increasing growth in retail sector in emerging markets. Walmart should focus on increasing its presence in its region of operations such as Mexico, China, Brazil and Indian markets. There is a high demand in consumer market for own label products. Online shopping and demand for healthy food products is an opportunity which can be explored by the company. The major threats are increasing competition posed by established players in the market and online retailers (Brunn, 2006, pp. 96-97). There is even high resistance offered by local communities as many local retailers are greatly affected by such retail chains. Rising prices of commodity is another threat for the company as it affects low price strategy of the firm and erodes its overall profit margin. Outline of a strategy for the company based on SWOT analysis The company has been able to develop a niche position in the market due to its low cost strategy. However there is a requirement for certain modification in the strategy as competition is increasing with rise in consumer market demand. The most effective strategy would be to launch an online platform through which customers can be able to shop at convenience. Walmart can utilize its strength of having wide range of products and information system to explore opportunity of online growth. In present scenario online shopping has gained significance and this would help the company to reduce on infrastructural expenses and reach out to large base of customers. On the other hand this strategy would even enable the company to eliminate its weakness of little differentiation as the firm would provide an innovative medium to communicate with its customers. This strategy would even help to cater threat in the form of strong competition being offered by online retailers. Various levels and types of strategies for the firm In present competitive scenario of the retail industry it is important for a company to adopt innovative strategies in order to enhance its overall profitability and competitiveness. The current strategy which is being implemented by Walmart is cost leadership strategy but this strategy can be easily adopted by any other retail firm. Hence it is essential for the company to incorporate some unique strategies in its system. As per Michael Porter there are four major strategies which can be effectively implemented within an organization. The first strategy is of cost leadership which has been implemented by Walmart in its operations. However with the growing trend of competition there is a need to incorporate differentiation in its operations. Differentiation strategy would enable the company to target large base of customers and majorly those who are brand and quality conscious. The company can keep branded clothes, own labeled products, foreign goods, organic products etc., in all its retail stores which can attract high income group customers. On the other hand Walmart can even apply focused cost leadership strategy through which some of its stores can offer high ended products such as branded clothes, footwear, accessories etc. Focused differentiation strategy can also be utilized by the company in the form of separating its wide range of stores on the basis of products being offered to end users. Outline of a communication plan Stakeholders are vital components in success and growth of an organization. The recommended strategies need to be conveyed appropriately so that they are implemented or executed accordingly. Organizational stakeholders can be classified as suppliers, employees, wholesalers, customers, etc., who own a direct or indirect stake in the company. It can be stated that communication plan for conveying the recommended strategies to customers would be different in comparison to internal stakeholders. Promotion or advertising would be a medium to communicate with customers in terms of new products or new stores being launched by the company. On the other end in order to communicate with internal stakeholders the best approach would be setting up an open discussion forum where all the members would be encouraged to bring forth the pros and cons of recommended strategies. Corporate governance mechanisms Corporate governance is considered to be an essential factor for success of a business. Walmart has strong corporate governance and it performs all its operations on the basis of high accountability and integrity. It can be stated that its corporate governance mechanism is based on delivering quality to the end users. They perform as per set ethical standards so that they are able to deliver value to shareholders as well as customers. The company has its corporate governance mechanism in the form of a Global Ethics Office which monitors the overall operation to ensure that the company delivers high value through its products or service. Walmart even encompass the corporate governance mechanism of serving the local communities and donating certain amount of their profit margins for improvement towards the society (Walmart, 2013, pp. 15-16). Managerial actions are greatly controlled by such corporate governance mechanism as it governs the steps taken by the management and helps to focus towards common goal not on individual interests. It can also be stated that these mechanisms provide a framework in which managers formulate their business strategies and perform its execution. Evaluation of leadership effectiveness within the corporation Leadership is one of the pillars in organizational growth and this element helps to improve the workplace environment. This factor is often neglected in large organizations as the focus is towards sustaining widespread operations. However an effective leadership to some extent enhances profitability as well as sustainability of a firm. Walmart encompasses democratic leadership structure in which the ultimate power is with the management to make decision or formulate strategies but opportunity is also given to the employees to put across their issues. There is two-way communication established within the organization which enables the team members to work at convenience. However the company is recently being subjected to high employee turnover. This can only be reduced if proper leadership skills are incorporated by the management in order to resolve labor problems occurring in the company (Lussier, 2012, pp. 96-97). There needs to be more of participative approach in the organization where innovative ideas of the employees would be appreciated and implemented by the leaders. Walmart can sustain its experienced employee base if team members are treated as an integral part of the organization. Corporate social responsibilities Walmart maintains a strong position in the industry through its social responsibilities and environmental responsibilities. It can be stated that this organization is able to sustain its niche market position through wide range of social activities and performing as per ethical standards. The company takes proper initiatives to ensure that carbon emissions due to their operations are low. Walmart has even incorporated devices in its work process to monitor and control the discharge of carbon emissions in the atmosphere. The company has even started off a charitable foundation which takes care of all those children who are deprived off their basic needs. They even encouraged women to join their organization and provided required training that helped them to work effectively in Walmart’s retail stores. The company’s initiative to promote healthy food products has made it acquire large market share (Fishman, 2006, pp. 102-103). Walmart even take effective actions to train and conduct audit of their supplier base in order to analyze whether the environmental regulation norms are being maintained by the suppliers or not. In overall context these activities help to create a positive image in front of consumer market and ultimately increase the profitability margin. References Brunn, S. (2006). Wal-Mart world: the world's biggest corporation in the global economy. USA: Taylor & Francis. Fishman, C. (2006). The Wal-Mart effect: how the world's most powerful company really works. USA : Penguin. Johnson, G., & Scholes, K. (2003). Exploring corporate strategy. London: Prentice Hill. Lussier, R. (2012). .Leadership: theory, application, & skill development. USA: Cengage Learning. Walmart, Inc. (2013). Walmart 2013 Annual Report. Retrieved from: http://c46b2bcc0db5865f5a76-91c2ff8eba65983a1c33d367b8503d02.r78.cf2.rackcdn.com/88/2d/4fdf67184a359fdef07b1c3f4732/2013-annual-report-for-walmart-stores-inc_130221024708579502.pdf. Read More