Wal-Mart Strategic Control, Innovation and Entrepreneurship In ensuring that business, long-term objectives are realized managers formulate and implement strategic objectives and goals. Strategic goals are long term and are based on assumptions that might not necessarily be realized. Managers must therefore review their decisions during the implementation process by comparing the targeted results to the actual results recorded. It is thus important that the strategic controls, innovation, and entrepreneurship become integral to the business policy formulation and management (Hitt, Duane, and Robert 376). Every business has to monitor the performance of competitors and the changes in the environment to ensure that its products and services remain important to the customers and the society.
Wal-Mart as a business is also affected by the environment and must therefore control the strategies and objectives to attain profitability. Wal-Mart strategies are endeavored at increasing their competitiveness and survival in the hostile market. The focus strategy adopted enables the business to serve their target market well and to satisfy ever-changing demand. Wal-Mart products are of good quality and are preferred because of their low costs compared to those of competitors.
The unique diversification strategy of broadening their products offered their customers an opportunity to have a one-stop shopping (Hitt, Duane, and Robert 378). Wal-Mart stocked electronics, clothing, and groceries, pharmaceutical and other medical facilities. As a result, the wide base customers enabled Wal-Mart have mitigate the impact of poor performance should some segments record poor performance. The strategic choice of selling these wide products strengthened the financial performance and customer satisfaction hence looking into the interests of their stakeholders. This therefore makes Wal-Mart be preferred buy the customers in the market.
The cost leadership strategy makes Wal-Mart enjoy economies of large scale sale. Lower costs increases the quantity sold hence increasing the revenues. Moreover, Wal-Mart differentiation strategy makes their products distinct and preferred by the market. It is therefore necessary for the business to monitor the changes in these strategies to continue dominating the industry. Wal-Mart as a way of ensuring cost leadership strategy buys their products from the lowest costs possible and sells the products at lower costs in the market. They charge a margin on these sales to enable them generate revenues for operations and increase their returns.
In a competitive market, customers are quite sensitive of changes in the prices and any slight increase in the commodity prices may make them prefer competitor’s goods. The low cost sales ensure that their customers remain loyal and prefer their low cost products. It is important to note that Wal-Mart has not compromised on the quality of their products in their bid to lower the cost of their sales. The aim of selling at lower prices is to increase their quantity.
Another strategic premise pursued by Wal-Mart is expansion to other regions and opening of stores near the customers. The many stores increase the accessibility of the products to customers and can also act as a strategy of marketing their products to the customers. Successful marketing is only feasible if the target market can access the products at their convenience and at the right time. Wal-Mart expanded its operation outside US as a way of increasing their revenue and customer base. Wal-Mart entered into mergers and take-over to become a front-runner in the industry.
The mergers with already existing companies allow for quick entry in new markets and reduce the cost of operations (Hitt, Duane, and Robert 379). As a strategic control, Wal-Mart evaluated all the strategic acquisitions and monitored environmental factors before venturing into the alliances. Wal-Mart value chain focus has supported it in gaining strategic fit in the retail business. Each process in the company is supposed to add value on the consumer products to increasers their preference. The use of cross docking further made Wal-Mart reduce the cost of handling their goods hence reduce the cost of their products for the customers.
In cross docking, new merchandise are received, selected, repackaged, and distributed across several docks. Through this, efficiency in cost is achieved and goods fast distributed. Moreover, Wal-Mart used radio frequency identification (RFID) to efficiently manage and monitor the movement of their inventory. RFID enabled them to digitally monitor their ships and manage their supply chain. As strength, the company information system promoted better management of their stores and reduced operation costs.
The head office has the ability of detecting faulty goods and taking note of the stock that has been sold at the outlets (Williams, 36). Technology and a good information system is a fundamental recipe in ensuring better management and growth in the business. Strategic surveillance made the company management forecast the expected and unexpected changes in the industry and makes necessary adjustments in preventing any adverse impacts on the business. This way, Wal-Mart has survived tough economic times and challenges that befell the world economy. Another element of strategic control is the special alert control.
Special alerts are the occurrences and experiences used to determine whether the strategic expectations are met. In the case of Wal-Mart, both financial and customer satisfaction surveys have been employed to raise alarm in the company’s performance. The online customer feedback systems and the customer relationship system give the Wal-Mart the opportunity of receiving feedback from their customers and stocking the right products required by the market (Williams, 19). The company profit targets and market share growth shows the level of efficiency and effectiveness of the business performance.
Besides, the control in the implementation process is essential in having Wal-Mart succeed in their business lines. Through control, deviations are determined and corrective actions taken to realize desired results. Innovation can be defined as the creation of new products or services from the existing or new knowledge with the objective of commercialization. The new ideas have to be converted into business form to yield returns for the business. In the case of Wal-Mart, innovation is key in their distribution chain. Wal-Mart has adopted the RFID to monitor the movement of their products from the manufacture to their stores, and off the shelves to the customers (Williams, 23).
The introduction of RFID has significantly reduced operation cost and is seen as an efficient way of controlling the movement of their products. More still, the company invests in innovating ways of reducing environmental impacts of their activities. The management is interested in recycling, reducing, and reusing most of their resources to avoid wastes and emissions to the environment (Roberts, 26). The sustainable value networks are meant to ensure that the renewable resources and wastes are monitored for the benefit of the company, consumer, and the environment. In managing their stores and their products, Wal-Mart laid emphasis on buying highly innovative products that are in demand and that are preferred by their target consumers.
Innovation is therefore a very important part in the management of the retail business where diverse products and goods like electronics form a province. Wal-Mart further aims at innovating better information system that would allow communication and feedback on performance both from the users of their products and their stores.
The changing technology and the need to invent new methods of operations make investment in innovation indispensible foe Wal-Mart. The consequences of failing to bring new ideas and products will be suicidal to a business that expects to survive and grow in the fast changing environment where consumers’ tastes and preferences are fast changing. Finally, entrepreneurial skills and knowledge should also be exhibited in the operations and business segments of Wal-Mart. An entrepreneurial venture requires both management and high innovation and creative skills if better returns and performance is to be recorded.
In the case of Wal-Mart, the management must constantly and incessantly invent new ideas that will satisfy the customer demands. Entrepreneurship entails the identification of opportunities and pursuing the relevant processes to make profits out of the time. Wal-Mart must therefore develop teams that are in charge of conducting consumer survey and research in order to come up with decisions that are in line with the target market expectation. In buying the products that are to be distributed to their stores, consumers’ tastes and preferences should form the basis of choice. The final element of entrepreneurship involves the commitment of resources in the identified and viable business opportunities.
Any company must determine whether to use debt or equity as a way of financing the capital required to undertake the new investment opportunities. In the same breadth, a cost benefit analysis has to be undertaken before enormous resources are invested in a particular business or line. A risk return trade off has to be made and evaluated during the investment process. Wal-Mart should therefore make investment decisions in a way that ensures profits are made and that the risks are bearable.
If the entrepreneurial strategies are coupled with innovation and better management skills, customer satisfaction and financial performance will be at the optimal. In conclusion, the dynamic and changing customer’s tastes and preferences demands continuous decisions and evaluation in the decisions implemented. Control measures have to be initiated to detect deviations ad take corrective actions. The management support and stakeholders feedback is also pertinent in the retail business characterized by hostile competition and ever-changing environment.
Works Cited Hitt, Michael A., R. Duane Ireland, and Robert E. Hoskisson. Strategic management: competitiveness & globalization: concepts and cases. 9th ed. Mason, Ohio: South- Western Cengage Learning, 2011. Print. Roberts, David. “Wal-Mart CEO lays out ambitious social and environmental goals for his company, ” Grist, Jan. 24, 2009. Retrieved from http: //www. grist. org/article/great-scott Williams, David H. "The Strategic Implications of Wal-Mart’s RFID Mandate. " Directions Magazines (2004). retrieved from http: //www. directionsmag. com/articles/the-strategic- implications-of-wal-marts-rfid-mandate/123667