4 part assignment

This is a paper about Walmart Inc.; a multimillion retail company based in the United States (US). The paper gives a detailed analysis of the company’s nature (industry, products and services, history, and position in relation to competition), organizational structure and business strategy. It provides an in-depth understanding of the organization, with an aim of creating a foundation for further analysis to develop further strategies for success.

Nature of The Organization

History and Industry

Walmart Inc. was founded 57 year ago by Sam Walton. His passion was based on his belief for good leadership and the urge to save people money for better lives, hence starting a small store that offered consumers more at a lesser prize. It has since grown into a world leading player with physical presence in more than 27 countries in addition to online stores (Walmart, 2019). The company has over 2 million employees, with several benefits such as parental and adoption leave and enhanced retirement benefits. These keep employees happy, empowered that results in enhance productivity as Walmart Inc. recognizes that its success depends on good employee performance. Hut (2014) supports this by stating that poor management decisions are often the result of not appreciating what drives employee performance.

It was listed in the New York Stock Exchange in 1972, when it recorded sales of $78 million (Walmart, 2019). Despite Sam’s death in 1992, the company has continued to record profits, with heightened emphasis on sustainability, innovation, great customer experience, and enhanced staff benefits. The company operates in the retail industry, a field known for the sale of consumer goods and services through a chain of branches and other departments. It is currently the world’s largest retailer and has acquired other companies for further growth.

Products and Services and Position in Relation to Competition

Its products include groceries, health products, electronics, pet supplies, clothing, books, and many other supermarket products. The company also trades in services such as financial and fuel. To achieve uniqueness, it puts in place further initiatives beyond its core business by venture into other fields that make it an all-round organization. A lot of emphasis is placed on ensuring environmental sustainability and community development. This has seen placement in the Walmart Foundation and a project for fighting hunger in the US (Walmart, 2019). The company’s service standards are top-notch, with excellent customer experience being their core focus to ensure their customers are continually satisfied. This is engrained in their culture, which every employee is expected to adhere to, for realization of great returns. Hunt (2014) states that key frameworks help in creating a healthier, more productive work environment for employees and customers alike.

In the wake of increased competition and daily emerging stores, Walmart Inc. still boasts being the retail industry’s world leader. This is in the backdrop of the company recording a 3% increase in revenue to $514.4 billion and generating an operating cashflow of $278 billion in 2018 as per the financial report by Walmart (2019). The company also recorded the highest annual growth in the industry in its 3.6% growth in fuel sales (Walmart, 2019).

Among the products and services placing Walmart at the top of the industry are its introduction of innovative functionalities that are not yet established by its competitors. It has over 2,000 grocery pick-up spots where customers can drive through and pick up groceries they purchased online in advance; this saves them the trouble of having to waste time getting to the store in person. The company also has Item Finder & store maps launched in the Walmart App (Walmart, 2019). This enables shoppers to quickly navigate through the store’s shelves stocked with hundreds of products, and easily trace what they are looking for, a functionality that is not with all players in the retail industry. It also boasts a club where they provide value at members-only prices, a quality merchandise assortment, and bulk sizing to serve both its Plus and Club members (Walmart, 2019). Such values do not exist at its competitors’ stores, as they are yet to revamp the customer value propositions (CVP) offered by their loyalty cards. As a result, Walmart Inc. provides very stiff competition for these players.

Organizational Chart of Walmart Inc.

Business Strategy

Walmart Inc.’s main business strategy banks on its low-cost products, with an aim of making consumers’ lives better by providing them with quality products at lower prizes. This puts the company way ahead of the market as more customers will choose their affordability advantage over its competitors. One method of beating competition is differentiation and setting lower prizes (Education Unlocked, 2013). Differentiation is the specific area of the business I plan to address; it mainly deals with strategies put in place to market the same products with additional minor adjustments to make them more appealing to customers. All the strategies highlighted in this paper can be said to fall under this area as they are all aimed at setting the company apart and giving it a competitive advantage.

Other strategies used by Walmart Inc. other than price, are access, experience, and differentiation (Walmart, 2019). Walmart Inc.’s wide variety of goods and services gives customers an assortment of items to choose from as compared to other stores where they have to make stops elsewhere to pick other items to complete their shopping. The store’s wide physical presence in over 27 countries and online coverage in 10 countries also provide easy accessibility to customers. According to Porter (2008), one needs to expand their services so it’s harder for customers to leave for a rival. Walmart Inc. has capitalized on this competitive strategy by offering additional goods and services such as fuel and financial services, making the store a one-stop shop; a functionality that is currently highly sought by retail consumers.

Their item finder App and grocery pick up ensure customers have value-adds that make shopping more enjoyable and easier. This is supported by Porte (2008) who states that one needs to offer better value through wider product accessibility to limit the threat of substitutes. Another business strategy by Porter (2010), is differentiation through a highly skilled product development team and a strong sales team. Walmart Inc. employs this strategy through its support for staff’s education advancement, by supporting school fees payment for employees who wish to advance their study in a field that is in line with the company’s strategic objectives. This empowers them with enhanced skills, knowledge and confidence that goes towards product innovation and excellent customer service.

Conclusion

A successful business does not only arise from profits but also good employee welfare, innovation, customer satisfaction, and attention to its surrounding environment. Walmart Inc. has taken this holistic approach, hence the realization of its position as a world leader through its highly trained and empowered workforce. Hunt (2010) states that successful companies result from what leaders can get their employees to do. Lastly, the company’s customers are placed at its core, it engages in environmental sustainability and adherence to compliance, in addition to the generic strategy of low prizes. All this bring about differentiation which explains the success it has achieved. Generic strategies each have attributes that can serve to defend against competitive forces (Porter, 2010).

References