MGT498 Strategic Management Paper

The company is a powerful retail brand with good reputation in its operations in many things. Among these things is value for money, convenience, and a wide range of products in the stores. The company is able to provide a wide range of products at a lower price. Additionally, the company a vast experience in its global operations. This is evident from its fast growth. Walmart enjoys the economies of scale. This makes it easy to sell its products at a lower price.

Weaknesses

Walmart is the biggest and most powerful retailer in the world. It is not very easy for the company to manage such a large empire (Pandya & Arenyeka-Diamond, 2002). Managing such a large empire leaves the organization with many weaknesses due to huge span of control. Operating this large empire reduces the flexibility of the organization. The company has to focus its attention on all the products it has. The good thing with competitors is that they can easily focus on a particular line of products. The other weakness is that Walmart has not established itself so much in the international market.

Opportunities

Attractive opportunities are available to the company. Among these opportunities are merging, forming strategic alliances, acquiring other global retailers. The company should take advantage of the new opportunities that are available in countries, such as European, the Great China, and other another areas. The fact is that the company is operating in only a few countries. There is great growth potential for the company in the international market.

Threats

There is stiff competition emerging from the competitors. Being at top of the market means that each and every player is targeting the company. Competition is stiff both internationally and locally. These competitors are after out doing Walmart in what it knows and does best. Walmart has globalized its operations. Due to this, it faces political challenges in the countries where its stores are located. Such a challenge has the ability to threaten the effective operation of Walmart (Pandya & Arenyeka-Diamond, 2002). There is the issue of price competition arising manufacturing costs have gone down in different regions.

Over the years, walmart has managed to become the most powerful retailer in the world with highest sales per operating profit of any discount retailer, inventory turnover, and square foot. The organization has succeeded in outdoing its competitors in the retail industry.

Competitive advantage of Walmart

Walmart’s competitive advantage is attributed to its efficient and effective supply chain management strategy. It business model is focused on driving costs out of supply chains. This makes it possible for customers to save money and make their lives better. In addition, the organization practices cost leadership business strategy that is made possible through the economies of scale. In fact, there is appropriate use of online sales channels, which makes levels of cost-efficiency to be possible when it comes to retail operations. Notably, there is constant improvement of prices and range of products. The company has enabled customers to choose the most suitable method to purchase their products.

Strategies the company uses to create value and gain competitive advantage

Supply chain management is being exploited positively by Walmart. This makes it create value in its operations. Creation of value and competitive advantage are due to having fewer links in the supply chain. The company purchases bulks products selectively and ensure that it transports the products itself to the stores. Also, there is an initiative termed as Vendor Managed Inventory (VMI) (Govindarajan & Gupta, 2014). This initiative allows manufacturers to manage their products that are in the warehouse of Walmart directly.

Additionally, strategic vendor partnership enhances value and competitive advantage. The company sources its products at the best price and from suppliers who have the ability to provide quality products and meet demand for the company. This is achieved through creation of strategic partnership with its vendors, who provide high volume products at reduced prices.

The relentless pursuit of providing low cost products has made the company embrace the technology. Technology plays a significant role in the supply chain. The company has the largest information technology infrastructure. Tracking inventory and restocking shelves managed by the technology.

Finally, cross docking as inventory tactics play a significant role in making the supply chain management strategy to be successful. Cross docking helps the organization to replenish its inventory effectively and efficiently. The idea of storing products at the docks is eliminated the by the company.

The measurement guidelines the company uses to verify its strategic effectiveness

Measurement guideline for Walmart has been designed to utilize previous results. Due to this method, it becomes easier to know whether the plan is properly working as it is required. There need to be well defined goals as well as checkpoints so as to determine whether the strategy that has been formulated should be changed or modified in order to attain the results that are desired. The measurement guideline used by the company has been good in determining whether its strategy is effective (Brea-Solis, Casadesus-Masanell, & Grifell-Tatje, 2012). Some of the measurement strategies used by Walmart are annual customer satisfaction, revenue growth, and growth in other performance metrics.

Effectiveness of the measurement guidelines

The measurement guideline used by Walmart allows the company to establish and monitor the results of their strategies that are formulated. Over the past years, the company has seen good performance and growth. This is because the management ensures that the strategies implemented are working effectively. Those that are not effective are either replaced or modified. The company is continuously moving forward with its competitive advantage strategy. Some setbacks have been experienced by the company when it comes to its strategies that are implemented. However, the good thin g is that the problems that arise are usually detected very early before they grow out of hand.

References

Brea-Solis, H., Casadesus-Masanell, R., & Grifell-Tatje, E. (2012). Business Model Evaluation: Quantifying Walmart’s Sources of Advantage. Harvard Business School.

Govindarajan, V. & Gupta, A. (2014). Taking Walmart Global: Lessons from the retail giant.