Week 4 assignment MGT

Table of Contents Introduction 3 Problem Statement 4 As-Is Condition 4 Strategic Planning 5 Demand Planning 5 Supply Planning 5 Warehousing 5 Transportation 6 Analysis 7 Strength 7 Weakness 9 Opportunities 10 Threats 11 To-Be Condition 11 Conclusion 14 References 15 Appendix A 17 Appendix B 18 Appendix C 19

Introduction

There are a lot of stores of supermarkets in this world, and also there are several brands of retailers to enter in global markets. Nowadays, there are seriously dog-eat-dog competitors in the supermarket industry, so these retailers will not just sit in their countries while they work on different fields and create opportunities for their brands. Therefore, they have expanded to do business in different countries. Moreover, they think how to use different methods to sell products and services in this competitive environment. Walmart was established by Sam Walton in the United States in 1962, and is an American company. Walmart expanded to 24 more locations and became a corporation: Walmart Stores Inc., in 1969. Walmart became the Top Retailer in 1990 and earned sales of over 26 billion dollars (O'Connell, 2019). The First International Stores was in Mexico City in 1991 (O'Connell, 2019). In 2006, Walmart sold Their Stores which were in Germany and South Korean to its competitors. Moreover, Wal-Mart Store Inc. changed the Name to Walmart Inc. in 2018 (O'Connell, 2019). Nowadays, Walmart has 8500 Stores in 15 Countries around the World. In addition, according to Fortune.com, Walmart continued being the top 1 of the world’s 500 largest companies for seven years from 2014 to 2020, which rank is based on the revenues. Walmart could be in this position, but it is not easy for them. Because there are a lot of competitors in the Supermarket Chain Industry in this world, Walmart continuously thinks how to enlarge its business. Hence, it started ecommerce in 2007 (Walmart.com).

But Walmart has fallen behind a competitor: Amazon founded on July 5th, 1994. Amazon started its business from an online bookstore in 1994, and was the top 1 of the popular ecommerce in 2018 (ecommerceDB.com). Amazon is a respectful competitor to Walmart because Walmart still has the room to improve its ecommerce business in the platform. Ecommerce business is really challenging to Walmart.

Problem Statement

Walmart has made efforts to be the same with Amazon. Unfortunately, it falls behind Amazon from selling situations as referred to in Appendix B. The reasons are as follows:

(1) Consumers can choose different brands from Amazon, but the choices are fewer from

Walmart.

(2) Customers often received the wrong product which they did not order from Walmart.

(3) Lower customer satisfaction.

As-Is Condition

What is an ecommerce platform? An ecommerce platform refers to a platform that can let people create an online store, sell their products, manage inventories, have payment transactions, and arrange for shipping products. Walmart has a respectable opponent which is Amazon. From customers’ comments, Amazon has multiple choices of brands and has the best services, and Walmart does not. At the same time, Walmart got lower scores on customer satisfaction.

Supply Chain Management Process in Walmart:

Strategic Planning Process

Demand Planning Process

Supply Planning Process

Acquirement & Purchasing

Order fulfillment

Transportation

Warehousing

Figure 1. Supply Chain Management Process in Walmart

Strategic Planning. It is defined as an organization’s strategy and direction in the future, and making appropriate decisions on its resources to achieve the goals that it sets (Collier & Evans, 2013). Currently, Walmart is facing a tough period for the ecommerce business, so it requires the company to re-consider its strategic planning for attracting consumers.

Demand Panning. It refers to estimating the forecast quantity for demand that lets the buyer receive products quickly (Collier & Evans, 2013). There are no negative comments to Walmart for this part. Once its business expands, Walmart will be required to estimate the forecast quantity; it can also consider making promotions to stimulate consumers to make purchases.

Supply Planning. It includes the distribution process and outsource process (Collier & Evans, 2013). The outsource process is finding suppliers who can provide goods with good quality. For this case, Walmart’s Market Department should find more brands to join and sell on the ecommerce of Walmart. The distribution is figured as the short-term strategy, and is connected with outsources which provide products from different locations and are replenished quickly for order fulfillment (Collier & Evans, 2013).

Warehousing. The warehousing of operations management includes allocating resources, space utilization, storing products, dispatching consignments, disposing of products, inventory management, and handling and stacking techniques (Collier & Evans, 2013).

In the article “Walmart: Operations Management 10 Decisions, Productivity,” the author Smithson stated,

In this decision area of operations management, Walmart’s inventory management

involves the vendor-managed inventory model and just-in-time cross-docking. In the

vendor-managed inventory model, the suppliers access Walmart’s information systems to

decide when to deliver goods based on real-time data on inventory levels. In this way, the

company minimizes stockouts.

That is Walmart how to manage the amount of inventory and minimize it (Smithson, 2017). At the same time, it can monitor / control the cost of inventory which reduces unnecessary waste (Smithson, 2017).

Transportation. Transportation operation management refers to the movement of goods when an order is received and the product is moved from the place of origin to a destination. A lot of manpower is required to make order fulfillment. According to corportation.walmart.com, Walmart Logistics Department has 93,000 associates, including 7,900 drivers, and they are in charge of delivering to 163 distribution centers.

Competitive Situation

In the supermarket business, there are a lot of competitors, which means consumers will compare product quality and service. These two matters are crucial because they are relevant to consumer satisfaction. Figure 2 shows consumer satisfaction from Year 2008 to 2019. From Figure 2, we can know that customer satisfaction at Walmart is lower than at its competitors. The data displayed just focuses on Year 2018 / 2019 customer experiences.

Figure 2. Supermarket consumer satisfaction with Walmart in the United States from 2008 to 2019. Retrieved from https://www-statista-com.nuls.idm.oclc.org/statistics/819713/supermarket-consumer-satisfaction-walmart-us/

Consumers complained to Walmart that they received the wrong products, were late receiving the packages, got late refunds, and had immature services (including inappropriate communications). Because of those reasons, Walmart had a lower score of customer service satisfaction than its competitors.

Analysis

According to the book Marketing Management (15th ed.) by Kotler and Keller (2016), there is a method to analyze a firm’s pros and cons called SWOT analysis. What is SWOT analysis? It evaluates a company’s strengths, weaknesses, opportunities, and threats for both internal and external marketing environment (Kotler & Keller, 2016).

Walmart’s SWOT Analysis

Here the paper focuses on the problems which Walmart currently has; then, further analyzes of the effect to the retailer by SWOT Analysis (See the Appendix C).

Walmart’s Strengths:

1. Brand recognition: According to the article by bstrategyhub.com, there are millions of customers visiting Walmart every day and over 60 million products at the online store. Walmart is the most recognized retail brand in this marketing field (bastrategyhub.com).

2. Global business: Walmart has 11,501 stores around the globe which statistics were counted until March of this year 2020 (Walmart.com).

3. Strategic partner: In 2018, Walmart made an announcement that they had established a strategic partnership with Microsoft (Walmart.com). Walmart has chosen Microsoft because Microsoft

can help Walmart on the digital transformation of the retail (Walmart.com).

4. “Every Day Low Prices” strategy: Walmart figures out the balance point that make this strategy to offer the cheapest products to customers (bastrategyhub.com).

5. Global supply chain and logistics system: According to the article “Walmart SWOT analysis 2019 | SWOT Analysis of Walmart,” the distribution and logistics systems are the core competencies of Walmart. This retailer has a good tool which is Information Technology (IT), which helps to efficiently monitor the performances of every product in each store in every country (bastrategyhub.com).

6. Human Resource Management: Employees will take training for developing and managing performance. In addition, Walmart will hire veterans who got retirement already, and there are 170,000 veterans that they have already hired (Gross, 2018). Based on bastrategyhub.com, there is 1% of America’s working population employed at Walmart.

7. Effective resource management: Walmart has efficiently managed their resources which include information systems, supply chain networks, distribution facilities, and skills; Walmart works each part very well (bastrategyhub.com).

8. Strong market power over suppliers and competitors: According to Fortune.com, Walmart has been the top 1 in the largest 500 companies on the globe from 2014 to 2020 (See Appendix A). Walmart has abilities / powers to dominate the supplies and fight their competitors.

Walmart’s Weaknesses:

1. Lower customer service satisfaction: Figure 3 shows consumer satisfaction from Year 2008 to 2019 according to the ACSI report. From Figure 3, the customer satisfaction of Walmart can be seen to lower than other competitors. Causing these results is product quality and service quality which do not achieve the right position they should meet.

Figure 3. Supermarket consumer satisfaction with Walmart in the United States from 2008 to 2019. Retrieved from https://www-statista-com.nuls.idm.oclc.org/statistics/819713/supermarket-consumer-satisfaction-walmart-us/

2. Receiving wrong items: According to Walmart handling this kind of the case, the retailer’s operating process is dependent on customers choosing refund or replacement.

3. Brand limits: There are a lot of competitors in this market such as Amazon which is the top 1 of the popular online / ecommerce store (ecommerceDB.com.). From consumers’ feedback, Amazon has more choices to choose brands / products after comparing with Walmart. See Figure 4.

Figure 4. Most popular online stores in the United States in 2018. Retrieved from https://www-statista-com.nuls.idm.oclc.org/forecasts/646030/united-states-top-online-stores-united-states-ecommercedb

Walmart’s Opportunities:

1. Strategic alliances: Walmart can find some brands / suppliers who have potential abilities to attract consumers; then build up strategic partnerships. They can develop some products by Brand Co-Branding attract customers to make purchases.

2. Technology in a working process: Walmart has the partnership with Microsoft, so Walmart can work with Microsoft to improve their warehousing system (Walmart.com). Microsoft can design the working process system from receiving an order to shipping the product.

3. Enhancing employee’s practices in good communications: New employees join Walmart’s big family, taking pre-employment training before starting their jobs. The Human Resource Department arranges monthly training or quarterly training for communications.

Walmart’s Threats:

1. A primary target of competition: There are a lot of large retail stores, and their qualities are better than Walmart (bastrategyhub.com). For physical stores, Walmart is the top 1 in the Global largest 500 companies. However, competitors such as Target / Costco have higher quality products and a better reputation of treating their employees (bastrategyhub.com).

2. Small-scale online ecommerce sales: Walmart started working online stores late, so it is too late to enter this ecommerce market. From Fisher’s article (2020), the best shopping website is Amazon. There is potential risk for online business.

3. Technical issues on the website: According to complaints of technical issues at Walmart’s website, it has inaccurate information about the products not having inventories, or it ships the wrong items to customers (bastrategyhub.com). However, Amazon has the best system which uses fast, effective, and accurate information to make customers have good experiences for online shopping (bastrategyhub.com).

To-Be Condition

Human Resource Management.

Considering that customer service satisfaction is lower, Walmart’s Human Resource department can make plans and arrange the training to employees. The Human Resource department arranges the training, manages their performance, and rewards them. Because these can give employees motivation, motivation can bring abilities to achieve the company's goals. Rewarding leads to employees having the best production because reward can stimulate them and encourage them to think how to do their best (Samnani, 2014).

The training is for all employees, and includes how to talk and communicate with consumers. Human Resource Managers can make this training monthly or quarterly depending on their duty / level to arrange it. This training should be situational training because this let employees simulate a case of how to handle it. Then employees can get the point and know how to flexibly deal with the case.

Technology Improvement.

Walmart has a strategic partnership with Microsoft. Walmart can discuss with Microsoft how to upgrade their systems for online sales, and how to make connections between systems, RFID labels, and robots. Walmart communicates with suppliers. When they start producing goods, they put RFID label on goods. The system can determine where goods are - in the warehouses, and in which warehouse. Then, the online store can show accurate information.

When the system receive orders, robots can receive instructions from the system and collect products. After collecting, robots deliver these products to a packaging center. Because RFID labels from various manufacturers are sent to each warehouse, the robot can scan RFID labels, and no wrong products will be sent to customers.

Inspection Process.

There are three sections that must be executed in this inspection process. First, these various manufacturing factories have to check that the RFID label matches the actual product. Second, when warehouses at Walmart receive products, the coworkers have to randomly check that the RFID label matches the actual product. Third, before delivering products without packaging, the coworkers have to randomly check that the RFID label matches the actual product.

Quality Management.

Quality management is the action of monitoring that activities or risks are achieved within the due date. Moreover, it sustains a desired level of excellence. At the same time, it determines quality policies, creates and executes quality planning, and ensures to execute quality control and quality improvement. For checking this part, each department is required to make records in the system. These monitoring persons can check the results to make sure that they can keep using a process, or adjust the process, or alter the process.

Promote this concept to employees so they can understand why they are doing this. This concept must let employees buy in; otherwise, they will not follow instructions. Hence, each department follows this concept and explains how important it is.

Strategic Alliances

Walmart is the top 1 of the largest 500 companies, but it is time to change working method / direction. Walmart has a strong competitor on ecommerce business which is Amazon. Becoming a strong ecommerce company is not easy. First, Walmart can find few brands or suppliers who have potential abilities to innovate new products that attract to consumers; then build up the strategic partnerships with them. They can develop some products such as sportswear / fashion clothes / electrical appliances / cookies by Brand Co-Branding fascinate customers to make purchases. Any fancy stuffs can be let consumers make purchases.

Conclusion

From these current results, there are a lot of negative comments about Walmart on websites. However, it is really tough to the retailer. Now, Walmart has a primary competitor which is Amazon. Walmart can learn from its competitors, and figure out why consumers love to make purchase from Amazon. This can help Walmart find strategic alliances from brands or suppliers who have potential abilities; then, it can expand its products by Brand Co-Branding attract customers. Next, this retailer should adjust its working process about delivering the wrong products to consumers. This part can rely on System / Technology Management to improve the current situation. Walmart has a strategic partnership with Microsoft, so it works / probes with Microsoft on how to upgrade its online system and make connections between the systems, RFID labels, and robots because robots can accomplish part of jobs with perfection. Thus, the system receives orders and makes instructions to robots that they can find out all products by scanning the RFID label and deliver the items to the packaging center. Then, coworkers do the final inspection to make sure that the RFID labels match with the products before shipping out. Last, Walmart’s Human Resource Department makes plans for training all employees that it is part of their job descriptions to make arrangement to take training. Having good communication can help to reduce consumers’ bad image of Walmart in their minds. During the training, the coach can involve some situational simulations so that employees know how to handle different situations with appropriate communications. This can gain the hearts of consumers step by step. In the other words, it can improve the score of customer service satisfaction while all parts are improving. Walmart has greater strengths and can use them to create different opportunities. Moreover, it has adequate abilities to overcome this difficult contradiction of ecommerce business.

References

ACSI. (March 3, 2020). Supermarket consumer satisfaction with Walmart in the United States from 2008 to 2019 [Graph]. In Statista. Retrieved July 29, 2020, from https://www-statista-com.nuls.idm.oclc.org/statistics/819713/supermarket-consumer-satisfaction-walmart-us/

Collier, D. A., & Evans, J. R. (2013). OM4 (4th ed.). Mason, OH: South-Western Cengage Learning

ecommerceDB.com. (December 9, 2019). Most popular online stores in the United States in 2018, by e-commerce net sales (in million U.S. dollars) [Graph]. In Statista. Retrieved July 24, 2020, from https://www-statista-com.nuls.idm.oclc.org/forecasts/646030/united-states-top-online-stores-united-states-ecommercedb

Fisher, S. (2020, June 19). The 7 Best Online Shopping Websites of 2020. Retrieved July 29, 2020, from https://www.lifewire.com/shopping-sites-online-3482901

Global 500. Fortune. https://fortune.com/global500/.

Gross, N. (2018, April 02). Wal-mart hires 170,000 vets. Retrieved July 29, 2020, from https://rebootcamp.militarytimes.com/education-transition/2017/05/23/wal-mart-hires-170000-vets/

Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Boston, etc., MA: Pearson.

O'Connell, B. (2019, September 17). History of Walmart: Timeline and Facts. Retrieved July 15, 2020, from https://www.thestreet.com/markets/history-of-walmart-15092339

Our History. Corporate. https://corporate.walmart.com/our-story/our-history.

Rey, J. D. (2019, July 3). Inside the conflict at Walmart that's threatening its high-stakes race with Amazon. Vox. https://www.vox.com/recode/2019/7/3/18716431/walmart-jet-marc-lore-modcloth-amazon-ecommerce-losses-online-sales.

Samnani, A.K., and Singh, P., (2014). Performance-enhancing compensation practices and employee productivity: The role of workplace bullying. Human Resource Management Review, 24(1) 5-16, DOI: https://doi.org/10.1016/j.hrmr.2013.08.013

Smithson, N. (2017, January 28). Walmart: Operations Management 10 Decisions, Productivity. Retrieved July 28, 2020, from http://panmore.com/walmart-operations-management-10-decisions-areas-productivity-case-study-analysis

Walmart SWOT analysis 2019: SWOT Analysis of Walmart. (2019, November 28). Retrieved July 29, 2020, from https://bstrategyhub.com/swot-analysis-of-walmart-2019-walmart-swot-analysis/

Appendix A

https://www-statista-com.nuls.idm.oclc.org/chart/22016/top-10-global-retailers/

Appendix B

https://www-statista-com.nuls.idm.oclc.org/forecasts/646030/united-states-top-online-stores-united-states-ecommercedb

Appendix C

SWOT Analysis of Walmart.

Supermarket consumer satisfaction with Walmart

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 68 71 71 69 72 72 71 67 74 73 72 73 Other

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 76 76 75 76 77 78 76 73 78 79 78 78 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019