Wk 7 Walmart Audit (COMPLETE PACKAGE)

WALMART OPERATIONAL AUDIT 7

Walmart Operational Audit

Marcos Vazquez

DeVry University

Walmat Operational Audit

Introduction

Walmart is one of the biggest multinational companies in the world and the largest retailer in the USA. Walmart is famous for its low-priced products and as such, it has experienced immense success over the years since it was founded. Regardless of its immense success, Walmart still faces some challenges owing to some internal conflicts and processes that are not as streamlined as they should be.

Current status

Walmart is one of the largest retailers in the world and the largest retail store in the USA. Presently, Walmart operates more than 4,000 stores worldwide dominating in the US, Canada, Mexico and United Kingdom’s markets (Walmart, 2011). Walmart sells fashion items, family apparel, fabrics, toys, health & beauty items, home and food items among an array of other products. Based on its low-cost structure, Walmart strives to save its customers’ money by selling quality products at an affordable price as compared to its competitors; as such, the retailing giant has a comparative advantage over the competition. Walmart’s pricing attracts a lot of customers who are often likely to shop again because of the service offered by the retailer (Yang, 2009). Walmart is customer focused, as it is evident from its slogan ‘Save People Money So That They Can Live Better Lives’. The slogan is the driving force behind every decision that Walmart makes concerning its business operations.

When Walmart was founded in the mid-20th century, it started its operations as a retailer of housewares, clothes, toys and sports equipment. However, owing to its immense success, it has expanded its service offerings to include automotive parts, repair services, pharmaceuticals, jewellery, photo editing & processing, tours & travel and many other multi-sectoral services (Walmart, 2011). The company is competing with other players in every region that it conducts business. By doing so, Walmart has been able to retain market dominance and effectively surpass the competition to emerge as the top retailer in almost every market it operates in.

Walmart Corporate Strategy

One may wonder how Walmart is capable of selling its items at low prices and still remain productive by achieving high-profit returns. One strategy that Walmart has implemented is optimization of its supply chain (Walmart, 2011). The company gets quality products from its suppliers at lower prices through bulk purchases. By so doing, economies of scale are attained as the company can procure more for less than procuring fewer products at a time. Another way it is able to reduce procurement cost is by reducing supply costs. Walmart has come up with a new mode of supply where it does bulk supply to the various Walmart stores across the many regions it operates. To do this, Walmart has several warehouses where most of the products destined for various stores are shipped to (Walmart, 2011). Thereafter, the products are then distributed to various retail chains across the region supplied by the warehouse. By so doing, the company cuts down on inventory and supply costs as most of the supply chain is decentralized.

Workforce is one of the main drivers for any business that is serious on making profits and staying afloat. Walmart is successful as a retailer majorly because of its employees and the management strategies the company uses (Hoovers, 2013). The management of Walmart impresses upon its employees the need to sell the company’s corporate culture of catering to the family unit and therefore has to maintain a conservative and acceptable standard that will make more and more families shop at the retailer’s chains. The Human Resource department prides itself in being able to create a good relationship between the supervisor and the employees working at the store. The company encourages employees to give suggestions concerning how they would like the company to meet their needs and improve customer satisfaction (Walmart, 2011). At the company, employees are referred to as associates, a term which makes them feel like they are a part of the business; by so doing, the workforce feels that it is responsible for the success of the company and therefore, will strive to be successful in service delivery and policy implementation. Additionally, Walmart publishes an internal magazine which is accessible to the employees of the company. The magazine contains a variety of policies, procedures and projected variables concerning Walmart’s business operations; simply put, the magazine updates the employees on the success of the company and steps that should be taken to ensure continued success (Bianco, 2014). The other factor that contributes to high customer service satisfaction is the fact that the company conducts extensive training of its employees. Thus, the employees are able to deliver better services to Walmart’s customers.

To motivate workers and create a good rapport among them, the company has developed a hospitality policy (Yang, 2009). The policy contains guidelines and activities that pertain to the employees and customers of Walmart. One such policy is the ‘Ten Foot Rule’ where an employee has to tend to a customer who is within ten feet of where they are; the employee must greet, smile and tend satisfactorily to the customer’s needs. The company also encourages employees to engage in morning routines where they greet each other, recite the company policy and be friendly to each other. Additionally, with regards to customer service, whenever a customer asks a question either through the website or in person, the employee that was addressed must answer the customer’s question within 24 hours. The policy applies to all employees, whether in the highest or the lowest hierarchy.

Walmart enjoys giving back to society through supporting charitable organizations, running community projects and so on. By supporting the communities where they are conducting business, the company is essentially giving back to the society as a way of being grateful to the members for their support to the business (Bianco, 2014).

Walmart’s Competitive Strategy

Walmart is a very competitive company and its main aim is to be able to dominate every market that it conducts its business in (Walmart, 2011). The competitive strategy is evidenced by the method the company uses to measure its success; through the sales it makes and dominance over the competition, it strives to win in every sector it conducts business in. As such Walmart’s competitive strategy is to sell its products at low prices, beat the competition and expand its business operations. The company is big on expansion as one of its major aims is to expand the stores in areas that are operational, diversify into other areas of retail sector and build more stores in areas that it is not operating in. The corporate culture is the main proponent of the company’s competitive edge. Walmart’s corporate mission is to maintain the same culture in all its stores by marinating the low prices it is famous for and providing quality customer service to all its customers. As Sam Walton, the founder, envisioned, Walmart has three core beliefs that run the company; respect for individuals working at the company, good customer service and to strive for excellence in any venture that the company commits to do (Hoovers, 2013). Respect for individuals encompasses all the employees working for Walmart, regardless of the hierarchy. As such, all Walmart employees strive to co-exist peacefully among themselves. Good customer service does not only entail service delivery but also the company’s commitment to offer quality products to its customers at affordable prices. Striving for excellence is more self-explanatory as is evidenced by the company’s thirst for expansion and market dominance over its competitors.

Analysis

Walmart is a good company as it caters to both its employees and customers, however, there are some issues that should be examined and remedied. One of the issues is labour relations; the company has problems in shift scheduling, wage remuneration and workplace rights for its employees (Yang, 2009). The company is opposed to its employees joining labour unions and this fact causes friction between the management and most employees as they feel that they are mistreated at their workplace. The company could focus on addressing issues regarding its employees’ rights. It should conduct a thorough operational audit in which it will identify the main issues facing employees, the risk that the issues pose to the company and come up with mitigation strategies to deal with them.

Conclusion

Walmart is a fairly successful company; it has achieved tremendous success throughout the years it has been operational. The company needs to streamline some of its processes and issues arising from employee complaints so as to maintain and break new success heights.

References

Bianco, C. (2014). Walmart Strategic Audit. Slideshare.

Hoovers, I. (2013). Walmart Stores Inc.

Retrieved March 06, 2018, from; Hoovers: A D & B Company.

Walmart 2011 Annual Report.

Yang, F. (2009). Strategic Analysis of Walmart. Retrieved on March 13, 2018 from

http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.900.7982&rep=rep1&type= pdf.