Business Management
Nikki Olu
Walmartbusinessessay1ppp.pptxWalmart
Business Essay
From an idea to a Fortune- A strong desire to achieve has created opportunities impacting millions. How did Walmart gain the #1 spot on Fortune 500? How have they remained profitable while expanding globally? The convenience of the one stop shop and low prices have made Walmart a household name. Walmart have never changed its strategy in keeping prices low even in changing market conditions.
An organization that provides goods and services is considered a business. Businesses are either:
For-profit : Aim is to make money(profits)
Not-for-profit: Goal oriented
Considers consumers member
3
Factors of Production are resources that keep the business sustainable. These are:
Natural Resources: unaltered E.g.- land, gas, trees
Labor : Mental or Physical
Capital: Accumulation of inputs used to produce outputs. For E.g. –computers, tools
Entrepreneur: Individual(s) who starts the business
Fig#1: Sam Walton(corporate.walmart.com)
Walmart is a profit-based organization started by Sam Walton in 1962. Ranked #1 on fortune 500. (Fortune.com)
“Sam operated on the premise of high volume through lower prices, and it worked.” ”. (Dan, April 2020, para 2)
Sam Walton did his research and sourced suppliers and invested into his business. He with the assistance of his wife invested 95% of the capital in the business.
Walton believed running a successful business boil down to 10 simple rules.
Walmart started as an idea that has developed into A global business with various franchises (e.g., Sams Club).
Link: https://corporate.walmart.com/10-rules-for-building-a-better-business (corporate.walmart.com)
Stakeholders : Individual/s with a vested interest in the organization
Internal : Works directly in the business
e.g. Owners and employees
External : individuals who don’t work in the business but affected by business decisions.
E.g. Suppliers, Customers, Government entities
Walmart is the world’s largest private employer; with 2.3 million workers globally, of which 1.6 million are employed in the U.S. (fortune.com).
Even though Walmart has the record for being largest employer, they have also been accused of employee mistreatments such as poor working conditions, wrongful terminations and low wages.
“Walmart has faced accusations involving poor working conditions for its employees. For example, a 2005 class action lawsuit in Missouri asserted approximately 160,000 to 200,000 people who were forced to work off-the-clock, were denied overtime pay, or were not allowed to take rest and lunch breaks.[68] In 2000, Walmart paid $50 million to settle a class-action suit that asserted that 69,000 current and former Walmart employees in Colorado had been forced to work off-the-clock”. (Wikipedia, Feb 2022, working conditions).
Business functions are separated according to expertise which allows efficiency and efficacy.,
Sales and marketing: -Responsible for Customer relations. They are the liaison between the business and the marketplace E.g., social media, press conference.
Management: Managers are tasked with managing people’s day to day performance. Management function is normally lead by the CEO
Finance: The Financial Department is where any decision that has to do with the company’s funds are made. Financial goals, investments, loans, Government
Research and Development: Research and development is at the forefront of the business seeking new information which will keep the business ahead of the competition.
Operations: Operations control outflow quantity and quality. Managed by Chief Operating officer.
Walmart’s organizational structure is defined by the company’s business activities. Walmart follows a Hierarchical functional organizational structure or commonly known as a ‘matrix’ organization at the store level which is a blend of other two types of organizational structure known as divisional organizational structure and functional organization (Richard 2019)
Globalization is the interdependence of the world’s economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and flows of investment, people, and information.
A business/ nation may have absolute advantage or comparative advantage and leverages these to maximize factors of production.
Acquisitions, joint ventures, strategic alliances, Foreign Direct investments, Importing and exporting, franchising, licensing and Trading are ways in which businesses enter Global market. Trading can be Transactional or counter trading: - for ex barter.
Global trading can be affected by:
Legal differences,
Political economy,
Sociocultural differences,
Physical and environmental force
Restrictions such as tariffs and embargos
Cultural practices, Customs and taboos, government stability, compatibility with Infrastructure and technology are all important factors to know.
Walmart opened its first international store in Mexico City. It was through a 50-50 joint venture. Then went to Latin America with a 60-40 joint venture. Walmart entered Argentina through a wholly owned subsidiary. Walmart is now operating over 3000 stores worldwide. Walmart has been experiencing steady increase in profits. (V Govindarajan and A. K. Gupta)
Sales worldwide 2018-2022 Statista 2022
Walmart international market (statista 2022)
Its fascinating how an idea has developed into a major retail giant. Walmart began in the United States as a single discount store, whose model was to sell more for less. Nowadays, Walmart discount stores, supercenters, and neighborhood markets around the world.
SWOT analysis is a planning tool used by managers. It stands for Strengths, Weaknesses, Opportunities and Threats.
Strengths (S) and weaknesses (W) refer to internal factors, which are the resources and experience readily available to you
Opportunities (O) and Threats(T) are considered external factors which the business has no control over.
Uses of SWOT : - Exploring new initiatives
Changing plans, revamping internal policies
To improve current landscape of Business operations
(Schooley Dec 2021)
Most important decision an individual will make when starting a business is deciding on the type of business they want to start. Some questions to consider are:-
Are you a risk taker? Do you want to be a sole Proprietor? Can you be apart of a partnership? Do you have investment capital? Are you aware and can afford the taxes and legal requirements of a corporation? Are you interested in making a profit? Do you want to start from scratch or be apart of a franchise? These are some of the questions that are vital to ask before starting a business.
Types of Business Models are:
Sole proprietor
Limited Liability company
Corporations
Partnerships
Franchises
There are different requirements and regulations that govern each type of legal entity.
At the beginning when Walmart was just an idea Sam Walton knew he wanted a For- Profits business. He knew what the customers wanted, and he had an idea of how to supply it. He gained experience and secondhand knowledge while employed at target. Walmart started with just one location and is now a retail giant with discount department and grocery stores in 24 countries worldwide. This makes the point that the legal entity selected at the beginning of the business can be adjusted as the business expands. (fortune.com)
A small business is an entity that is independently owned and operated by an Entrepreneur. It may have fewer than five hundred employees.
An entrepreneur is an individual who creates a new business, bearing most of the risks (Stress, Financial risk, Time Commitment) and enjoying most of the rewards (profits, independence and lifestyle).
An entrepreneur must be a risk taker, good decision maker, self-starter, determined
Guidant 2022
The figure above illustrates Small businesses and the impact of Covid. The age ranges, funding, motivation behind opening a small business and survival expectations.
A business plan is a formal written document containing the goals of a business and method of attaining them along with the timeframe for achieving them. A business plan generally contains Executive Summary, Company Description, Market Analysis, Organization, and Management, Service or Product Line, Marketing and Sales, Funding Request, Financial Projections, Appendix
Fig#5 (Covington, July 2021)
Small businesses are not without struggles and The Graph illustrates some of the challenges small businesses face that has caused many of them to close down.
Managers are responsible for monitoring and controlling the daily functions of the organization Management functions differ based on level , skill and organizational structure.
There are three Management categories:
Technical Skills: A technical skill is defined as a learned capacity in just about any given field of work, study play.
Conceptual Skills – Critical Managerial function
The ability to generate ideas creatively and intuitively and show comprehensive understanding of contexts or topics. Relevant to upper-level management who is: -
largely tasked with identifying and drafting a strategy for the broader operational and competitive approach of an organization.
strategic planning
includes generating organizational values,
policies, mission statements, ethics, procedures,
objectives upper managers need to possess strong conceptual skills
Human Skills: - combination of social, interpersonal, and leadership skills
Three management levels:
Top Managers: highest level of managers within an organization. Tasked with setting organizational objectives and goals. E.g. – CEO, Operations Manager
Middle Managers: Middle managers identify and implement the activities that will help the organization achieve its goals and oversee front-line managers.
First line Managers: First line Managers are responsible for supervising non- managerial employees who are engaged in the tasks and activities developed by middle managers. They report back to middle managers
Controlling is an important part of a manager’s job. It helps managers determine the success of planning, organizing, and leading. control systems direct employee behavior toward achieving organizational goals and provide a means of coordinating employee activities and integrating resources throughout the organization. Managers uses different ways to motivate workers. Peter Drucker Suggested S.M.A.R.T. to measure operational objectives.
Motivation encourages employee engagement. Employee motivation is heavily influenced by social factors. The distinct connection between human motivation and employee performance can be traced back to the discoveries of the Hawthorne studies.
“Mayo discovered that workers were highly responsive to additional attention from their managers and the feeling that their managers actually cared and interested in their work.”(text)
“According to the Bloomberg and Journal articles, Walmart has been working to appease senior workers by giving them more desirable hours, more paid time off and offering training programs to help them advance their careers”. (retailwire.com 2022)
An entrepreneur can turn an idea into an international business. It takes investment, and a plan. Its important to know market trends and adjust the business’s goals accordingly. With globalization businesses have access to international markets. Technology has created new inventions and influenced the consumer shopping. Self-checkout, ecommerce to name a few. To achieve and remain successful is not without challenge. Businesses contend with Internal and External forces daily. This concludes my presentation.
References:
Walmart Global Chart and Retails sale Graph https://www.statista.com/statistics/269424/total-number-of-stores-of-walmart-international-by-country/ ,
Walmart Mistreatment of employees https://en.wikipedia.org/wiki/Criticism_of_Walmart#:~:text=Walmart%20has%20faced%20accusations%20involving,take%20rest%20and%20lunch%20breaks
Criticism of Walmart, 10465 https://en.wikipedia.org/wiki/Criticism_of_Walmart
Taylor Covington Updated July 8, 2021, Small Business Statistics in 2021: Reports and Facts | The Zebra
2021 Small Business Trends & Statistics | Guidant Financial
Walmart | 2021 Fortune 500 | Fortune
1 new message (assignmenthelp4me.com)
DAN July 2016 July 2, 1962: First Walmart Store Opens; Disaster or Godsend? - History and Headlines
David Richard, P. (2019) Walmart organizational structure and chart https://assignmenthelp4me.com/article-walmart-organizational-chart-461.html
Skye Schooley Dec 2021 SWOT Analysis: Definition and Examples - businessnewsdaily.com
