Introduction
Strategic management is at the heart of organizations whereby the management is responsible for making strategies that enhance the competitiveness of a firm. The kind of strategy chosen largely determines the performance of a company. This paper is going to analyze the strategic management and strategic competitiveness of Walmart by examining how technology and globalization have impacted the retailer, the application of industrial organization model and the resource-based model, the impact of stakeholders, as well as the vision and mission statements influence on the overall success of the retailer.
Globalization
The growing interdependence of the world economies, populations and cultures have brought about cross-border trade in goods and services. Walmart started off as a small grocery store in 1962 in Arkansas, United States. The small grocery shop grew in size and started expanding internationally. Globalization journey for Walmart started in 1991 when the retailer opened its first international branch in Mexico. The retailer has grown in size to become one of the most globalized companies in the world with more than 10,500 outlets spread in 24 countries. The strategic move to increase its presence globally is to grow sales and profits. However, globalization has brought about increased sales, but it has also presented Walmart with a myriad of challenges. Globalization has resulted in intense competition for Walmart as it faces stiff competition from established retailers like Carrefour of France and local retailers in different markets.
Globalization has also seen Walmart adjust its strategies since “a one size fits all” approach cannot be applied in the global market. Geographical distance between china and the United States has resulted in reduced profits. These two countries are culturally different, meaning that different strategies have to be adopted to succeed in these markets. Walmart competitiveness and strategy is also affected by globalization through exchange rates whereby fluctuations in exchange rates reduce Walmart profitability.
Technology
The advancement of technology has turned to be a blessing for Walmart which has adopted technologies to improve efficiency. Walmart has benefitted from automation whereby the retailer has implemented the radio frequency identification (RFID) in its supply chain whereby movement of goods is traced from the suppliers to the warehouses and to the store. RFID technology has helped Walmart to monitor its inventory. Walmart has also devised Walmart Pay, which is a mobile application to enhance shopper experience. Data analytics technology has also come in handy to help Walmart profile the more than 140 million customers who buy from Walmart every week. Walmart also uses automation technologies through the Scan & Go technology that allows shoppers to scan goods as they pick them from the shelves. This technology has played a great role in reducing the long queues associated with Walmart scores as it helps in faster checking out process. Technology has also made it possible for Walmart to increase its market share through ecommerce as it is able to sell through physical stores and online platforms.
Industrial organization model
Walmart is an industry leader in the retail industry, and it can use its resources through the industrial organization model to earn above-average earnings. The first step of the industrial model requires that firms should choose a competitive industry. Since Walmart operates in the retail industry that is very attractive and competitive, it should look into ways it can minimize the pressures brought about by the external environment. One strategy that Walmart can formulate is to increase its presence in areas where it is largely absent such as in Middle East and the sub-Saharan region. For instance, the retailer can strategize to increase the number of outlets in Malawi, Swaziland and Lesotho. These sub-Saharan countries are rapidly growing, and the number of middle class is growing. Walmart should then use its assets and skills to put the strategy into action. Walmart has tangible resources such as financial resources and intangible resources like reputable brand name and market knowledge. Increasing its presence in these countries can guarantee above-average returns through the cost leadership model.
Resource-based model
The resource-based model is founded on the premise that firms possess different resources that are rare, non-imitable, difficult to imitate and valuable. Being the leading retailer in the world, Walmart possesses valuable, rare and non-substitutable resources such as a network of suppliers. Walmart large size is also a valuable resource because it is able to influence suppliers to provide supplies at low prices, which is translated to the customer through the cost leadership model. Secondly, Walmart large number of establishments in non-imitable, and it is imitable at cost disadvantage. Walmart has penetrated into the market, and it would take years for a competitor to get to the cost leadership position that Walmart has been able to achieve.
Vision statement
Walmart vision is to be the ultimate destination for customers to save money in any manner they want to shop. Overall, a vision statement provides a roadmap of where an organization wants to be. Three main things can be derived from Walmart’s vision, that the retailer provides convenience, low priced goods and that the customer is taken care of. The vision also depicts the flexible nature that Walmart affords its customers by being determined to serve them in any manner they want.
Mission statement
Walmart mission is to help populations around the world to live better and save money, anywhere and anytime. The mission statement is a roadmap of where a company wants to go. From Walmart’s mission statement, it is observable that Walmart strategies are about customers and how the company can create convenience for the customer by allowing them the convenience and flexibility to purchase anytime and anywhere. As such, the strategic decisions have to revolve around the customer, cost savings and convenience.
Stakeholders
Stakeholders are an important group of people who are directly affected by the firm. Internal stakeholders are such as employees, owners, and management. External stakeholders are such as customers, suppliers, government and external investors. Although Walmart has various stakeholders, employees, owners, suppliers, and customers are the most significant groups of stakeholders. The owners contribute capital to finance and implement strategies. Suppliers are another important group who sell supplies and inventory to the retailer at low prices, which is translated to low prices for customers. Customers are another important group of stakeholders. Walmart is one of the most customer-centric corporations, implying that customers are highly esteemed. Walmart recognizes that customers have been important pillars in helping it maintain the lead positions. Walmart serves approximately 140 million customers per week, which is a number too large to be ignored. To keep these customers from going elsewhere, Walmart strives to sell its customers with the lowest possible prices to ensure that they cannot get a better deal elsewhere.
Finally, employees are very pertinent to Walmart and its success. Walmart refers to its employees as associates. While technology has replaced employees in most industries, the retail industry and particularly in customer service is hard to substitute. Walmart associate provide customer service to its customers, a service that can hardly be replaced with technology.
Strategic management is at the heart of organizations whereby the management is responsible for making strategies that enhance the competitiveness of a firm. The kind of strategy chosen largely determines the performance of a company. This paper is going to analyze the strategic management and strategic competitiveness of Walmart by examining how technology and globalization have impacted the retailer, the application of industrial organization model and the resource-based model, the impact of stakeholders, as well as the vision and mission statements influence on the overall success of the retailer.
Globalization
The growing interdependence of the world economies, populations and cultures have brought about cross-border trade in goods and services. Walmart started off as a small grocery store in 1962 in Arkansas, United States. The small grocery shop grew in size and started expanding internationally. Globalization journey for Walmart started in 1991 when the retailer opened its first international branch in Mexico. The retailer has grown in size to become one of the most globalized companies in the world with more than 10,500 outlets spread in 24 countries. The strategic move to increase its presence globally is to grow sales and profits. However, globalization has brought about increased sales, but it has also presented Walmart with a myriad of challenges. Globalization has resulted in intense competition for Walmart as it faces stiff competition from established retailers like Carrefour of France and local retailers in different markets.
Globalization has also seen Walmart adjust its strategies since “a one size fits all” approach cannot be applied in the global market. Geographical distance between china and the United States has resulted in reduced profits. These two countries are culturally different, meaning that different strategies have to be adopted to succeed in these markets. Walmart competitiveness and strategy is also affected by globalization through exchange rates whereby fluctuations in exchange rates reduce Walmart profitability.
Technology
The advancement of technology has turned to be a blessing for Walmart which has adopted technologies to improve efficiency. Walmart has benefitted from automation whereby the retailer has implemented the radio frequency identification (RFID) in its supply chain whereby movement of goods is traced from the suppliers to the warehouses and to the store. RFID technology has helped Walmart to monitor its inventory. Walmart has also devised Walmart Pay, which is a mobile application to enhance shopper experience. Data analytics technology has also come in handy to help Walmart profile the more than 140 million customers who buy from Walmart every week. Walmart also uses automation technologies through the Scan & Go technology that allows shoppers to scan goods as they pick them from the shelves. This technology has played a great role in reducing the long queues associated with Walmart scores as it helps in faster checking out process. Technology has also made it possible for Walmart to increase its market share through ecommerce as it is able to sell through physical stores and online platforms.
Industrial organization model
Walmart is an industry leader in the retail industry, and it can use its resources through the industrial organization model to earn above-average earnings. The first step of the industrial model requires that firms should choose a competitive industry. Since Walmart operates in the retail industry that is very attractive and competitive, it should look into ways it can minimize the pressures brought about by the external environment. One strategy that Walmart can formulate is to increase its presence in areas where it is largely absent such as in Middle East and the sub-Saharan region. For instance, the retailer can strategize to increase the number of outlets in Malawi, Swaziland and Lesotho. These sub-Saharan countries are rapidly growing, and the number of middle class is growing. Walmart should then use its assets and skills to put the strategy into action. Walmart has tangible resources such as financial resources and intangible resources like reputable brand name and market knowledge. Increasing its presence in these countries can guarantee above-average returns through the cost leadership model.
Resource-based model
The resource-based model is founded on the premise that firms possess different resources that are rare, non-imitable, difficult to imitate and valuable. Being the leading retailer in the world, Walmart possesses valuable, rare and non-substitutable resources such as a network of suppliers. Walmart large size is also a valuable resource because it is able to influence suppliers to provide supplies at low prices, which is translated to the customer through the cost leadership model. Secondly, Walmart large number of establishments in non-imitable, and it is imitable at cost disadvantage. Walmart has penetrated into the market, and it would take years for a competitor to get to the cost leadership position that Walmart has been able to achieve.
Vision statement
Walmart vision is to be the ultimate destination for customers to save money in any manner they want to shop. Overall, a vision statement provides a roadmap of where an organization wants to be. Three main things can be derived from Walmart’s vision, that the retailer provides convenience, low priced goods and that the customer is taken care of. The vision also depicts the flexible nature that Walmart affords its customers by being determined to serve them in any manner they want.
Mission statement
Walmart mission is to help populations around the world to live better and save money, anywhere and anytime. The mission statement is a roadmap of where a company wants to go. From Walmart’s mission statement, it is observable that Walmart strategies are about customers and how the company can create convenience for the customer by allowing them the convenience and flexibility to purchase anytime and anywhere. As such, the strategic decisions have to revolve around the customer, cost savings and convenience.
Stakeholders
Stakeholders are an important group of people who are directly affected by the firm. Internal stakeholders are such as employees, owners, and management. External stakeholders are such as customers, suppliers, government and external investors. Although Walmart has various stakeholders, employees, owners, suppliers, and customers are the most significant groups of stakeholders. The owners contribute capital to finance and implement strategies. Suppliers are another important group who sell supplies and inventory to the retailer at low prices, which is translated to low prices for customers. Customers are another important group of stakeholders. Walmart is one of the most customer-centric corporations, implying that customers are highly esteemed. Walmart recognizes that customers have been important pillars in helping it maintain the lead positions. Walmart serves approximately 140 million customers per week, which is a number too large to be ignored. To keep these customers from going elsewhere, Walmart strives to sell its customers with the lowest possible prices to ensure that they cannot get a better deal elsewhere.
Finally, employees are very pertinent to Walmart and its success. Walmart refers to its employees as associates. While technology has replaced employees in most industries, the retail industry and particularly in customer service is hard to substitute. Walmart associate provide customer service to its customers, a service that can hardly be replaced with technology.
