Strategy is at the heart of every company. The top management is responsible or strategy formulation and implementation in a bid to make the company competitive in its industry. This paper is going to explore the strategic competitive of Walmart as the largest retailer in the world to assess how globalization and technology has impacted it, the application of resource-based and industrial organization models to earn above average returns, as well as evaluating how the vision, mission and stakeholder groups impact the overall success of the company.
Globalization
The world is said to have become a global village, which means that the barriers of time and distance have been overcome. That means that people can do business anywhere in the world. Walmart was started in America in 1962, but it has now become a global brand, meaning that it is present in many places across the world. Walmart is present in major economies like the United States, china, United Kingdom, and lately Africa. Global expansion of Walmart has brought with it merits and demerits. Walmart sales revenue has grown over the years, but globalization is also taking a toll on the retailer. Walmart has continued to face competition from other global retailers such as Carrefour of France, ALDI from Germany among others (SEC, 2).
Technology
Technology is changing at a very rapid pace as new things up each day. Walmart was born in an analogue error when most things used to be manual, but the world has become digital. The digital world has brought many revolutions in the world of Walmart’s business. There are numerous ways that technology has affected Walmart such as through automation, website, social media, data analytics, and e-commerce among others. Technology has been influential in enhancing customer service levels at Walmart, thereby improving shopper experience (SEC, 2).
Industrial Organization Model
The I/O model highlights the external environment’s dominant influence on a firm’s strategic actions. Hitt, Ireland, & Hoskisson (1) highlight five steps that firms can use to earn above average returns. The first step entails studying the external environment, locating an industry with high potential or average returns, identify a strategy to earn above above-average returns, develop assets and skills needed to implement the strategy and then use the firm’s strength to implement the strategy.
Resource-Based Model
A firm can earn above average returns by using its resources that are rare, non-substitutable, valuable and non-imitable (Hitt, Ireland, & Hoskisson, 1). Walmart possesses a number of resources such as a reputable brand, numerous locations and vast market experience, given that it has been in the market for 59 years. This experience is too much to be ignored. Walmart can use its strategic locations, renowned brand name and market skills and experience to actualize the strategy of venturing in the food production industry. Goods from the food production can be marketed and sold through the numerous locations.
Vision
Walmart seeks to be the destination for customers to save money, no matter how they desire to shop. The vision depicts concern for customers whereby Walmart strategies are about cost savings to realize cost leadership (Walmart.com, 3).
Mission
Walmart’s mission statement denotes the journey that Walmart will walk to realizing the vision (Walmart.com, 3). The mission is to save people money so that they can live better anywhere and anytime.
Stakeholders
Stakeholders are groups of people who influence and are influenced by a company. Walmart has various categories of stakeholders, but some stakeholders are more influential than others. Walmart ranks its stakeholders whereby investors are ranked as the top priority stakeholders followed by customers, then employees and suppliers (Walmart.com, 3).
Globalization
The world is said to have become a global village, which means that the barriers of time and distance have been overcome. That means that people can do business anywhere in the world. Walmart was started in America in 1962, but it has now become a global brand, meaning that it is present in many places across the world. Walmart is present in major economies like the United States, china, United Kingdom, and lately Africa. Global expansion of Walmart has brought with it merits and demerits. Walmart sales revenue has grown over the years, but globalization is also taking a toll on the retailer. Walmart has continued to face competition from other global retailers such as Carrefour of France, ALDI from Germany among others (SEC, 2).
Apart from competition, global politics have largely impacted Walmart’s earnings such as the trade tensions between the United States and the people’s republic of China. The two countries have had trade accusations and counteraccusations that saw the United States government under the administration of president Donald Trump issue executive orders to stop the sale of Huawei products. Walmart that stocked Huawei products had no option but to oblige, which negatively hurts sales (SEC, 2).
The outbreak of coronavirus disease is another global issue that has impacted Walmart. The disease has devastated the world economy and businesses have not been spared either. The future looks bleak as covid19 takes a toll on businesses and Walmart is no exception. Any plans that Walmart may have had to expand globally have to be evaluated keenly to ensure that the envisioned stars do not become dogs.
Technology
Technology is changing at a very rapid pace as new things up each day. Walmart was born in an analogue error when most things used to be manual, but the world has become digital. The digital world has brought many revolutions in the world of Walmart’s business. There are numerous ways that technology has affected Walmart such as through automation, website, social media, data analytics, and e-commerce among others. Technology has been influential in enhancing customer service levels at Walmart, thereby improving shopper experience (SEC, 2).
For instance, Walmart has installed next-gen buttons whereby customers can call customer service attendants at the press of a button rather than moving all over looking for attendants (SEC, 2). Another notable impact of technology on customer service is the installation of the Scan & Go technology that allows for faster checking out process.
Rather than waiting in the long queues to have the products scanned, the scan & Go technology enables customers to scan products as they take them from the shelves to their bags. Advancement in technology has brought about more sales through ecommerce whereby Walmart is able to sell to customers physically in the stores and online. Advances in mobile applications have seen Walmart develop Walmart Pay, which is a mobile app that allows customers to pay for goods and services at any Walmart outlet.
Rather than waiting in the long queues to have the products scanned, the scan & Go technology enables customers to scan products as they take them from the shelves to their bags. Advancement in technology has brought about more sales through ecommerce whereby Walmart is able to sell to customers physically in the stores and online. Advances in mobile applications have seen Walmart develop Walmart Pay, which is a mobile app that allows customers to pay for goods and services at any Walmart outlet.
Before Walmart Pay, customers used other applications like Apple Pay. Data and analytics technology have also come in handy to help Walmart to profile its customer and understand how its brand is doing in the marketplace. Through analytics, Walmart can know the number of customers who visited their websites and their locations. Such information is very vital for strategic marketing decisions as Walmart can know how to convert such visitors into real shoppers.
Industrial Organization Model
The I/O model highlights the external environment’s dominant influence on a firm’s strategic actions. Hitt, Ireland, & Hoskisson (1) highlight five steps that firms can use to earn above average returns. The first step entails studying the external environment, locating an industry with high potential or average returns, identify a strategy to earn above above-average returns, develop assets and skills needed to implement the strategy and then use the firm’s strength to implement the strategy.
Walmart operates in the retail industry which is very competitive. Walmart can decide to venture into an unrelated industry that has high potential for above average returns. Walmart can venture into food production industry which is an attractive industry with high potential for above average returns (Hitt, Ireland, & Hoskisson, 1). Walmart then should identify the strategy linked with above average returns such as acquiring a food production company rather than starting operations from scratch. The next step is acquiring resources and assets to implement the selected strategy. Walmart has financial resources necessary to acquire a food production company, and then Walmart should take advantage of its many locations to sell the products produced.
Resource-Based Model
A firm can earn above average returns by using its resources that are rare, non-substitutable, valuable and non-imitable (Hitt, Ireland, & Hoskisson, 1). Walmart possesses a number of resources such as a reputable brand, numerous locations and vast market experience, given that it has been in the market for 59 years. This experience is too much to be ignored. Walmart can use its strategic locations, renowned brand name and market skills and experience to actualize the strategy of venturing in the food production industry. Goods from the food production can be marketed and sold through the numerous locations.
Vision
Walmart seeks to be the destination for customers to save money, no matter how they desire to shop. The vision depicts concern for customers whereby Walmart strategies are about cost savings to realize cost leadership (Walmart.com, 3).
Walmart operates a customer centric culture whereby the ‘customer is king’ mantra reigns. As such, the strategies formulated are aimed at creating value for customers as customers are an essential part of the retailer’s success.
Mission
Walmart’s mission statement denotes the journey that Walmart will walk to realizing the vision (Walmart.com, 3). The mission is to save people money so that they can live better anywhere and anytime.
The mission statement highlights two important features; people and money. As such, the strategies formulated have to be about customers, herein referred to as people and cost leadership; herein referred to as saving people’s money.
Walmart’s mission is also customer centered in that the corporation seeks to create convenience by allowing them to shop from anywhere across the globe and at any time. Walmart is leaving no chance as long as creating convenience for customers is concerned, which is the reason why Walmart has made a series of acquisitions for ecommerce companies like FlipKart of India and jet.com in a bid to serve physical and online customers.
Stakeholders
Stakeholders are groups of people who influence and are influenced by a company. Walmart has various categories of stakeholders, but some stakeholders are more influential than others. Walmart ranks its stakeholders whereby investors are ranked as the top priority stakeholders followed by customers, then employees and suppliers (Walmart.com, 3).
Investors are responsible for strategy making and ensuring their implementation to ensure Walmart remains the leader in the industry. Customers are the reason why Walmart exists, and they are considered very significant stakeholders. Walmart business level strategy is cost leadership whereby customers are treated to everyday low prices with quality products. Walmart seeks to capture a large market share as possible with the low prices and the cost leadership model.
Employees are another valuable group of stakeholders who are critical to the success of Walmart. Suppliers are also another valuable stakeholder group who continually supply goods at low prices, which is translated to low products to the final consumers.
