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Strategy & Decision Making
Wal-Mart has become a global corporation. The company's primary vision focuses on a more global presence and promotion of the organization's ethical culture across global stakeholders. The company's concept of a vision statement focusing on a culture of ethics is vital in globalization. The company has embraced diversity and culture in their global operations thus leading to a competitive advantage and good reputation. By promoting a culture of ethics, Sam Walton has assisted stakeholders and customers to make informed decisions thus doing the right thing (Griffin, 2012).
Wal-Mart's mission statement focuses on quality customer service, striving for excellence and respect for individuals. Therefore, based on their core beliefs and values, the mission of the company emphasizes on the provision of daily low prices and exceptional services to customers. The company has managed to uphold their business for long because the top executives and managers work hard and implement strategies that align with Wal-Mart's beliefs. The company's vision and mission statement have given the management a foundation for taking effective decisions and implementing them. Further, their mission statement is challenging and competent thus fundamental in steering and directing Wal-Mart's affairs (Hitt, Ireland & Hoskisson, 2009).
Audit of the internal and external environment
Late Entry: even though the company has already penetrated into foreign markets and plans to continue with the trend, they are still trailing behind their competitors. Most European food retailers such as Ahold and Carrefour have a couple of extensive global experience than any other company in the industry. One of the major competitors for Wal-Mart in the global retailing industry is the giant Carrefour. While this company has already penetrated into over 30 markets across the globe, Wal-Mart has only entered into nine countries only. This case draws the advantages associated with first come first serve. Carrefour is already serving the best locations. New entrants such as Wal-Mart must develop new strategies of persuading customers to shop at their stores (Husted & Allen, 2011).
Overlook industry players: Wal-Mart should come to the realization that they are new in the global market. On the contrary, the company has a strong belief in their strength, which is prices and size. Their large stores have judged the company's intensity. Although the company is set to enjoy a powerful presence in the U.S., this is an extraordinary rule, which has failed to fit. At the time of the company's entry, the industry already had powerful competitors who had invested in store automation. Wal-Mart misread the cultures and competitors: this led the company to make various poor decisions in global business (Griffin, 2012).
Suppliers: Wal-Mart is facing a major problem of relating with its suppliers in international markets. To begin with, Wal-Mart attempted to apply similar standards they applied to local suppliers in the U.S. market. Obviously, relationship among manufacturers and retailers in foreign countries differ from those in America. In the U.S., Wal-Mart is the leading retailer and its sets conditions and rules which all suppliers must follow. Wal-Mart is responsible for setting standards and prices in the U.S. market. For this reason, the company purchases and sells cheaply. However, the company has been banned by some manufacturers in some foreign countries because of their attempt to sell large volumes of products at extremely low prices. This was an extreme reaction. Some of the local suppliers have refused to sell products or give discounts to Wal-Mart. In addition, some distributors have refused to supply products to the company's distribution centers. Inventory control problems and irregular deliveries led to shortage of products in Wal-Mart shelves (Power, 2010).
Government policies and Regulations: In the world of business, it is mandatory to deal with government policies and regulations. When the company is operating it the U.S., it becomes powerful; when it moves to another country, it becomes a foreigner. Wal-Mart witnessed this problem when it entered the Chinese market. China's population is approximately 1.5 million and their cities add up to 170 cities. Despite Wal-Mart's early success, the company was plagued by challenges, which defied quick solutions. Such problems included strong foreign and local competition, supply chain problems and massive red tape of the government. We are all aware that policies and regulations created by communist nations are very limited and strict. Communist governments have boxed foreign food retailers into some countries to strict competition policies. Further, only local suppliers are authorized to nominate and control selected products. For example, favorite vegetables of the Chinese must be bought from nearby suppliers (Michaels, 2011).
Unique concepts and culture: Wal-Mart failed internationally because of their attempt to shift their unique retailing and culture concepts to every new country. In their global expansion, the company has been trying to launch their supercenter concepts. Nevertheless, not all concepts match across the globe especially in Brazil. Most populations in Brazil live in small areas and own tiny storages thus they do not have adequate room to store bulky merchandize. It is obvious that Wal-Mart's supercenter concepts cannot fit into such a country. In spite of making adjustments and creating new concepts, the company does not pay attention to variations in culture and continue to enlarge their culture form one country to another. This has made the giant food retailer make losses. Their popularity of large volumes of sales is not making any reasonable impact (Power, 2010).
Human Resource Management: Wal-Mart is likely to face one major problem arising from the community and union groups. Although Wal-Mart has not been forced to engage in unions, the company is being hurt by these problems. Unions are complaining that Wal-Mart stores have taken advantage of their employees. Apart from income given to employees, they are not entitled to any other benefits or health insurance. Evidently, the company's employees are giving Wal-Mart high performance, but they are not being paid proper benefits and income. In fact, they are being given very low pay. In addition, workers are not being paid for working overtime. In 2004, Wal-Mart was judged: the court ruled that the company must pay workers for their overtime work. Workers who were coerced to work overtime without being paid advanced this ruling. As a result, the company is attempting to decrease the number of full-time workers to promote their employees to join unions. This has aided Wal-Mart in eliminating the biases of unions (Sinofsky, Steven & Iansiti, 2009).
Sam Walton announced that Wal-Mart has five long-term objectives:
Expanding the company's efforts of sustainability
Developing talent, with a great focus on minorities and women
Building an international internet business
Maintaining low costs and passing the savings of the customer
Expanding through adding customers, acquiring other retailers and setting up new stores
Selected strategy and Implementation
Sam Walton focused on increasing its international presence on the internet especially in the U.S. And Chinese markets. He says that these efforts must be extended to all global markets where the company has set stores. This strategy will be implemented through combining all the stores, the logistics and systems expertise into a single regular channel that fosters growth and serves global customers. Wal-Mart will also engage in developing diverse management and strive to attain great sustainability goals; this is what customers desire to see. This strategy has placed the company at the best position for the next generation of customers (Hitt, Ireland & Hoskisson, 2009).
Control and feedback
A major control and feedback mechanism that Sam Walton used is the everyday low process for their products. This control mechanism has been a force, which has exerted control in the company's stores. Wal-Mart does not have competitive pricing thus have been able to attract a huge customer base. The company's performance is impressive because, through their low prices, they have beat competition in the industry. Communication is…[continue]
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