Strategic Management and Strategic Competitiveness

Strategic Management and Strategic Competitiveness

Wal-Mart

Assess how globalization and technology changes have impacted the corporation you researched.

Wal-Mart is an enormous global competitor that operates a large network of discount department stores and warehouse stores in many markets. Wal-Mart has made the Forbes list of top companies as the world's 18th largest corporation; Wal-Mart is also the world's biggest private employer in the world, boasting over 2 million employees, which makes the company the world's largest private retailer (Faber, 2012). Wal-Mart's operations management and logistical systems are among the most developed in the world.

Wal-Mart has already invested tons of capital into the development of distribution channels that are more advanced than all of the other firms in the industry. Wal-Mart was a leader in applying RFID technology to their logistical systems and Wal-Mart is continuing to develop the technology and automate much of its distribution processes. Wal-Mart will further exploit the advantages that technology can provide in their global operation that operates worldwide. Globalization has also been behind Wal-Mart's growth and a substantial portion of their revenues are from foreign markets. Thus, investments in technology that allow Wal-Mart's supply chain to be more efficient in the transportation, inventory management, operations management, or management of perishable goods can either make the company more competitive in global operations.

2. Apply the industrial organization model and the resource-based model to determine how your corporation could earn above-average returns.

Wal-Mart has also expanded into many international markets and the business model has been successful in almost all the markets they have entered with their focus on cost and convenience. In these markets Wal-Mart's logistical systems have imitated the same technologies and process that it has developed in the domestic market. Having this type of internal knowledge base about distribution systems has allowed the company to develop in many international markets at an exceptional pace. Thus it can be said that Wal-Mart has acquired internal resources that provide a competitive advantage and allow the firm to earn above average returns in the resource-based model.

The Wal-Mart model is entirely is based on low cost and efficiency and this drives the operational strategy of the organization. For example, Wal-Mart has no-frills stores that are based on a generic template and only use a very basic retail footprint. This allows the operation to standardize much of the floor plan and inventories carried to reduce costs. Furthermore, the business produce so much inventory turnover that it allows them to have more flexibility that many of their smaller competitors. Wal-Mart has introduced this model into markets that are receptive to the low cost retailer. Thus while some of its profitability could be attributed to the resource-based model, the industrial organizational model could also be used to account for the company's success due to external factors.

3. Assess how the vision statement and mission statement of the corporation influence its overall success.

Wal-Mart emphasizes that its vision is simply saving people money so they can live better, and Wal-Mart leaders have made it their mission to embed this vision in into all aspects of the business. Its stated philosophy and overall business strategy relies on a simple idea created by founder Sam Walton: offer shoppers lower prices than they can get anywhere else, and it is this basic strategy that has shaped Wal-Mart's culture and driven the company's growth to its position as the world's dominant retailer (Walmart Corporate, 2012). Although the concept is fairly simple, Wal-Mart's vision has definitely proven to be successful. The next stage of Wal-Mart's vision will work on making the company more resource efficient and sustainable.

Figure 1 - Income Statement (Yahoo Finance, 2013)

4. Evaluate how each category of stakeholder impacts the overall success of this corporation.

In 2010 Wal-Mart announced that it would begin to re-organize its domestic operations into three separate domestic U.S. operations which are divided into three geographic units. Each of these geographic units will have their own president to oversee their divisions operations (Zwiebach, 2010). This reorganization has dramatic implications for both internal and external stakeholders. These divisions consist of Wal-Mart West, Wal-Mart North, and Wal-Mart South. Within each division there are also different leadership structures to address the operational categories such as Logistics, Real Estate, and Store Operations.