Description of the Walmart
Walmart started off as a discount shop over 50 years ago and has grown in leaps and bounds to become amongst the world’s largest retailers. Today, Walmart operates over 11,500 stores all over the world with over 260 million customers. Walmart recorded $482.1 billion in revenue in the 2016 fiscal year. Of the revenue, Walmart returned $ 10.4 billion as dividends to its shareholders. However, over 50% of the shares of Walmart is owned by The Walton Family. The company has employed 2.3 million associates all over the world. The global ethics controls the organization's culture and integrity.
SWOT Analysis in Chart Form
The SWOT analysis of Walmart gives an account of both internal and external forces that are important for the company’s development strategy (Hassan, Sistani, & Raju, 2014). Therefore the ability of Walmart to capitalize on its strength is important based on the SWOT analysis provided below.
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Strength - As a worldwide company, Walmart’s strengths for global growth includes the following internal forces: Global organizational size A global supply chain Highly efficient supply chain Hassan, Sistani, & Raju, (2014) explains, the global organizational size gives Walmart economies of scale which is crucial in funding expansion and growth. With a global supply chain, Walmart is able to have business resilience for risks that are market specific. Due to advanced technology in the monitoring and control of material movements from suppliers to its store. |
Weakness - According Hassan, Sistani, & Raju, (2014), the weaknesses of the company impose some of the challenges it encounters in addressing the threats indicated in the SWOT analysis. Very thin profit margin A business model that is easier to copy The weaknesses here outlined directly relate to Walmart’s generic strategy in which case is a cost leadership strategy. The cost leadership strategy targets reduced profit margin which in effect translates to lower selling prices to attract more sales. The coast leadership strategy is a model so easy to copy and thus vulnerable to competitors. The firm lacks a significant competitive differentiators and relies on its business size to be the competitive differentiator. |
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Opportunities - These are external forces and are mainly about how Walmart can expand as well as improve its business practice. Expanding to developing countries Improving human resource practice Improving quality standards The developing countries today have a high growth economic condition. The human resource criticism against Walmart too does offer an opportunity to improve its employment practice. Finally, Walmart can address the consumers concerns through improving the standards of products sold. They include concerns about quality of low cost products and health effects. |
Threats - The threats that face Walmart are linked to the changes in consumer perceptions about products as well as changing market prices. Aggressive competition Healthy lifestyle trend Lately, there is a trend on a healthy lifestyle. Owing to the fact that Walmart products are non-organic or of healthy lifestyle, it faces a threat from consumer choices. Walmart currently does not give priority to healthy products on the shelves. Also, other competitors may use aggressive competition to take a share of Walmart’s market (Hassan, Sistani, & Raju, 2014) |
A Discussion of the CSFs Chosen for the Walmart
Financial perspective
Walmart can assess the information of their financial performance on the financial statements and annual reports. Based on the assessment, the firm should pick an objective-target initiatives that can reduce the revenue earned every fiscal year. They include an increased return on investment to ensure the corporate remains more profitable as compared to its competitors ( Blocher, Cokins, Juras, & Stout, 2016) . Walmart uses a Cost leadership strategy. This model requires them to sell at lower prices and huge volumes. If they increase their total assets, it will imply a reduced cost due to economies of scale. Increasing employee revenue helps contribute to overall revenue by the firm ( Zizlavsky, 2014) . The firm should maintain its cost-leadership strategy but also capitalize on bulk purchase to take advantage of economies of scale. Walmart should control its cost in a bid to increase returns on investment.
Customer Perspective
On customer perspective, Walmart should target to increase its customer share in the market. Increasing customer base can be made possible by lowering the product prices. Walmart should strive to reduce its prices to the bare minimum possible. This will give a competitive advantage since it does not have any other product differentiation strategy. Also, as a way of improving the customer share in the market, Walmart should increase the customer ratings on its products and services. This can be achieved by ensuring that the products on its shelves are of standards that meet the consumer expectations. Walmart should thus control the quality of products available on its shelves to reduce the number of complaints and ensure customer satisfaction. This can be achieved by putting standards on suppliers that need to be met before delivery of goods to the shelves for consumers. When products meet the customer satisfaction, they often return becoming loyal ( Zizlavsky, 2014) . If Walmart can win the customers’ loyalty, they will have dominance in the market making their sales stable. Customers always want the best at the lowest possible cost so that they can save. If Walmart can meet their expectations regarding quality and price which of course is their strategy, they will earn the loyalty of customers; hence, sustaining their competitiveness in the market.
Learning and Growth Perspective
On learning and growth, Walmart needs to take a number of initiatives. These are basically internal actions that affect the outcome of the business. Walmart should ensure their have a robust workforce that provides services in a manner that meets the needs of its customers there is a need to invest in human resource to have skilled and trained workers to help the organization goals (Kim, Y2013) . Walmart should, therefore, the source for best-qualified labor in the labor market that can positively impact the organization. For instance, the management is usually in charge of day to day decision making of the business. As such, Walmart should seek for well trained and informed personnel to ensure best decision making.
Additionally, Walmart should train and retrain its staff to improve their efficiency and overall performance. Retraining can be done through hiring trainers from outside the organization who are skilled in the relevant sector of need. Employees should also be trained from within, internal training. The internal training can be done by team leaders who have more knowledge or experience in the various field regarding the assessment of the new employees. More than just training, Walmart should tap on the talents of its employees to bring positive changes to its business. Job rotation is yet another aspect of improving the employee skills and efficiency. When individual employees are rotated across different departments, they tend to make use of their talents and have an overall understanding of the firm making them not only multi-skilled but also all rounded ( Blocher, Cokins, Juras, & Stout, 2016) . Employee consultation is also an important factor in improving the growth of Walmart. Different employees are endowed with different skills and have a different background. When they get to be involved in decision-making, them contribute to their diversity to bring about a different perspective that can help grow the business.
Business Process Perspective
On business process, Walmart should reduce administrative cost to ensure a reduction in its operational costs. Also, Walmart should consider reducing average waiting time by clients considerable to make the process of service delivery as fast as possible. The handling time should also be considerably be reduced to enhance service delivery and achieve overall efficient operations (Kim, Y2013) . These can be accomplished by training employees on better and faster modes of operation. Additionally, the employees can be trained on appropriate modern technology that enhances the functioning of the business.
An Evaluation of the Organization/Segment to Determine If It Is Achieving Each of the CSFs
Walmart as a business entity that is determined to remain competitive in the market has made tremendous efforts towards achieving the CSFs. The first CSFs that Walmart has is on financial perspective is to increase revenue by increasing it return on investment by 2% every year. For any business, the sole objective is to make profits. Consequently, the more returns on investments, the better the business performance. With a strategy of increasing asset utilization, increasing employee output and training as well as retraining of staff, Walmart seeks to ensure the overall return of investment records a growing trend with time. Indeed when staffs are retrained, their efficiency is improved ( Blocher, Cokins, Juras, & Stout, 2016). It, therefore, follows that such staff will be able to work with efficiency reducing costs of operation while maximizing the output. Another strategy is to purchase in bulk. Walmart has a competitive advantage of lower prices based on its business model. Purchasing in bulk has helped the firm reduce the prices of products which has given it a competitive edge over its competitors. In the last financial year ending 31st January 2016, Walmart was able to make huge profits to a tune of $482.1 billion posting a revenue growth of $ 60 billion from the previous fiscal year.
Regarding customer perspective, Walmart targets to increase its customer service by 5%. In light of this, Walmart is seeking to improve quality control and stalk a variety of goods to ensure customers’ needs are met. In light of ensuring customers satisfaction, Walmart has established a good network of suppliers that committedly work to ensure a variety of products of quality are supplied to its stores all over the world. Walmart has always been on the leads in assortment and price to ensure that the customers find goods and services conveniently. The firm provides differentiation on access coupled with its low prices to beat the competitors and enjoy a wider market share. Consumers are often looking for affordability and quality as their influence on consumer choice ( Blocher, Cokins, Juras, & Stout, 2016). Consequently, by Walmart ensuring the two are met, their market share remains stable due to customer satisfaction. In a bid to increase its customer rating, Walmart also ensures that they stick with a culture of integrity and global ethics in business. As such they provide for a confidential customer reporting system where concerns and complaints can be reported. On the same, not Walmart has established an Ethic Award that targets to reward its associates for ensuring they carry out their business with global ethics in mind.
The business process of Walmart has also experienced a few adjustments in a bid to ensure efficiency. In 2016, Walmart cut down its staff by laying off approximately 7,000 staff in US stores. Also, it still aims at cutting down even further by laying off some of the administrative staff. This has proven to work in the sense that Walmart is minimizing on input by bringing down the administrative cost to maximize the output.
Finally, on learning and growth, Walmart has made a tremendous effort to ensure growth. In 2015, Walmart announced that it would be replacing its existing training programs. The new programs introduced included online and shadowing which has seen assistant managers, as well as store managers, become more efficient in their operations (Kim, Y2013). Also, Walmart trains its employees on customer service and floor training through its academies to ensure that the customers experience a new level of satisfaction. The firm has often hired trainers to train different department employees to improve the output and bring about competitively skilled human resources. For Walmart, training is not something they do and move on; it is a continuous process especially those that work in the customer service department to bring an experience that is unmatched.
Conclusion
Started over 50 years ago, Wal-Mart has grown to become amongst the world’s largest retailers. The company strengths include low-cost. The paper details SWOT analysis of Walmart giving an account of both internal and external forces that are important for the company’s development strategy. Additionally, the paper has also given the CSfs of Walmart including financial, customer perspective, business processing and learning and growth. Based on the analysis, Walmart has made a tremendous effort to ensure growth and expansion which will enhance its revenue generation and overall good performance in the market.
References
Blocher, E., Cokins, G., Juras, P., & Stout, D. (2016). Cost management: A strategic emphasis. New York, NY: McGraw-Hill Education.
Hassan, S. M., Sistani, A. J., & Raju, R. S. (2014). Top Online Shopping E-companies and their Strength and Weakness (SWOT). Research Journal of Recent Sciences ISSN , 2277 , 2502.
Kim, Y. (2013, January). Relative Importance of Critical Success Factors for ERP Implementation: Practitioners' Perspective. In International Conference on Infocomm Technologies in Competitive Strategies (ICT). Proceedings (p. 26). Global Science and Technology Forum.
Zizlavsky, O. (2014). The Balanced Scorecard: Innovative Performance Measurement and Management Control System. Journal of Technology Management & Innovation, 9 (3), 210-222.
