Walmart has had a lot of problems over the last couple of years. There has been a big fault in the management of the stores and employees and has constantly led to a fall in the profits of the stores overtime. Consequently, the store has had to change management personnel in order to curb the various problems it has been facing country wide. In lieu of this, Walmart has had to implement several changes in order to increase their profitability capacity and hedge against the losses they have been incurring. Many customers have had to shift their loyalty and thus leaving the store chain at a loss. The Management has tried to implement new changes overtime, however, the changes have not been met properly. In this paper, the various methods or techniques to be implemented in order for Walmart to accept change and strategies recommended for success within the Organization.
Over the years, Walmart has had many challenges in the management of its stores. Employees have recorded having unfavourable working conditions that are not in respect with the contracts signed and terms agreed upon on employment. The stores have been recorded to be untidy and dirty without proper management. There have been complaints regarding the shelve spacing and displays within the stores. Customers have complained that aisles and shelf spaces are small and prevent effective shopping within the mall. There have been complaints as to the quality of products provided by Walmart over the years. Many of the consumers reporting that groceries at the stores were not fresh and that the store did not provide more organize options. In the same sense, the store can be said to have been lagging behind on innovation, many of the technology being used and systems in play having been lagging behind with respect to the current innovations within the industry (Greenhouse & Barbaro, 2006).
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Before an organization can implement any changes, it is vital that communication between management and employees exist. One of the main areas which lead to a strain in implementing change within the Organization is a lack of communication and flow of information that is clear and concise. Currently, there are many speculations as to the nature of strategies and operations that are being carried out by the Organization and the impact it has on its employers. Many people, both internal and external of the company are being provided with information that may or may not be false in relation to the nature and state of the organization. At this point, any changes employed within the management or operation of the organization will be viewed with negativity as there has not been any clear communication on the nature of the change and its intended purpose (Grant, 2016). For this, it is important for the CEO to properly analyse and provide the required information pertaining to the store and the various strategies that are being put in place in order to guarantee it attains its objectives and goals. In this manner, any small change that is it to be employed within the store will be met with understanding and positivity for the most part. Employers will not have such a hard time in implementing these changes as they will be readily accepted both internally and externally. Both consumers and employees will be in a position to understand the limits of the organization and, up to a point, approve of its efforts.
The CEO, can also check on the responsiveness of the Organization through the use of Michael Porters Diamond Strategy. From the analysis, the CEO would be in a position to better understand both internal and external areas which require improvement and which greatly affect the competitive advantage of the store. Michael Porters Diamond looks at the following aspects. First, it analyses the firms Strategy, Structure and Rivalry. This is regarding the internal structure of the Company and how it operates. This analysis will also provide details on the demographics of the area of operation i.e. the culture, rivals and other factors to be considered affecting the operation of the organization. In this stage, an analysis of domestic rivalry and the improvements made by competitors will effectively guide the CEO on the strategies to employ. The second area Porter mentions is Related and Support Industries. These refer to the suppliers and distributors within that given industry (Griffin, 2007). The CEO can analyse the various suppliers it has within the area and from that determine their importance and stand in the operation of the organization. Fromm this, the CEO can analyse the demand conditions present within the area of Operation. This analysis provides an answer to the query of how successful the market is, its nature and its size. By doing so, Walmart will be in a position to determine the amount of supply for its products and guarantee meaningful relationships with suppliers which in turn spring economies of scale.
Michael Porter also suggested the presence of the government which heavily influences all the operations of the company. Any changes to be implemented must be in accordance with the given laws and regulation provided by the government with regard to the nature of the business. In this manner, an overall condition the CEO has to ensure is followed is Factor Condition evaluation. This is where he identifies the production factors within the country with respect to infrastructure and technology. A factor analysis will provide the CEO with details on proper technology and other infrastructure which can act as replacements for employee positions. The last area is Chance. Once the CEO has identified all of the above, he is able to identify the various opportunities which present themselves and from that gather the necessary information and develop strategies that will address the issues and problems being experienced in the Organization. However, this also has to be coupled with information flow within the Organization to guarantee proper response to the changes being introduced (Griffin, 2007).
In adapting to the necessary change, it would be important for the CEO to first of all rehash the various strategies that have been employed and how best they have worked in a given setting. Through the use of BCG Matrix, the organization can determine the various strategies which will declare the company profitable (Griffin, 2007). The Boston Consulting Group’s Matrix offers an insight into the manner to which an organization is able to attain profits through appropriate strategies, minimizing of costs and expenses, and identification of the various patterns of cash flow and profits with regard to the organizations strategies. All areas, through the use of the BCG Matrix would be under review and would guide in identifying the areas which prove to be most disadvantageous. Having identified these areas, the CEO can better judge on which areas require improvement. In 2013, Walmart experienced a lot of issues pertaining to its management. It was in this year that it incurred an $82 Million Dollar fine over the mismanagement of hazardous waste (Clifford, 2013). In this same year, there were several other court cases. In the same year however, it recorded profits which beat the Stock Exchange by a penny. Even though the retail giant had generated revenues which had risen by a margin of 1.6% (Shell, 2013). In this year, according to the BCG matrix, Walmart was at the Cow Stage of Strategy. At this stage, it had high earnings and cash flow, however, there was poor management and thus the Real rate of Market Growth had decreased from the previous year.
Currently, the store is trying to push out long-term high paid employees and replace them with part-time low paid employees. This will reduce the number of salaries and wages to be incurred by the Organization and hence reduce on its expenses (Greenhouse & Barbaro, 2006). At the same time however, the move will prove to reduce the loyalty of employees to the organization and consequently disrupt the employee-employer relationship further than it already has. A move that would be wise in this stance would be to employ discussions with the employees on the grounds of the store and the current challenges it is facing. In this manner, a negotiation can be employed where the organization can offer transparency in its dealings in order to reduce the damage to be caused in the employee-employer relationship. In this manner, the workers will be more responsive to the changes that are being presented within the store as they understand the need for those changes. In addition, transparency with the workers will also aid the organization in building motivation and loyalty. From the BCG Matrix, the Organization will have employed a Question strategy. Which will incur low and unstable earnings, but the organization will continue growing its market share and with time progress into a Star Strategy which has a high market share and thus high and stable earnings.
Through Michael Porters Diamond model, all the factors which affect both the Internal and external environment of Walmart and which have consequently led to the current state of the Organization will be determined. By employing such, an Organization structure which allow for implementation of changes will have to be implemented which better lead to an improved response to change. The structure will influence the management conditions or tactics which are currently in place and lead to an adjustment of these tactics. Employee’s will have an easier time approaching management through the utilization of proper strategies as suggested through the BCG and Derived by analysis of Michael Porter’s Diamond. Response to change in this event, will have greatly improved through the utility of these strategies.
References
Clifford, S. (2013, May 28). Wal-Mart Is Fined $82 Million Over Mishandling of Hazardous Wastes. The New York Times . Retrieved from https://www.nytimes.com/2013/05/29/business/wal-mart-is-fined-82-million-over-mishandling-of-hazardous-wastes.html
Grant, R. M. (2016). Contemporary Strategy Analysis Text and Cases Edition Wiley EText Card . John Wiley & Sons.
Greenhouse, S., & Barbaro, M. (2006, October 2). Wal-Mart pushes to redefine its work force - Business - International Herald Tribune. The New York Times . Retrieved from https://www.nytimes.com/2006/10/02/business/worldbusiness/02iht-walmart.2998791.html
Griffin, R. (2007). Fundamentals of Management . United States of America: Cengage Learning.
Shell, A. (2013, November 14). Wal-Mart profit beats estimates, outlook weak. Retrieved August 25, 2017, from https://www.usatoday.com/story/money/business/2013/11/14/walmart-third-quarter-2013-earnings/3524329/
