Walmart Update 2011 Case Study

Walmart Update 2011 Case Study

Walmart is one of the leading global retail firms worth more than 420 billion dollars. Walmart store opened its doors to customers in Arkansas in the year 1962, and more than half a century later, there are approximately 8200 Walmart units spread across the globe. As the global recession took place in 2009, Walmart’s performance and its market share rose sharply (Yoffie, 2011). However, there is a need for proper strategic management of the corporation’s performance to maintain its competitive advantage and to sustain its growth.

The strategic planning process of Walmart's status involves scanning of its external and internal business environment to enable the business entity to position itself and its services into perspective. SWOT analysis highlights the major weaknesses and strengths of Walmart together with any arising threats or opportunities in the course of operation.

Strengths

Walmart has built its brand image around the provision of quality products with low prices. Application of this core competency has stamped the firm's position as superior when compared to its competitors in the United States, China, and other parts of the world. Walmart also involves local communities by hiring local staff and sponsoring local sports events. Walmart's practices and policies are designed to ensure equitability and exclusivity within the internal business environment. There is a provision of equal employment opportunities and periodic training to its workforce to update them on market needs. Globally, the organization has more than 2.2 million employees and business associates.

Weaknesses

            Walmart lobbies to expand to a new business environment in the developing world. Given that Walmart negatively impacts local stores, environment, and traffic, activists often attempt to block the introduction of its subsidiaries in some areas of the United States. Unethical business policies such as unfair business policies damage the reputation of Walmart, resulting in a shutdown of operations in countries such as Germany and South Korea. Even worse, only a handful of female employees and minorities hold managerial positions.

Lack of diversity among Walmart’s employees in the United States hurt the brand both locally and internationally. In addition, the corporation does not have clear job security for its employees and associates, besides their ill treatment. Walmart is a non-unionized organization whose employees earn relatively low wages when compared to those hired by unionized competitors. The low salaries affect the standard of living of Walmart employees. Furthermore, the organisation is not actively engaged in research and development activity in new markets.

Opportunities

Walmart and other similar multinationals have an opportunity to showcase their services and products especially when state authorities invite potential investors to forge deals on new trade agreements, thus expanding retail markets. In addition, all Walmart products and services are offered on private labels. Given its size, Walmart incurs less resource to cover operational costs in gaining higher business margin and provision of quality products (Yoffie, 2011).  It also has multiple opportunities of forming new business alliances and merging with startup retailers in all parts of the globe. The retail market in Asia is untapped. Therefore, Walmart has an opportunity of expanding to other Asian apart from China and Japan. Asian economies are growing rapidly, hence the implication of rising consumer spending that will be beneficial to Walmart should it join the vast market.

Threats

Walmart faces stiff competition that is common in the worldwide retail market and local stores. Persistence of this competition can result in low profitability due to minimal annual sales revenue. Besides, there is a growing resistance and opposition from the local business in the countries of operation such as India. The government intends to protect local businesses from market saturation by multinationals, hence threatening restriction of operation by Walmart and other international retail organizations. Cases of lawsuits targeted at the corporation are also on a sharp rise.

Case Analysis

The case study indicates that Walmart is on a growth trajectory even though its US branch is on a brink of collapse. Therefore, it is imperative for the organization to address challenges that slow its growth pace such as women rights, diversity and its poor record on environmental concern (Yoffie, 2011). The firm should utilize its strength as a market leader to introduce sustainability policies that can be emulated by its competitors hence ensuring survivability during economic downturns. In addition, rising questions on the validity of Walmart's claim on low commodity pricing should be quieted and addressed by discounting prices as a long-term business strategy.

In summary, it is clear that Walmart has a strong market position in the globe. Its size provides economies of scale and enhancement of brand image (Yoffie, 2011). However, as economic uncertainties and market volatilities threaten to halt its progress, its leadership is mandated to review the company’s strategies to address surfacing employee dissatisfaction and poor record in business ethics. It is recommended that Walmart should embrace e-commerce and online business transactions to reach out to a wider global market. Moreover, the firm should establish a corporate culture that encourages involvement of employees in decision-making

References

Yoffie D. (2011). Walmart Update 2011. Havard Business Review. Print.