Evaluation of Walmart

Cost Leadership Walmart’s main business strategy focuses on building and maintaining cost leadership in the market. The company’s slogan reads, â€Å"Everyday low price†. This highlights its main focus on cost leadership. The strategy entails offering the same market products offered by rival firms at lower costs, but without compromising the quality.Advertising We will write a custom essay sample on Evaluation of Walmart specifically for you for only $16.05 $11/page Learn More Walmart manages to achieve this objective by relying on a highly efficient supply chain management that only avails products to the consumers at the right time when they need them. This eliminates additional costs that come from holding stock within the company’s premises (Schermerhorn 223). Walmart uses a sophisticated technology to interconnect its operations with those of the suppliers. In essence, information about stock levels within the company is relayed in real time. The sophisticated IT system relays the information to the suppliers immediately every time consumers purchase a commodity from the retailer. This makes it possible for the suppliers to monitor the stock-levels at any given time. Thus, restocking occurs at the opportune time just when the clients need the products and in the exact quantity. The ‘in-time’ logistics in the company has been the main reason behind its cost leadership in the market. The retailer also sells products in smaller quantities to allow its customers to pay less (Schermerhorn 223). Walmart acquires goods packed in large quantities, but it repacks them in much smaller quantities for sale at reduced prices. This sustains its â€Å"Everyday low prices† slogan. The true meaning of the slogan would not be achieved if the firm decided to sell the commodities in the large packaged quantities that it acquires from the supplier. Differentiation Strategy Walmart pursues a differen tiation strategy whose main objective is to offer products and services that are unique in the market. Although the firm is not involved in manufacturing, Walmart stocks products that are specifically packaged in branded material. The company has invested heavily in repackaging materials to enable it achieve the differentiation mission.Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More Additionally, Walmart offers unique warranties that other rival retailers in the market do not offer (Daft 253). This creates a unique feeling among the consumers, making them believe that the experience is only available in Walmart and not from any other retailer. Acquisition Strategy Walmart has focused its efforts on market acquisition as a way of expanding its market presence. The firm considers acquiring other already existing retailer firms in foreign markets and maintaining their original names to cope w ith the globalization phenomenon and increasing market competition among rival retailers. This is the case in most conservative markets where a foreign trade name may not augur well with the company. Walmart also considers acquiring and merging with other businesses outside the retail industry as a way of expanding its portfolio. This also helps in spreading the company’s risks evenly (Daft 255). Walmart, for instance, acquired Kosmix, which is a social mobile platform. Walmart operates under the ASDA trade name in the United Kingdom after the latter was acquired in 1999 by Walmart. Product Quality Concerns Walmart has instituted a mechanism that focuses on maintaining high product quality. All Walmart stores around the world are required to fulfill the Global Food Safety Initiative (GFSI). This GFSSI procedure calls on all food suppliers to be subjected to the factory audit checks as a way of ensuring that the products meet the desired quality. The retailer has worked togeth er with The Sustainability Consortium (TSC) since 2009 as a means of developing measurement, as well as reporting systems. The target is to enhance product sustainability and eliminate problems attached to product quality. In this arrangement, TSC performs research on metrics and the reporting systems. The research, in turn, helps Walmart to engage suppliers while clearly understanding the products sold.Advertising We will write a custom essay sample on Evaluation of Walmart specifically for you for only $16.05 $11/page Learn More In recent times, however, there have been rising concerns over poor quality of products sold by Walmart. For instance, the fresh foods sold by the firm have been found to suffer from poor quality. This problem is mainly linked to another challenge being faced by the firm, the challenge of staffing and related issues (Weiss 472). Walmart’s fresh foods have only managed a low market share in comparison to other market pla yers. This could be an indicator of the worsening product quality concerns. Labor Practices Walmart has been involved in accusations with labor union bodies, religious organizations, and community groups over its labor practices and policy. The retailer was taken to court over what its accusers termed as discrimination of its staff along race and gender. Three women employees filed a sex discrimination complaint against the retailer in 2012, accusing Walmart of failing to promote them because they are women. The accusations leveled against the company also mention the fact that female employees generally earn less compared to their male counterparts (Daft 122). Workers in the firm have also accused their employer of failing to observe acceptable labor practices, resulting in poor conditions of work in the various stores owned by the retailer. Business Ethics Walmart considers ethics as the strongest aspect of its success in business. The organizational structure has an established g lobal ethics office whose main mandate is to promote its culture of integrity (Walmart para 1). The office also develops and helps in upholding the policies that relate to ethical behavior concerning all the stakeholders. Ethics education is offered on a routine basis to the employees. In this case, all workers undergoing training in the firm are subjected to consistent integrity lessons. Walmart supports a special award related to business ethics, the Integrity in Action Award, to further emphasize on the need to enhance business ethics (Walmart para 1).Advertising Looking for essay on business economics? Let's see if we can help you! Get your first paper with 15% OFF Learn More The award is offered in recognition of individuals or associates of the firm who demonstrate a greater level of integrity through their consistent actions. Such recognized associates must also have inspired others to do the right thing while dealing with Walmart in one way or the other. The retailer practices integrity itself when selecting winners for the award by allowing the associates to conduct their own voluntary nominations. The resultant global votes determine the perfect recipient of the award. Walmart also takes consideration of each of the countries where the firm has a presence (Walmart para 3). Market Share The retailer has the biggest market share compared to its competitors in the USA, which is Walmart’s traditional market. Walmart’s heavy presence throughout the country and its business model that makes it stock virtually all kinds of commodities have been critical in sustaining market share leadership. On the global front, Walmart serves up to 94 milli on customers every week through its 5,651 established stores in 26 countries. However, a paltry 5.5% market share was registered in the year 2011 in China where the company is still in its early stages of development. The failure by Walmart to register a strong market share in China is attributable to the conservative nature of the Chinese. Market share growth in India has also been hampered in recent years following decisions by authorities in the country to shift foreign direct investment. The North-American market of Canada has equally posed great challenges to Walmart. The Dollarama Inc. is emerging as the fiercest competitor in the mass retail market in the rich Canadian market. Walmart trails Dollarama with the second best market share of 26%. This percentage of market share is 16 points less the share of Dollarama, which stands at 42% market dominance. Target Corp. is the third with a market share of 23% (Bloomberg News, 2012, para 1). However, Walmart’s subsidiary ASD A in the UK maintains an 18% market share, which is the second biggest in the country. Tesco still maintains the largest market share in the UK retail industry, standing at 30.2% overall (â€Å"Walmart: Update on International Markets† para 5). The African market equally has a strong Walmart presence of more than 300 stores that spread across 12 countries in the continent. Massmart, which is Walmart’s subsidiary in the region with a 51% stake ownership, has the fastest growing market rate, especially in the sub-Saharan region (â€Å"Walmart: Update on International Markets† para 6). The pie chart below depicts Walmart’s market share situation in the traditional US market. Source: Catala para 3 The chart shows that Walmart has a commanding share of more than half the market size. The second strongest competitor, Costco Wholesale Corp., does not even command a third of the market size. Advertising Strategies Walmart is adopting the use of technology in its advertising. In this strategy, the company focuses on developing a mobile app to reach its targeted markets. Shoppers using the app are able to see additional content, such as product information and the recipe. The company’s target is to reach a larger number of existing and potential buyers by exploiting the growing popularity of mobile devices as a result of the advancement in the ICT platform. The mobile app is a more interactive way of advertising because it allows the user to obtain more details about products and services. Walmart has adopted the use of popular social media platforms to create market awareness to further utilize the power of technology in its advertising. For instance, the firm has a Facebook page where a large community of customers and potential buyers meet virtually and discuss issues about their retailer. This increases market awareness because of the strong word of mouth power as customers share their experiences amongst each other. The company a lso uses the opportunity to communicate directly with individual customers while seeking to address some of the unique issues that affect them, thus learning more about the tastes and preferences of their customers. The company’s use of the social media platform in advertising also helps it to maintain its operating costs at a lower level, thus building on its competitive edge more. Evaluation of the Analysis Walmart has a greater potential of expanding in Asia and should be considered as Tech-Shield’s best choice as far as investing is concerned. Its cost leadership focus and strategy will attract more buyers in the region, resulting in higher profits. Most Asian economies are still considered as developing and have a weaker buying power compared to North America and Europe. Walmart will utilize its low price policy to attract more buyers with inferior disposable income and make the firm to benefit from the resultant economies of scale. Tech-Shield will receive a bigg er dividend rate coming from the huge profits amassed. This will be positive for the growth of the company. The low price policy pursued by Walmart has seen the company introduce a new business modality of selling products in smaller quantities. This will further attract customers towards the firm because most of them will find buying products from Walmart to be a more affordable practice. The more customers will appreciate the retailer, the more it will have its chances of making huge profits and increase the potential for Tech-Shield to get better returns. The differentiation strategy by Walmart equally increases the potential of the company to make better profits. Walmart stands a better chance to attract more customers and make higher sales than its rivals because of the increased market competition within the retail industry. Buyers increasingly feel that whatever commodity or service they purchase from Walmart is unique, thus they get attached more to the firm. The attachment increases their level of satisfaction and enhances their loyalty towards the firm. Walmart is poised to maintain high profitability for longer periods given such a positive business environment. The company can, therefore, sustain to pay attractive returns to all its shareholders for long. The acquisition strategy that is pursued by Walmart is another significant consideration that should influence Tech-Shield’s decision to invest in Walmart. Walmart is sure of expanding in the market in many other countries in the world through the acquisition approach. The experience that the company has gathered over the years through its subsequent acquisition of different retailers to gain access into new foreign markets eliminates the possibility of making over ambitious plans to a great assistance. Such successful acquisitions in high potential markets will translate to a larger market for both firms. Walmart will register bigger profit margins because of the expanded market. This will enable Tech-Shield to earn higher returns as one of the shareholders. Walmart’s future prospect is still promising, although its global market share has been threatened in some regional markets. The retailer still enjoys a strong lead in the highly lucrative US market. The US market contributes a significant profit portion to Walmart’s overall corporate profit. Walmart has maintained a strong market share position in other significant European markets, such as the UK. This portrays the company’s strong market position going forward. Going with this trend, it is appropriate to conclude that no other global retailer brand will find it easy to topple Walmart as the global leader in terms of the overall market share. Walmart’s extensive global expansion is unrivaled. This goes further to highlight Walmart’s potential of sustained industry leadership in as far as the overall market share is concerned. To this extent, a decision by Tech-Shield to invest in the company is the most strategic because of definite greater market revenue, which transforms to higher returns. Recommendation I suggest that Tech-Shield should invest in Walmart. Walmart has a positive business profile that reassures a higher return on the part of Tech-Shield. There is no present threat to Walmart’s growing global market, strong market leadership in the highly valuable US market, and the sustainable cost leadership strategy that it has implemented. This implies that the strong market leadership position that Walmart enjoys is set to prevail for long. In turn, a move by Tech-Shield to invest in Walmart will see it earn good returns for a long period. This will eventually improve Tech-Shield’s capital base. Conclusion Walmart offers the best investment alternative for Tech-Shield. The company’s cost leadership strategy gives a greater market growth assurance. The firm is capable of maintaining its operating costs at a low level compared to many of its industry rivals. This is a significant aspect in as far as building a competitive edge in the market is concerned. This will continue attracting more buyers for the company and maintaining the already existing customers. It also gives the company the confidence that profitability will remain high. The strong business ethics that focuses on maintaining integrity amongst the entire firm’s associates also gives hope for a greater business fortune for the firm. Integrity is a critical aspect that attracts customers and enables them to build strong loyalty towards the firm. Walmart will evidently reap maximum profits as it strives to enhance integrity. This will, in turn, trickle down to Tech-Shield as a shareholder. However, it is critical to note that Walmart also faces potential distractions that could derail its future ambitions in case no efforts are made to rectify them. As a shareholder in the firm, Tech-Shield should push for a renewed commitment on the part of Walmart to address the concerns of poor labor practices. Workers are significant players towards the greater performance of a firm, thus Walmart should ensure that it focuses on improving the plight of the workers before concentrating on the external customers. The firm should equally put additional measures in place to ensure quality concerns raised over its products are addressed fully. Works Cited â€Å"Walmart: Update on International Markets.† Guru Focus. 2012. Web. Catala, Raymond. Walmart Market Share Analysis, n.d. Web. Daft, Richard. New Era of Management, Mason, OH: Cengage, 2008. Print. Schermerhorn, John. Management, Hoboken, NJ: Wiley, 2010. Print. Walmart. Home. 2013. Web. Weiss, Joseph. Business Ethics: A Stakeholder and Issues Management Approach, Mason, OH: Cengage, 2008. Print. This essay on Evaluation of Walmart was written and submitted by user Cayden Nolan to help you with your own studies. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly. You can donate your paper here.

Interview paper Essay Example

Interview paper Essay Example Interview paper Essay Interview paper Essay Interview Paper Name: Lecturer: Course: Date: Interview Paper I interviewed Miss Catherine Smith, a marketing manager at a local beverage company. She has worked for the company for six years in a managerial position thus accumulating experience in decision-making. Most of the time the company looks up to her to come up with ways of improving the sales of their products that are a crucial factor in profit making. She has responsibilities such as, ensuring customer satisfaction, pricing strategies, research on market trends, coordinating recruitment of staff in her department and advertising and promotion of the company’s products. On a daily basis, she makes managerial decisions that affect the company economically and through other aspects. Being in a competitive business, she has to be careful on the kind of decisions she makes especially because her job is directly linked to the product and the consumers. The interview began with questions about my coursework and the reasons for our discussion. Having explained to her in my request for the interview, I was a bit taken aback by her inquisition of the details. I gave her a detailed summary of what I was undertaking and informed her that the interview was for my coursework. Due to her background in economic studies, she was quick to offer me a few pointers on what to major in and how to approach the job market later. Throughout the interview, she kept pausing to attend to some urgent work but resumed almost immediately. Prior to the interview, I had prepared a series of questions on a number of topics. These questions were in the form of a questionnaire. This was to guide me in the making of my final paper. The main themes were based on how the company’s strategies are affected by the decisions she makes concerning economics. Economic decisions are those that deal with financial aspects of a business and how resources are divided among different functions (Baker, 112). In this case, the decisions being made involve the allocation of resources to her marketing department. I asked about the decisions she makes regularly, what influences them and their consequences. The company’s business strategies include its future prospects, market competition, availability of resources, the business environment and the expectations of their stakeholders. According to Catherine, she makes decisions influenced by current economic status of the company, the need for profit maximization, consumer trends and market structure. Concerning the company’s economic status, she has to evaluate whether the company can be able to withstand certain decisions that require financial assistance. For instance, when she has to run an advertisement campaign, she must confirm with other relevant departments to ascertain the financial position of the company. As much as advertising helps to connect with their consumers, the resources of the company have to be considered in line with its business strategies. At all times, the company should maintain a certain level of resources that help in the running of its daily activities. In such an event, she has to consult prior to running the campaign, which involves the aspect of management planning. This way, the company benefits from her decision and the business strategy remains unaffected. However, the aim is not to affect the business strategies, it is to ensure that the actions taken by management should develop or implement these strategies often done through strategic management. Profit maximization is the main aim of the company’s operations. Almost every action taken seeks to advance the company’s profit to the highest possible level (Lantos, 60). As the marketing manager, she is tasked with this responsibility as she deals with securing a market for their products. This is not to imply that she is the sole determinant of the company’s profit, because hers is not the only department and all of them have to coordinate to achieve the goals of the company. Catherine mentioned that she makes such decisions most of the time, those that intended for maximizing profit. Having to deal with how the company’s products penetrate the market is not an easy job. It involves a lot of work, and she often requires the assistance of other departments. As one of her tasks, she determines the price of their products. This is done after a rigorous research on consumer buying trends, consumer income and the prices set by their competitors. These factors often influence how a commodity’s price is set (Hitt, Robert, 284). The price has to be put in such a way it does not cause losses, or else her decision making will be put in question. All the activities involved with price control such as the research require some money. The manger therefore drafts a budget and delivers it to the finance department for consideration. The amount of money accorded to them helps her to decide on the methods and tools to be used for the research. One business strategy of the company is to remain competitive. The interview revealed that marketing greatly determines competition. For instance, Catherine cited that the prevailing prices in the market help to place the company at a certain level with its competitors. As she makes her decisions, she has to ensure that they are within the goals that these strategies hope to achieve. She explained to me that competition is important in determining whether the company is making profit or not. It also provides knowledge on what advantage if any, the company has over its competitors and how it can be manipulated to increase profit. Additionally, competition helps in the identifying of possible markets. The marketing manager always has to monitor such matters not only as part of her job description but as a participant in fulfilling the vision of the company. Economic decisions in marketing also have an effect on the future of the company. The company like every other organization puts into consideration its direction in terms of whether it is achieving what it intended. She went further to explain to me the company’s expectations, which include establishing itself as one of the leading beverage companies based on quality of products and market share. Therefore, the company constantly evaluates and reviews its progress through various ways such as conducting market surveys. Again, the marketing department is put under spotlight, as it is important in determining the company’s position in the market. The marketing manager has to give an account of how things are as they are, and mostly they are so because of the decisions she ha made. The future prospects of the company entail how much profit they would have made during a certain period (Hirschey, 632). Both the production and marketing teams are liable for this aspect of the company, as in practically. The production team should ensure quality commodities are made while marketers decide on how best to satisfy their customers and still earn extra money. Tough decisions therefore have to be made and consideration put into the consequences of these decisions. The recruitment of staff to the marketing department is done by human resource department after a prompt from the marketing manager. I had asked if it was within her mandate to make such a decision. According to company policy, anyone recruited to her department had to be interviewed by the marketing manager. Although the sourcing for possible candidate was done by the human resource section, the rest was left to her discretion. This is because she knew the kind of skills she required under her department, as it was an important one in the company. This concluded our interview session and we proceeded to discuss why managerial decisions are crucial to any organization’s success. The information I gathered indicated a relation between these decisions and the business strategies of an organization. Most managers are employed to advance certain business strategies hence each decision they make should reflect this (Sekhar, 14). However, these decisions can only be successful if they are of good quality and have been executed effectively. These decisions help in building trust and confidence in both consumers and employees. If consumers are satisfied with a product, they tend to buy it more, which is advantageous to any company. Employees gain confidence in the company they work for if their managers make good decisions that guarantee stability in the future. Conclusively, the interview helped me to understand my coursework better and gain some knowledge of how things work behind the scenes to make an organization successful. Most of the decisions that managers make are not publicized but they reflect in the consumers’ reaction to their company’s products. The interview was definitely an eye opening experience.