Introduction
The growth of Wal-Mart can be attributed to the compelling use of spatial key animation templates. This has helped the spread and dominance of the shopping mall in the economy. It has been described using all sorts of words due to its influence in the global economy. An analysis of this fast growing global service provider requires a clear assessment of the historical business model in terms of the key aspects used. This assessment entails factors such as: its economic aspect, the labor relations, community mobilization and the ties that link it to the global economy. These will also provide a clear description of the themes used in the operation of the supermarket. The major themes that are prevalent in this market include: daily low process, supply chain management, culture, jobs, pricing, working conditions just to mention but a few. Wal-Mart has remained successful in the market due to the way it garners benefits from the international environment and the way its’ corporate culture has adapted to the reality. The paper will focus on evaluating the spatial origin and spatial expansion of Wal-Mart as well as its growth in terms of employment ad annual sales. It will also cover the company’s corporate strategy, focusing on the spatial elements of its strategy that include the store locations, globalization and logistics or rather the supply and distribution processes.
Spatial Origin and Growth
The origin and entry of Wal-Mart into the market has brought about significant developments and changes in the way global markets are operated. The first Wal-Mart Supercenter was opened in the year 1988 in Washington, Missouri where it carried a full line of grocery items. It had huge impacts in the American market and thus it saw the need to expand in order to attract more customers. Today, it has averagely more than 100 new supercenters opened every year where more than half of the store opened are involved in the sale of full line grocery items that are appropriate in terms of dollars. It has been described as the leading supermarket chain in the United States. The policy behind the success of Wal-Mart has been termed aggressive due to its pricing that helps in reducing operating margins of competing supermarkets. This is coupled with lowered consumer prices that are allowed for many food items. The shopping mall has also had various competitive effects on their expansion where in February 2005 the bankruptcy filing of Winn-Dixie was largely blamed on the rise of Wal-Mart. This effect has been reported by other supermarkets that have experienced downfalls due to the rise of Wal-Mart (Talaulicar, 2009).
The spatial expansion of Wal-Mart can be described due the analysis of the short and medium price effects that contributed to the fast rise of the shopping mall to the top of the retail food chain. The analysis done in this situation involves combining a unique set of data that consists of the Wal-Mart’s and the competitors’ prices in comparison to a different set of data that contains the opening dates of all Wal-Mart supercenters opened in the United States. These analysis indicated that the direct and indirect price effects of Wal-Mart’s expansion are significant in that they described the direct as the raw divergence between the price Wal-Mart charges and the price competitors charge. The indirect price effect of the expansion of Wal-Mart is due to the price reductions at the competing supermarket (Graff, 2006). Other supermarkets such as Kmart have emerged in the market to offer competition. The success that drove Wal-Mart to the top position emanated from the expert logistic systems and the cost-conscious corporate culture. This led to the retail sector which brought about a whole productive gap between the national chains and single unit retailers that are quite large.
The growth is also evidenced through the strategic objectives defined within the organization where they utilize the opportunities and responsibilities in order to make a difference on big issues that have an impact on the society and the organization as well. It prides itself in issues like preserving the environment, fighting hunger, empowering women and providing access to healthy and affordable food. These issues have attracted more customers and boosted their sales in that people prefer going to the Wal-Mart Supercenters than any other supermarket. They have made ripples in the global market through the internalization process that involves three processes where the first process involves expanding to adjacent markets such as Canada and Mexico which are considered successful. The second process involves focusing on a world market that required them to movement in other countries. The third process the strategic planning approaches where required Wal-Mart to concentrate on key locations such as China in order to win local battles and adapt to the landscape that would help them balance customer demands with the core business models.
Corporate Strategy
The corporate strategy that focuses on spatial elements of the strategy used in Wal-Mart involves consideration of the store location, globalization and logistics. This entails paying much attention to the supply and distribution processes incorporated in the business. This is where the key locations were selected with deep consideration of where the supplies and distribution would be impacted. The main factor that would contribute to the success of Wal-Mart in the global market is that global markets offered the attraction of potentially rapid economic development instead of consumer spending and also the ability for multinational retailers to leverage their superior distribution or rather logistics and information technology systems. This has brought about much revolution in the food production processes. In the United States, Wal-Mart has made attempts to push out middlemen in Mexico and Honduras in order to source and access supplies directly from the farmers. Wal-Mart attracts its suppliers through giving them more money for their products than if they participated in the global economy. They also ensure strict standards and regulations that many cooperatives lack the capital to meet. This gives them an upper hand in the participation of the global economy (Graff, 2006).
Their logistics have indicated that the tax breaks and infrastructure improvements have helped change the supermarkets and locations. This has been evidenced through the increase of their subsidies and tax breaks for over 244 of its stores and distribution centers. Their sales have also grown where research has shown that over the years the total sales annually are more than $120 per year. The size of the subsidies and Wal-Mart's habit of closing or relocating stores in order to open supercenters nearby, often creating gray fields or ghost boxes abandoned, slightly used, vacant commercial real estate is commonly maligned by critics for its potential to create neighborhood blight. The employees in these stores and distribution centers are usually united in order to give the business less turnover and higher overheads and thus able to compete.
The organization also ensures a corporate culture by uplifting and recognizing the efforts given by small town values, hard work and conformism and strong patriotism. This is mostly experienced in their employees who work under strict employee manuals that outline their behavior expectations and testimonials about their work experience. They also have management tool boxes that teach managers how to prevent and bust unions (Moretti, 2012). This strategy encourages the employees to perform better and in a patriotic way through consumerism. The annual meetings held as a form of cultural events where Wal-Mart values are celebrated and glorified. Studies conducted on their policies have indicated that the low prices define the organizing concept of democracy and portray the universal attempts made by Wal-Mart where class lines are eradicated through the maintenance of values.
Employees within Wal-Mart are treated as associates to the organization where they are given much priority and utmost respect. The same policy extends to the way the company’s global suppliers towards the workers are subjected to the intense controversy by labor unions. Wal-Mart aims at developing different labor strategies and business forms depending on the market, institutions and the culture of the host countries where it operates. This will involve variations in their employment practices. The indirect impact on workers can be seen in the logistics sector where much has been observed especially in an instance where some of its workers had threatened to strike for the Wal-Mart’s supermarkets situated in Southern California forced to reduce their costs. This situation had brought about limitations on unions and supermarket contract negotiations. It also brought about less pressure from Wal-Mart due to the racial and immigrant status to ensure workers' rights. The employees have a vast global supply chain that needs to be considered as an indirect workforce. It brings about an working conditions experienced by the suppliers abroad. Wal-Mart has received quite some criticism in their employee relation in that some have accused them of having under aged children and many immigrants and racial segregation. These have been part of the organizations negative sides.
Ways in which Wal-Mart has utilized information and technology to pursue its objectives. Technology has played a vital role in the rise of Wal-Mart to the top position in the global market in that it has helped the organization in the branding of their products. This process helps customers to identify the genuine products that come from the organization. It has also adopted new forms of media where they have established various websites that are important for customers and researchers to air their demands and views. This forum may also be used for informing people of the new updates the company intends to make as well offer channels for education, debate and change. Information technology has also helped the company to develop ways to differentiate their products from other competitors. The company also utilizes the use of technology to market their brands and products in order to attract more customers and increase sales (Errickson, 2013). This is evidenced through the adoption of the animation template that defines the advancement it has had over time. This is coupled with the use of eco-friendly electronics which help manage the waste and prevent pollution. They have adopted the use of computers and other electronics to monitor their supply chain levels where there are links at every end and suppliers have technical expertise and proprietary information that requires feedback ones the supplies have been delivered. They have also ensured that their consumers recycle their electronics in order to reduce e-waste.
Technology has also been used through the process of sustaining strategies that help shift generating value through price-based transactional interactions that help generate value form long term collaborative relationships with non-profits, suppliers and other external stakeholders this has involved a new kind of networking that has boosted transactions and process I the whole business. It has also built on developing and implementing new innovations that guarantee greater purchases and quantities on the front end rather than paying price premiums on the open market.
Advantages and disadvantages of Wal-Mart of the American market
Wal-Mart has come in handy within the American market. Particularly, it has eradicated the traditional marketing techniques that involved slotting fees for sale items. It has brought about costs onto suppliers through the extraction of product-specification demands and relentless pressure to lower prices and improve quality. It has also brought about more advantageous effects such as the trade liberalization that ensures a steady stream of imports that would bring more competition among the suppliers and hence quality of goods. This brought light to the people to know that many of the finished consumer goods that claimed to be made in America were actually made or rather had inputs that were sourced from abroad. Wal-Mart is also an advantage to America in that it helps employ people and empower women and other groups that can help in improving the economy. It also provides food products and other goods at relatively affordable prices, thus lifting the living standards of the Americans. Most of the stores are located within a 5 mile radius of Americans population and 96% of the people are within 20 miles thus giving an inverse relationship between population density and the number of stores (Christopherson, 2007).
Establishment of Wal-Mart stores have led to the development of many commodities such as infrastructure and brought changes within the zones where they are located. Tax breaks and subsidies have also been another important fact brought about by the expansion of Wal-Mart Supercenters. It has destabilized the traditional grocery retailing and impacted less turnovers and higher overheads for grocery stores where workers are commonly unionized. This has been coupled with 31 supermarket chains that have sought bankruptcy protection. It has thus uplifted the trends in which supermarkets are operated by bringing in modernized and easier ways of carrying out global business. For every coin has two sides, Wal-Mart supercenters have also had their share in the negative impacts on America. It has brought about issues of racism and labor unions. Many cases have emerged where the company has been sued for employing under age children. It has also brought about negative effects on the downfall of other businesses which means losses.
References
Christopherson, Susan. (2007). Barriers to 'US style' lean retailing: the case of Wal-Mart's failure in Germany. Journal of Economic Geography, 7 (4), 451-469.
Ellickson, Paul B.; Grieco, Paul L.E. (2013). Wal-Mart and the geography of grocery retailing. Journal of Urban Economics, 75, 1-14.
Graff, Thomas O. (2006). Unequal Competition Among Chains of Supercenters: Kmart, Target, and Wal-Mart. Professional Geographer, 58 (1), 54-64.
Moretti, E. (2012). The new geography of jobs. Boston: Houghton Mifflin Harcourt.
Talaulicar, Till. (2009). Global retailers and their corporate codes of ethics: the case of Wal-Mart in Germany. Service Industries Journal, 29 (1), 47-58.
