The Implementation of Market Requirement Perspective at Wal-Mart
Companies may develop their vision as articulated via firm's mission statement after taking into considerations the demands of customers concerning services or products, competitors' strengths or weaknesses, as well as company's cultures, weaknesses, resources, or strengths. A firm's mission statement demonstrates the company's aspirations and values. From the mission statement, the business strategy of the firm can be formulated. Such a business strategy (BS) denotes a long-term roadmap for achieving the mission expressed via mission statement. All functions in the company may derive its plan in-line with the company's overall business plan (operations strategy, financial strategy, as well as a marketing strategy) (Steve, John, & Richard 2013, p. 77). The paper elucidates how market requirements perspective, as an operations strategy of Wal-Mart, can be executed to enhance the competitive business edge of the firm. Additionally, it explains the Hayes Wheelwright strategy.
The strategy of Hayes Wheelwright concerns the ability as well as a maturity model, which elucidates the manner operations of a company moves or advances from acting as a barrier to becoming a strategic success (Mike 2000, p. 47). It is a model of four stages. A firm becomes a creator as well as innovator of business opportunity in the fourth stage. The first stage endeavors to achieve internal neutrality. The operations role can be described as inward looking, besides, at best reactive. The organization strives to attain internal neutrality by avoiding mistakes (Mike 2000, p. 47).
The second stage endeavors to achieve external neutrality. In this stage, the operations role compares with other firms within the external marketplace. Ideally, through executing the best practice approaches in use, the firm endeavors to be like their competitors. The third stage tries to attain internal support (Mike 2000, p. 47). The firm’s operations strategy can be described as aligned to the general strategy of business. The objectives of the organization are internally supported by the operations strategy. The last or fourth stage achieves external support. The firm’s creativity as well as proactive approach gives them competitive edge, which make them beat their competitors (Mike 2000, p. 47).
The Four Stages of Hayes Wheelwright Strategy
Source: (Mike 2000, p. 47)
Operations strategy (OS) denote collective actions preferred, stimulated, or authorized by corporate strategy (David 2008, p. 225). In Wal-Mart, it is executed in the function of operations. Such operations strategy in Wal-Mart binds many operations actions as well as decisions into a solid, steady response to forces of competition by linking Wal-mart’s programs, actions, policies, as well as systems into an orderly plan to the competitive firm’s priorities communicated and preferred by the business strategy. Ideally, operations strategy of Wal-Mart details how the company uses its operations abilities to enhance its business strategy.
The attainment of a strong competitive edge through operations needs the implementation of operations along other functions executed at the firm's corporate level. This implies that operation has two key roles it plays in promoting the overall strategy of a firm. One role is offering processes, which provide the company with a competitive edge in the marketplace. It means that the operations offer a marketing advantage via unique, distinct technology growths in processes, which competitors never match (David 2008, p. 226). Another option, which operations may play entails offering harmonized support for significant approaches where company’s products or services win over competitors in the market, also referred as unique competencies. The Wal-Mart’s operations strategy are appropriate for setting policies in infrastructure design and process choice, which are in-line with its distinctive competency. What differentiates Wal-Mart from its competitors is the level to which its operations match the firm’s infrastructure and processes to unique competencies (Chary 2009, p. 16).
Wal-Mart can be described as among the largest as well as most successful retailers within the history of America. The operations strategy of Wal-Mart is employing low prices as well as inventory levels to produce faster sales depending on value and low prices. Ensuring that the inventory is low enables the firm to maintain prices low for customers and substitute products with novel goods once inventory is cleared. Additionally, it increases demand (Chary 2009, p. 12). Ideally, low prices, as well as high demand, results in increased sales for Wal-Mart. Currently, the firm continues to expand, and its success is due to effective strategic management operations as well as the execution of requirement market perspective. It implies that the operations strategy of Wal-Mart has been a significant factor in its success.
Once Wal-Mart has developed its strategy, it addresses how management can achieve such strategy. Its operations strategy flow from a plan; specify a resource, commitment of employees, as well as time issues. Operations strategy at organizational lower levels has a narrow scope and is short-term (David 2008, p. 225). Wal-Mart’s principal strategic goal is an example. The goal is to offer quality products at low prices, which can be described as affordable to customers. Wal-Marts operational goals concentrate on sound logistics demanding inventory and technology management approaches to assist in lowering expenses, which is then passed to customers.
Wal-Mart enjoys the reputation or status for caring or listening to its workers, customers, as well as prospective public. For that reason, Wal-Mart is an industrial leader taking into consideration world of buyers with an interest in lower affordable costs (Steve, John, & Richard 2013, p. 77). The decision makers of the firm must persist with its organized strategies, which the firm's founder or president created years ago. The founder, Walton Sam, operated using three principles; offering customer good service and value, securing good rapport with firm's associates, as well as be involved or in-touch with the community. Among the reasons, Wal-Mart leads as the world’s largest marketing firm is from its efficiency or sound logistics. Additionally, using inventory management and technology systems assists in ensuring product costs at some discount, which helps buyers to purchase products as well as keep their wallets.
An operation characteristic, which was integrated within Wal-Mart was the cross-docking inventory framework. Cross docking denotes the practice of transferring material to a shipping dock from a receiving dock while bypassing storage. As a result, cross-docking lowers transportation expenses, expenses due to order fulfillment or material handling, as well as inventory carrying expenses. Through cross-docking, Wal-Mart has attained a sound means to transport products with minimal expenses. Products may be transported, using cross-docking approaches, to stores faster through passing stock count. It reduces the expenses as well as eliminates extra costs making sales liable. Additionally, such a process offers those in management positions more convenience (Chary 2009, p. 13).
Wal-Mart has a transportation system that assists in shipping products to the store from the warehouse. It enables the firm to restock its stores faster in comparison to the competitors. Wal-Mart is operated using the highest prestigious program of data at the industry level. Wal-Mart has a world-class processor, which updates the shipment of products to ensure that the firm is informed of items or products’ reports demanded by the customers (Chary 2009, p. 15). As a leader in the market, the operations strategy of Wal-Mart has leveraged concerning volume with firm's suppliers. The firm operates with sellers to the point they have a feeling of securing the best quality regarding money spent (Alex & Terry 2011, p. 229). An example can be that the firm runs an automatic recording structure, which is in-line with their clients that allow the firm understands when to re-stock goods. Upon receiving notification, it orders re-supply from the nearest Procter as well as Gamble factory. Then, the goods are moved directly to store’s branch, which distinguishes the items going to every receiving store. Presently, the operations strategy between the receiving store, Proctor, as well as Gamble forms a sound coordination that enable Proctor as well as Gamble to reduce its expenses, which provide savings to the purchasing store (Chary 2009, p. 17).
Wal-Mart has arranged its selves as a leader in the market through employing a simple approach to providing products at lower costs. Through using a sound logistics, which entails the latest technology as well as processes of inventory management, the firm improves its purchasing power, minimizes expenses for the firm, as well as a scale of operations (Alex & Terry 2011, p. 230). Additionally, the firm has joined banking sector. Each month, the company receives about 140 million dollars payments via credit card, debit card, as well as an electronic transfer of check. Through integrating operations strategy to create company's bank, helps the firm save money on processing 3rd party electronic payment (Alex & Terry 2011, p. 230).
All corporations face the threat of competition. For that reason, Wal-Mart leads in setting pricing standards, which compels other stores (retail) to make changes to remain competitive. Ideally, within the congested market as well as Wal-Mart creating the standard for other retails to match costing or pricing, consumers enjoy a wide category of stores to choose (Alex & Terry 2011, p. 229). Wal-Mart consists of different forms of goods, for example, sporting goods, clothing, grocery, entertainment, as well as appliances that expand the market of Wal-Mart to reach other sub-markets in retail that result in stiff competition.
Wal-Mart has sound supply chain management (SCM). The firm employs bargaining power as well as information technology over suppliers to achieve sound SCM. The firm's supply chain (SC) is comprehensively incorporated with advanced IT. The SCM information frameworks are directly connected to the firm's capability to reduce expenses of operations. Ideally, these approaches allow the vendors as well as managers to cooperate in making the decision when to transport some products across the SC (Alex & Terry 2011, p. 229). The operations strategies of Wal-Mart entail wielding the firm’s strong bargaining power. Since Wal-Mart is the largest world’s vendor, it influences or dictates the suppliers to embrace these systems.
Wal-Mart employs shoppers or customers’ behaviors in designing the layout of stores. Such a layout is dependent on analysis of customer behavior as well as corporate standards. The placement of certain products y Wal-Mart in some regions of the stores, for instance, near exist or entrance, is dependent on analysis of shoppers’ behavior. On the contrary, the strategies, as well as layout design for the firm's warehouses, are dependent on the requirement to transport rapidly products across the SC to the retail stores (Alex & Terry 2011, p. 229). The warehouses of Wal-Mart have enough space for parking the firm's trucks, goods, as well as suppliers' trucks. The company meets the needs of layout design as well as the strategy because if its efficiency, cost-minimization, as well as effectiveness in operations management.
Wal-Mart has also gained a competitive advantage through location strategy. The firm stresses on the efficiency of transporting materials, business information, as well as human resources within the company. As such, the location strategy of Wal-Mart entails location of stores within or next to urban regions (Alex & Terry 2011, p. 230). The aim of the firm is maximizing market reach. Wal-Mart's products or materials are made reachable to the firm's target customers via strategic locations of the warehouse. Wal-Mart employs the Internet to manage the information issues concerning making decisions on location strategy. Additionally, the firm uses and implements comprehensive many Internet information frameworks for real-time monitoring as well as reports. For that reason, the primary concern of Wal-Mart about location strategy involves the location of retail stores as well as other related facilities (Alex & Terry 2011, p. 229).
Wal-Mart has secured competitive advantage through sound inventory management. The inventory management of Wal-Mart entails retail-managed inventory model as well as timely cross-docking. The suppliers can access information system of Wal-Mart, in a retail-managed inventory model, when making the decision to deliver products dependent on real-time information on levels of inventory. As a result, the firm reduces stock-outs. Conversely, timely cross-docking enables Wal-Mart to lower its inventory size; hence, supporting the expense-minimization efforts of the company (Alex & Terry 2011, p. 230). Such strategies assist in maximizing the firm’s performance and competitive edge.
Wal-Mart uses effective scheduling to secure a competitive edge. The firm employs conventional shifts as well as flexible scheduling. Concerning scheduling, the stress is on maximizing internal process schedules of the business. By optimized schedules, Wal-Mart reduces losses associated with excess capacity as well as related issues. Scheduling at Wal-Mart’s warehouses depends on present trends and is flexible. For instance, dependent on the approaches or strategies to SCM and inventory management of the firm, suppliers voluntarily respond to adjustments in levels of inventory. For that reason, most of the firm’s warehouse time-tables are flexible (Alex & Terry 2011, p. 229). Nonetheless, the firm has rigid conventional shifts or adjustments for making the time table of human resources as well as store processes in marketing and sales. Such rigid scheduling is required to maximize human resource (labor) expenditure. Wal-Mart periodically adjusts personnel and store schedules to manage expected adjustments in demand, for instance, in Black Friday (Alex & Terry 2011, p. 229).
Wal-Mart has gained a competitive edge in the market through properly managing maintenance needs. The managers in the company handle the maintenance needs by ensuring different forms of resources. The firm ensures maintenance by training programs to keep human resources, committed personnel for tools maintenance, as well as a committed workforce for maintaining the facility. The management of human resource offers training programs or plans to guarantee that workers are efficient as well as effective. The dedicated workforce of Wal-Mart for maintaining facility keeps all the buildings of the company in shape (Steve, John, & Richard 2013, p. 78). The committed employees for maintaining equipment repair, fix, as well as clean equipment, for example, cash registers, cleaning equipment, or computers. The maintenance mechanisms result in firm's effectiveness in addressing concerns of maintenance.
Wal-Mart's operations strategy supports as well as reflects the firm's corporate strategy; this is significant because most decisions can be described as structural in nature. Additionally, such an operations strategy is important for Wal-Mart’s success. It implies that the results or outcomes are not easily altered. Wal-Mart can be locked in many operations decisions that can take many years to alter when the need emerge. They can range from HRM practices and process investment decisions. More often than not, marketing-led approaches leave firm’s operations to address the emerging concerns from a unilateral perspective of what is considered the best for the company (Steve, John, & Richard 2013, p. 79). When corporate management or operations cannot acknowledge the consequences or concerns of relegating management concerns to a winning status, it may be necessary to implement structural adjustments, which are time-consuming, expensive, as well as behind the schedule to ensure a competitive change required to compete successfully.
Wal-Mart exploits the power of its strategic operations to avoid being adversely affected by its competitive capabilities. Additionally, the exploitation of winning strategic operations ensures that Wal-Mart does not remain vulnerable to the competitors that exploit effective operations strategy. Ensuring that the operations are involved entirely in the corporate strategy is a guarantee for success. In Wal-Mart, the corporate executives never assume that operations strategy only handles marketing initiatives. The attention of operations management should increasingly support strategy. The direction, as well as balance of Wal-Mart's activities, must demonstrate its influence on the performance of the company towards attaining its goals via its strategy, as well as on operations' performance, appreciating that all must be executed properly.
Operations Strategy of Wal-Mart
Source: (Developed for this paper)
In conclusion, Wal-Mart has experienced many controversies. Nonetheless, no controversy has hampered the company’s operations strategy since its planning processes are effective. The analysis of operations strategy of Wal-Mart is an excellent example justifying reason the form is successful in present’s fast-paced or competitive business environment.
Bibliography
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Chary, N 2009, Production and Operations Management, Tata McGraw-Hill, New Delhi.
David, B 2008, Operations Management: An International Perspective, Thomson, London.
Mike, P 2000, Operations Management, Pearson Education South Africa, Cape Town.
Steve, B, John, B, & Richard, L 2013, Strategic Operations Management, Routledge, London.
