Introduction
Wal-Mart is a company that is engaged in wholesale and retail operations, as well as in other units of varying formats around the world (Reuters n.d.). They offer a wide array of services and merchandise at everyday low prices.
B2B Relationships
An example of a B2B relationship that Wal-Mart has is with its suppliers. The suppliers provide Wal-Mart with the merchandise that it displays on its shelves and sell. The supplier then pays for shelf space while Wal-Mart pays for the merchandise. Recently, however, Wal-Mart has made a decision to also charge its suppliers for the storage of goods in its distribution centers and to extend the payment terms (Townsend 2015; Layne 2015). This decision was made in efforts to lower the prices of goods, in turn encouraging more customers to buy from Wal-Mart and increasing the company’s sales.
Clearly, maintaining the company’s relationship with its suppliers requires strategic decisions (An Initial Decision Making Technique 2016) that would enable the company to maintain such relationship without affecting its relationship with its consumers and its bottom line. In this regard, the company’s decision to charge fees for its distribution centers, to extend the payment terms, and to pressure its suppliers to lower their prices is in order to address its problem with declining sales. By further lowering its costs, it can increase its employees’ wages, which would lead to improved customer satisfaction and increased sales. Although the decision and the changes that come with it would pose challenges and difficulties for its suppliers, Wal-Mart believes that in the end, the suppliers also stand to benefit from such changes in the form of increased sales. In this regard, a rational decision making process was also involved (Rational Decision Making Model 2016). However, Wal-Mart has to ensure that the suppliers would be amenable to its decision in order to avoid the risk of losing their business.
B2C Relationships
An example of a B2C relationship that Wal-Mart has is with its customers. They are the ones who purchase the merchandise that Wal-Mart sells. In return, Wal-Mart ensures that the customers are satisfied with the products and services that they provide and that the customers’ needs are met.
In this regard, the decisions that Wal-Mart needs to make in order to maintain this relationship would mostly be operational decisions, which ensure that customer issues are addressed, as in the case with returned orders and helping the customer decide on the products to buy (Developing people through decision-making 2016). Such decisions also involve ensuring that products are always available. As such, Wal-Mart employees need to be able to decide when to restock or when to reorder a specific item. Strategic decisions would also come into play in maintaining this relationship. For example, as previously mentioned, Wal-Mart plans to increase its employee wages in order to improve its customer service. This is based on the presumption that increased employee job satisfaction would lead to improved job performance.
It is important for Wal-Mart to maintain and foster its relationship with its customers; otherwise, they risk the customers taking their business elsewhere, which can lead to decreased sales and decreased revenues. They also risk getting negative customer feedback, which – through word of mouth -- can damage the company’s image.
References
An initial decision making technique, 2016. [online] Available at: < http://www.the-happy-manager.com/tips/an-initial-decision-making-technique/> [Accessed 9 February 2016]
Developing people through decision-making: A npower case study, 2016. [online] Available at: < http://businesscasestudies.co.uk/npower/developing-people-through-decision-making/operational-decisions.html#axzz3zczWGlxA> [Accessed 9 February 2016]
Layne, Nathan, 2015 October 19. Wal-Mart puts the squeeze on suppliers to share its pain as earnings sag. [online] Available at: < http://www.reuters.com/article/us-wal-mart-suppliers-insight-idUSKCN0SD0CZ20151019> [Accessed 9 February 2016]
Rational decision making model, 2016. [online] Available at: < http://www.the-happy-manager.com/articles/rational-decision-making-model/> [Accessed 9 February 2016]
Reuters, n.d. Profile: Wal Mart Stores Inc (WMT.N). [online] Available at: < http://www.reuters.com/finance/stocks/companyProfile?symbol=WMT.N> [Accessed 9 February 2016]
Townsend, Matthew, 2015 September 11. Wal-Mart's suppliers are finally fighting back. [online] Available at: < http://www.bloomberg.com/news/articles/2015-09-11/wal-mart-sparks-battle-with-suppliers-over-margin-squeezing-fees> [Accessed 9 February 2016].
