Abstract
Wal-Mart was founded in 1962 by Sam Walton and since then the company has extended its outstanding retail services to 11545 stores in approximately 28 countries. The company has emphasized on proper management of operations in its stores for a long while to influence its market share. The retail strategy of the company has helped the company to ensure exclusive performance in the industry. It has sustained unique business through respect for promotion, price, place and products. The company has to keep up with the completion from Costco Incorporation, Target Incorporation, Dollar Tree and Dollar General Incorporation.
The SWOT analysis is exclusive in the definition of the position of the company and projection of the future that the company seeks to adopt. The analysis is crucial for the definition of the future of the company through consideration of what needs to be done to ensure progress and continuity. Various recommendations are defined based on the competiveness of the ideas and the situation of the company at the given moment.
Executive Summary
The report entails the Wal-Mart retail strategy. It includes the background information of Wal-Mart incorporation. The company was founded in 1962 out of passion and interest in retail business by Sam Walton. The company has extended its outstanding retail services to 11545 stores in approximately 28 countries. The retailer is among the world’s best private employers with approximately 2.2 million employees. The overall success of the company is based on exclusive management and leadership for massive achievements.
The SWOT analysis of the store operations of Wal-Mart would be major contribution to the success of Wal-Mart in the delivery of high-quality services to its customers. The style is well defined to suit the activities of the organization and sustain its reliability in offering services to the customers over time.
Being the pacesetter in the retail industry, Wal-Mart faces major competition from various companies. The competition is both regional and global as some of the retail companies operate globally. The main competitors are Costco Incorporation, Target Incorporation, Dollar Tree and Dollar General Incorporation.
The retail company has a reliable market segment, which it identified as its target market. The 4 Ps of retail mix (prices, product, promotion and place) have been essentially important to the success for Wal-Mart. In market positioning, the company has been identified as liberal and is defined in extremely low prices for its products.
The success of the company will depend highly on the consideration of the weaknesses of corporation. However, the weaknesses may be handled through implementation of the outlined recommendations. The recommendations are based on the ability of the company to compete and define a direction for its business.
Background Information of Wal-Mart
Wal-Mart is a globally operating American retail corporation. The retail Corporation began with the retail experience that Sam Walton had developed when he was operating a variety store. In 1950, Walton opened Walton’s 5&10, which was a major motivation to his future interests in retail business. Following the passion and interest in retail business Wal-Mart was founded in 1962 by Sam Walton (Bhasin, 2013). Since then the company has been subjected to extensive strategies for growth and expansion in the delivery of business and exploration of the opportunities in the retail industry.
The retail corporation operates a chain of hypermarkets, departmental and grocery stores in various parts of the globe. The company has extended its outstanding retail services to 11545 stores in approximately 28 countries. The retailer is among the world’s best private employers with approximately 2.2 million employees (Bhasin, 2013). Also, it is one of the most valuable companies around the world by market value. The company has advanced over time with the value of the customer being a critical pillar for its growth. Also, the company contributes massively to the wellbeing of the people in the surroundings.
The company has for a long term been the pace-setter in the retail industry with most of its competitors borrowing massively from its business strategies. The company introduced the grocery store, which was an edge over its competitors and it has sustained the grocery sector as the best in the world. Over time, the retailer has invested massively on modern strategies to sustain high sales and assure the customers of quality services. The company has sustained exclusive operational strategies in its branches and supports exclusive growth for its businesses globally (Crossan et al, 2010).
The success of Wal-Mart is driven by a number of values, which may be defined by the recognition and address for the Strengths, Weaknesses, Opportunities, and Threats (SWOT). Being a big company with extremely many departments and operations, it would be advisable to measure the excellence of the company on the basis of specific departments. Each department would be defined accordingly by the recognition of its SWOT analysis so as to help in the definition of the issues that may exist and dictate the relevant recommendations.
The store operations of the company would be major contribution to the success of Wal-Mart in the delivery of high-quality services to its customers. The style is well defined to suit the activities of the organization and sustain its reliability in offering services to the customers over time. In this case, the operations of the store can only be valued as useful if the SWOT analysis dictates their uniqueness.
Strengths
The retail Corporation has embraced technology to monitor the services to the customers. The technology speeds up the services of the customers at the stores without a lot of time being wasted in the queue. The scanners are fast enough to ensure the customers are charged correctly and the transaction takes place in the fastest time possible (Crossan et al, 2010).
Also, the company has hired a lot of employees who assist in various activities of the operations of the retail points. The company has been able to sustain high number of employees following its ability to compensate the employees accordingly. The employees are encouraged to serve the customers better and undertake their duties accordingly.
The company has also emphasized on customer services with the operations being focused to the wellbeing of the customers. The company values its employees and undertakes the duty of protecting the welfare of the customers and assuring them of exclusive services. The feedback of the customers is highly valued (Bhasin, 2013).
Weaknesses
The company serves extremely many customers at a go, which may exhaust the employees at the service point. The company sells a lot of products of different sectors under the same roof thus posing the risk of quality service to all the customers (Holmes, 2011).
Despite the technology advancements in the company, Wal-Mart has been unable to digitize its grocery section. The grocery section requires lot of manual work, which may constrain other sections following the heavy demand for manual workers in the section (Bhasin, 2013).
Opportunities
The company is well known with a record of excellent customer service. As such, the company receives a lot of new customers everyday in exploration of what the company has to offer (Crossan et al, 2010). The company should take advantage of the exploration by new customers.
The automation of most of its processes would also fasten the business activities and operations of the company. The technology advancement in Wal-Mart is an opportunity for growth for the company over time (Bhasin, 2013).
Threats
Other retailers watch and copy ideas from Wal-Mart. Therefore, the company may face stiff competition following better retail operations by the competitors. Also, the company may face social challenges or wars out of its business in the global platform (Holmes, 2011).
Competitive Analysis
Being the pacesetter in the retail industry, Wal-Mart faces major competition from various companies. The competition is both regional and global as some of the retail companies operate globally. The competition is significant to help the company to adopt unique business strategies, which will help in achieving a wide market share and retain its position as the leading retail and Grocery Corporation around the world. The competitors rank on the basis of customer services, pricing, and the general management of operations.
Source (WMT: Wal-Mart Stores Inc Top Competitors and Peers, 2016)
Target Corporation
It is the second largest corporation in discount retail with major control of the American market. The company has massive sales in the United States, which make it a company for Waal-Mart to watch as it may easily scoop a wider market share in the future. The retail company has outstanding operations management, making it attractive to a high number of customers (DeMarco, 2011). It has approximately 1793 locations in the United States thus massive control in the country.
Costco Corporation
Costco Corporation is a membership-only warehouse club in the United States that offer exclusive selection for the member customers. It is the largest membership warehouse in the country offering a wide opportunity for competition to Wal-Mart. Costco has taken control of the club retails where Wal-Mart has had interest but has not invested exclusive energy in the area. As such, Costco may appear as the most competitive in the link to club retail, which may prevent Wal-Mart from becoming the best in the business. The low prices of the products and exclusive customer service in the company would prove competitiveness to Wal-Mart (DeMarco, 2011).
Dollar General Corporation
It is a US based chain of variety stores with exclusive effort on building stand-alone stores. It has focused on serving areas where there have not been other general-merchandise retailers as well as in cities with few retail stores. The company has been strategic to acquire over 280 stores from Interco and 206 stores of the Eagle Family Discount Stores. Therefore, it is a major competitor to Wal-Mart as it seeks to acquire the already won markets as well as create new customers from the regions without retail companies (DeMarco, 2011). The company also has exclusive care for its customers with emphasis on quality services and satisfaction of the customers.
Dollar Tree Incorporation
It is a chain of discount variety stores that trades on its products for $1 or less. The company has approximately 13600 stores in the United States making it one of the main competitors of Wal-Mart in the country. The Dollar Tree Incorporation has been strategic to edge its competitors based on the prices charged and the variety of products. It is keen on the delivery of the required products in the right quantity and prices (DeMarco, 2011). The various products have been categorized in certain ways to ensure they do not confuse the customer when he seeks to purchase.
Field Observation
The company has employees who are dedicated extensively to the services of the customers. They are fast to offer assistance when called to by the customers or when ordered by the operations manager. They are busy in undertaking a number of responsibilities assigned to them through dedication to the achievement of the goal of the corporation in offering services to the customers.
The employees who have been assigned the responsibility of serving the customers at the cashier point are fast and thorough to ensure satisfaction for the customer. They are fast in response when the customer seeks an assistance or clarification over an issue or something that did not go well in the process of service. They are careful to ensure the products that the customer has purchased have been packaged well to ensure such customers will be back for similar services.
They are responsive to the orders given by the manager without delay to ensure everything required in the store is available. They ensure the products are well kept on the shelves and can be seen clearly by the customer. In a case where the customer cannot locate a product, they are ready to help the customer to find the product.
Interview response
The interview with the operations manager is an eye-opener to the cause of success for the company. The company emphasizes on quality services for the customers. It is the duty of the employee to ensure the customers have been satisfied on the services offered. Also, the discipline of the employees has sustained the coordination of operation in the store without major cases of failure by the company. As such, the discipline of the employees comes from the day they are hired since they have to undergo exclusive training program to acquire the desire competence.
Retail Strategy
The success of Wal-Mart may have resulted from the recognition of the needs of its customers and focus to the satisfaction of the needs. The success of the retail company may have been realized following the ability to identify the market, which it needs to sell its products. Once a company has identified a market, it seeks the relevant strategies that would help it in reaching the specific market and make the necessary sales as targeted (Holmes, 2011).
Target market
Wal-Mart Corporation defined its target market by outlining the needs of its customers first. It had realized that the customers wished to have the all the products at fair prices and the desired quality. The company was fully convinced that it would serve a large number of people if it targeted the majority in the American society. As such, the target customers for the company were the lower, middle class and the poor in the society. The company had been convinced that it had the potential to meet the needs of such people who were willing to living under their low income (Crossan et al, 2010).
Retail Mix
The 4 Ps of retail mix have been essentially important to the success for Wal-Mart in recognition as a retail company in the United States and globally.
Product
Wal-Mart is a global retailer meaning it may sell any product an individual may require. The retailer has a range of products in ranges of crafts, movies, gifts, jewellery, food products and stationeries among many others (Holmes, 2011).
Price
Wal-Mart does not manufacture any product. Instead, it procures products globally in large quantities so as to enjoy the economies of scale. The company negotiates the prices for its products under the economies of scale. As a result, the company sells its products at a lower price than its competitors by approximately 15%. Also, different products are on offer at different times based on the demand at the time (Dudovskiy, 2016).
Place
The company has approximately 11545 retail units in 28 countries and under 60 banners. The company sells both in traditional stores and e-commerce methods. It has categorized its operations stores into Wal-Mart discount stores, super centers, neighborhood markets, as well as express stores.
Promotions
Wal-Mart has unique in-store promotional methods which may involve sales promotions in form of product bundling as well as pricing strategies. The company has also allowed customers place online gifts, and the strategy has earned the company high revenues. Also, the company develops unique slogans to attract its customers such as ‘Grab it before it is done’ (Dudovskiy, 2016). The promotional strategies have defined business success for the company in the retail trade.
Product positioning
In relation to the competitors, Wal-Mart seems better positioned to control the retail business. The company has an edge over its competitors as it is defined as more liberal than the competitors. Also, the company focuses on saving the customers money through low prices for the products. In relation to the elements, target charges higher costs but it is equally liberal in its definition of business. On the other hand, Costco is conservative in nature and charges low prices, enhancing competition for Wal-Mart (Dudovskiy, 2016).
Recommendations
The first recommendation for Wal-Mart is based on HR department of the company. To ensure excellent running of store operations, the company needs to train the employees more on competence and customer service. The strategy would make the employees fast in response to the needs of the customers thus avoiding long queues.
Secondly, the company will be required to have its different categories of products well labeled and enough space given for customer to select the product. The related products should be placed close to each other to ensure the customer does not have to walk long distances in the stores to get small portions of products from different corners.
Thirdly, to deal with problem of digitization of the grocery sector, the retail company may adopt bar-coding technology for the vegetables and fruits. The technology will ensure there is no need for many employees to overcrowd the grocery outlets in a bid to serve the customers.
Fourthly, the retail mogul should adopt a strategy where the employees and the executives can give ideas on how to enhance operations for considerations. The managers and directors should meet regularly to analyze the suggestions and implement the most effective ones so as to keep the retail company ahead of the competitors. As such, the company will remain highly competitive to the competitors.
Also, the company needs to focus on e-commerce since there are many globally competitive retailers using the edge. To sustain its competence in the retail business it should to invest more in e-commerce so as to support exclusive trade in the international market and become a major player in the domestic market.
Conclusion
Wal-Mart Corporation was founded by Sam Walton and was sustained by his enthusiasm and skills in retail business. Since 1962 the Corporation has advanced in business gaining a lot of customers in the United States and the worldwide. The company has been highly competitive in the industry thou it is required to be keen on its major competitors Costco Incorporation, Target Incorporation, Dollar Tree and Dollar General Incorporation. The company has clear understanding of its market through recognition of its customers and definition of the best retail strategies to utilize in the definition of the way forward in business. The retail mix for the company has been highly fundamental in the definition of the success of the company through the prices, product, promotion as well as place. Further success for the company will be based on the recognition of the weaknesses and consideration of the given recommendations.
References
Bhasin, Kim (2013). “Wal-Mart Sent A 10-Page Letter To Its Suppliers Warning Them Of Zero-Tolerance” Business Insider http://www.businessinsider.com/walmart-zero-tolerance-suppliers-2013-1
Crossan, M., Gandz, J., & Seijts, G. (2010). Cross-enterprise leadership. Mississauga, Ont.: Jossey-Bass.
DeMarco, A., (2011). “America’s top retailers” Forbes http://www.forbes.com/sites/anthonydemarco/2011/07/18/americas-top-retailers/
Dudovskiy, J. (2016). Walmart Segmentation, Targeting and Positioning - Research Methodology.Research Methodology. Retrieved 21 July 2016, from http://research-methodology.net/walmart-segmentation-targeting-and-positioning/
Holmes, T., J. (2011). “The diffusion of Wal-Mart and economies of density” Journal of the econometric society http://www.hss.caltech.edu/~mshum/gradio/papers/Holmes2012.pdf
WMT: Wal-Mart Stores Inc Top Competitors and Peers. (2016). Financials.morningstar.com. Retrieved 21 July 2016, from http://financials.morningstar.com/competitors/industry-peer.action?t=WMT
Appendices
Interview with the Store’s Operations Manager
Why do you have so many employees in the store?
Answer: The employees are the main support for our customers and they assist the customers in packaging and any guidance they may require.
How do you manage so many employees in the store with different responsibilities?
Answer: The employees have been trained on personal drive and discipline at work. Therefore, they understand what is expected of them and they have to do it as required.
What motivates the operations of the company to undertake responsibilities with such energy?
Answer: The motivation for the company is customer service. Therefore, the employees must work hard to achieve that.
How has the discipline of the employees been instilled?
Answer: The employees undergo exclusive training on services delivery and customer satisfaction before being hired fully as employees in the company.
