Introduction
Over the last decade, the retail industry has grown because of the increased need for consumers to shop under one store. However, the top players that have dominated the industry have hardly changed with Wal-Mart and Target Corporation holding the first and second position respectively in terms of size and goods sold (Wal-Mart & Target). The two retail stores have certain prizing, marketing, and market entry strategies that has enable them maintain their rank for many years. Therefore, this research will compare the two retail companies with analysis of their mission statements. Furthermore, Wal-Mart will be analyzed further highlighting aspects that make it the top retail store.
Mission Statements Analysis
Wal-Mart’s mission statement is “to save people’s money so that they can live better” (Wal-Mart). Conversely, Target’s mission statement is “to make Target the preferred shopping destination for guests by delivering outstanding value, continuous innovation, and an exceptional guest experience by consistently fulfilling our Expect More. Pay Less. ® brand promise” (Target). JISC infonet (2011) highlights the eight characteristics of a good mission statement as: identifies the company; liberal from time, space, form, or people; simple and short; creates excitement; action focused; supports the central principle in life; oozes confidence and energy; and simple to implement.
In looking at the two mission statements, the Wal-Mart one is shorter and precise compared to the Target one. This has the effect of being noticed by prospective customers who will be attracted to the statement. It is also simple to implement resulting in a culture that so many people can identify with, which is provision of best prices for consumers. Furthermore, it defines the organization as a retail store for people wanting to save money, a mission that has enabled it make strategic decisions. The strategic decisions that have been brought about by the mission statement in Wal-Mart include: open door policy; 3 fundamental values and beliefs that are endeavoring for excellence, individual respect, and customer service; sundown rule where all queries and problems have to be solved in the same day (Wal-Mart). However, the mission statement needs to be improved in terms of action orientation. There is no proper procedure of how to accomplish the mission in the statement. The statement tends to become too short for highlighting how to accomplish the task.
Target’s mission statement is longer but detailed. The mission statement is detailed and in it contains the smart goals of the company hence action oriented. It also is simple follow and is independent from time, people, or space. The mission statement helps the company make strategic decisions such as providing all the essentials of life; ensuring the environment is welcoming and organized; and designing the items stylishly all in Target corporation stores (JISC Infonet, 2011). However, the only pitfall of Target’s mission statement is that it looks complex and is lengthy. The lengthy statement makes workers and prospective clients not focused on the real mission of the company.
The vision of Wal-Mart is “to be the worldwide leader in retail”, while for Target is “to provide a Fast, Fun, and Friendly environment for guests.” In the case of Wal-Mart, the company is heading in the right direction since it has been the top retail store for the last decade (Wal-Mart). This feat has been helped by focusing on satisfying customers through provision of competitive lower prices. Target Corporation is also heading in the right directions since it has managed to set up stores that have unique products that customers identify with; customers ranging from teenage girls to mature business people. Furthermore, the company has been successful in innovation and uniqueness beating Apple and McDonalds for the best brand recognition in 2008 (Target).
Wal-Mart Analysis
Social Responsibility
The company has been fighting the tag of being socially irresponsible. This notion has been with the company since 1997 when the company was faulted for indecencies such as: employment discrimination by favoring Mexican immigrants since they are cheap labor; blocking unions in the workplace hence denying employee rights; denying low wage workers health insurance; and women discrimination through denying them managerial positions (CSR, 2007). However, since the turn of 2000, the company has been striving to shed off the negative image by engaging in various CSR (Corporate Social Responsibilities). The CSR is enhanced socially, environmentally, and economically
Socially, the company is committed in raising its social awareness and bringing value to people’s lives. Social CSR involves responsible sourcing where: goods and raw materials are obtained in such a way that it is harmless to the environment; customers made to feel safe about the products; and workers paid well for the work they have done. The activities the company takes part in socially are: participating in working groups such as GSCP and MFA forum which help in improving operations and supply chain; building a skilled workforce such as opening of the retail training center in Punjab, India; and working with suppliers to make sure that they produce products meeting social and environmental standards
Economically, the company strives to produce the best quality products at the least cost possible in accordance to their mission statement. It also strives to create jobs to local communities for instance in 2008 the company created approximately 5000 jobs in South America (Wal-Mart). Furthermore, apart from job creation and savings, the company uses its revenues to anchor major sectors like transport projects, education, and civil services. For instance, in 2008 the company made $ 328 million in donations to local charitable organizations in USA (CSR, 2007).
Environmental CSR is aimed at becoming an environmentally sustainable retailer, a pact made in 2005. The activities the company involves itself with have goals of: being supplied with 100% renewable energy; creating nil waste; and selling products that sustain the environment and planet resources. Activities towards being supplied with 100% renewable energy are: pairing energy and environmental services with their suppliers to strive for 100% renewable energy and stores in Canada in 2009 are designed to be 30% energy efficient compared to 2005 stores. Activities in creating nil waste are: using the packaging scorecard in USA to rate suppliers towards sustainable packaging and cutting plastic shopping bags which are expected to be eliminated by 2013. Activities in selling sustainable products include: selling concentrated liquid detergents in all its stores effective from 2008; and making sure that air conditioning equipment in USA becoming Energy Star Certified.
In addition to CSR activities in the three segments, the company also addressed the indecencies that it was associated with. The aggressive measures included: designing stores that incorporated architecture of local culture to demystify the fact that they were aloof with the local culture; introducing health insurance for part-time workers; publishing information of employees’ race and origin to prove that they did not favor Latino immigrants; and the company to accept to follow CRA (Community Reinvestment Act) guideline, which force the company to be more responsive to Corporate Social Responsibilities. All the measures were implemented in 2008 and were aimed at deflating the issue that Wal-Mart was not becoming socially responsible.
Therefore, after highlighting the three aspects, environmental, social, and economic, of CSR it is important to note that its activities are appropriate. Economically appropriate in the sense that the company has taken part in building economies through offering jobs. It is now regarded as the leading private employment organization in the world. Socially, it has improved the lifestyle of both its employees and clients. Clients are assured of safe, fresh, and healthy products that have been tested and passed the necessary standards. Workers on the other hand are armed with proper training and well-being in terms of health insurance making them become motivated and satisfied in the workplace. Environmentally, the company’s activities are appropriate as it is aimed at reducing fossil fuels which cause global warming, and reduce wastes which increase pollution.
Wal-Mart SWOT Analysis
However, the SWOT analysis below will highlight the competitive advantage of the company.
STRENGTHS
The company is a well-known brand in the retail industry. This is majorly because of having vast product ranges all in one collection, convenience for shoppers, and value for money by creditors dealing with the company.
An effective strategy for human resource and development that has resulted in trained employees who understand the value and mission of the company. Example is the retail training institute in Punjab, India for employees.
It global presence through expansions and purchases of other retailers such as ASDA in UK. This increases the revenues and brand value of the company.
Extensive utilization of information technology such as systems that support logistics of products and procurement of supplies. They can also be able to monitor store performances internationally.
WEAKNESSES
The large investment in manufacturing and supplying products is a demerit when trying to react to alteration in the business environment.
The company has diverse product ranges resulting to inflexibility especially when dealing with seasoned competitors such as Target Corporation.
Even though the company is global, it is only found in developed countries, which are few countries.
Despite the extensive IT systems some areas suffer from being unmonitored largely because of vast span of control.
OPPORTUNITIES
The company is only found in few developed countries; therefore it can expand business operations in markets such as India and China.
The company can continue with its strategy of forming large centers in new markets.
They can exploit new market developments which call for localized and mall based stores in new markets.
THREATS
Stiff competition both locally and globally because the company is number one.
The high employees account for high turnover rates and exposure to poaching by competitors.
Exposure to political and cultural problems of countries they are located in.
Intense price competition as a result of extensive outsourcing is a threat.
References
Corporate Social Responsibility: Wal-Mart, Maersk and Cultural bounds of representation in corporate web sites. (2007). Corporate Communications: An International Journal, 12 (1), 41-57
JISC infonet (2011). Characteristics of a good mission statement. Northumbria University. Available at:
http://www.jiscinfonet.ac.uk/infokits/strategy/mission-vision-values/good-mission
Target Corporation, Available at:
http://investors.target.com/phoenix.zhtml?c=65828&p=irol-IRHome
Wal-Mart Corporate, Available at:
http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-irhome
