Wal-Mart is a global organization in a highly competitive market, it has a strong chain of supply, and its structure of logistics is tight. It is a large chain of supermarkets where it is operational in all countries of the world and primarily in the United States of America. Started with the aim of making profits, Walmart is a non-governmental profit making organization. It has a wide recognition for running its discount department stores. (Galloway, 2009)
The biggest global chains of supply globally belong to Walmart organization. It is a supplying outlet for many products including SLP1, FMCGs, appliances and garments with multiple channels of distribution and suppliers hence a vast and complex supply chain. It has a philosophy to stay at the cutting edge in regards to the portion of supply chain. The founder of the renowned organization was Sam Walton back in the year 1962. In October 31 1961, it got its incorporation and appeared in the list of New York stock exchange in the year 1972. It has the most employees having in mind that it is a private organization ranking it fourth commercial employer in the world. Because of having many experienced employees, it is the largest in grocery retailing industry with 20% grocery retail in the US. Walmart is also present in the United Kingdom where it owns Sam’s club.
International financial manager
Wal-Mart being an international company requires having an international manager. Wal-Mart no longer has an international financial manager as the previous one ceased by the international financial manager. Currently, a financial manages the international finance under the leadership of Charles Holley who is the chief financial officer. When he took office, the company for instance was going through a bankruptcy risk which he well managed and helped him acquire the financial officer role as a promotion. The international finance office is at Wal-Mart’s headquarters and Charles Holley is the head. Many people recommend the firm for its management of international finance and FX risk.
Wal-Mart’s approach to managing foreign risks
Wal-Mart’s global foreign exchange market is very big with a daily turnover of from $3 million to $4 million. For example, Wal-Mart presents its financial statements in US dollars but has outlets from all over the world. This means that it can gain or lose money because of fluctuations in the exchange rate between the dollar and the foreign currency used in the locations it has offshore businesses. Wal-Mart uses three methods to manage foreign risks. The first method is by entering into forward trades to lock in the exchange rates. This has to involve the bank in the location and this is where the biggest international finance decision matters.
The second method is using the global banking system and the third method is where Wal-Mart borrows in US dollars to minimize the balance sheet impacts on liabilities, which comes in when currency moves up or down to the dollar.
International finance profile and location
Wal-Mart’s international finance headquarters and distribution centre is near southwest Florida. It lies in the community of arcadia and it is the most advanced facility in terms of technology in that area. Sitting on 865,000 square feet, the distribution centre is large and costly. The buildings are magnificent and over 600 people work in there. It is like another gated community. The office has cranes and automatic machines, which make the work easier and increase profit margins. The location of the office is strategic because many considerations have been put in place and most of all it is central. (Kidd, 1994)
Wal-Mart’s foreign exchange risk and international finance
Foreign exchange risk concerns the changes that create risks in foreign currency levels. Wal-Mart’s assets, liabilities or profits or cash flow stream regardless of whether it is certain or not has direct exposure to exchange risk. This happens when a currency movement changes for better or for worse, the international financial office handles the situation taking into considerations details like currency value and risk at hand. Exposure arises when the currency moves from one country to the other having in mind that Wal-Mart is a global company.
When the firm is handling international orders, the international financial manager handles everything. For example, if an outlet in a different country requires assistance from headquarter regarding finances; the firm makes sure the rates get to the other country as they are supposed to be in that particular country. International finance is the backbone of international market. The firm therefore gives the office all the support required to make sure that everything turns out well.
Conclusion
Wal-Mart is a worldwide company that deals with chain supply and its operations cuts across all classes’ social status including the poor, middle class and the rich. Without profits, there could be no existence and expansion of this organization. Walmart has good strategies that make it remain on the competitive edge having in mind that the organization thrives in a competitive market. Its nature of operations facilitates its good long-term investments. (Kidd, 1994)
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