New Wal Mart Store example essay topic

Wal-Mart is America's largest retailer and is located in all 50 states and is now branching out overseas. Even after founder Sam Walton's death, the company has been able to remain very successful in a highly competitive environment. Wal-Mart's master plan is consistently low prices and high consumer service. The company's high competitive advantage is the result of its ability to offer lower prices and better services than its rivals. An important test of corporate purpose and mission is how well it serves the organization's stockholders. The mission of and organization is its reason for its existence as a supplier of goods and services to the society.

Wall-Mart's stakeholders are the persons, groups, and institutions who are affected in one way or another by the organization's performance. Stakeholders include those individuals within the environment, such as managers and employees. They also include members of the external environment, such as customers, shareholders, suppliers, creditors, community groups and others who are directly involved with the organization and / or affected by its operations. Customers are specific consumer of client groups, individuals, and organizations that purchase the organization's goods and use its services. Suppliers are specific providers of the human, information, and financial recourses and raw materials needed by the organization to operate. Competitors are specific government agencies and representatives at the local, state, and national levels that enforce laws and regulations affecting the organization's operations.

The specific interests of stakeholders are assessed along with the organizations record in responding to them. Increasing the shareholders? value is very important to a corporation who's objective is to grow not only locally, but also globally, and to maintain success in a highly competitive environment. Wal-Mart was able to generate over $3 billion in free cash flow in their 1997 Annual Report, which greatly enhanced shareholder value. This cash flow increased the dividend by 29% while also increasing the size of its share repurchase program. It will also help the company to reach its targeted annual total shareholder return of 15%.

This rate of return has been accomplished by cutting inventories by over $2 billion, thereby saving $150 million in interest costs. Strategic management is the process of formulating and implementing strategies to advance and organization's mission and objectives and secure competitive advantage. Two critical steps in the strategic management process are the analysis of the organization and the analysis of its environment. These steps can be approached by a technique known as a SWOT analysis. A SWOT analysis is the analyses of organizational Strengths, Weaknesses as well as of environmental Opportunities and Threats.

A SWOT analysis of Wal-Mart would include the internal assessment of the organization, which contains the corporation's strengths and weaknesses. Wal-Mart's strengths include manufacturing efficiency, a skilled work force, good market share, strong financing, and a superior reputation. Marts-Marts manufacturing efficiency is probably the best out of all other retail stores. Wal-Mart is currently backed with the latest technology. It has a complex, sophisticated corporate satellite system and computer network that keeps the home office in Bentonville, Arkansas in touch with all operations going on at all stores in the world. Inventories are also monitored around the clock so that all stores are rarely out of the items in which customers are seeking.

A skill workforce is also one of Wal-Mart's strengths. Each new associate is thoroughly trained in skills to better serve the customers and to make their shopping environment more pleasant. When customers come to Wal-Mart, they want the associates to be friendly and knowledgeable of the products while exiting the store in a quick and timely manner. Wal-Mart also has excellent market share. It not only allows employees to purchase stock, but also allows individuals of the external environment to own market shares.

Since Wal-Mart is such a successful organization, it does not need a lot of financing from outside the company. Another advantage of Wal-Mart is a superior reputation. Wal-Mart is the largest retailer, is located in all 50 states of the United States, and is even branching out overseas. Potential weaknesses of a company include outdated facilities, obsolete technologies, weak management, and past planning failures. I do not think that Wal-Mart contains and of these? weak? aspects. Wal-Mart definitely does not have outdated facilities.

New Marts-Marts are being built all over at a steady pace and many of the older Stores are being rebuilt as super center stores. Wal-Mart is also expanding with the creations of more Sam's Clubs, Bud's Discount City (discount warehouse outlets), and an international division. Wal-Mart also does not have any obsolete technologies since it has the newest and most accurate satellite system. Neither does Wal-Mart have any weak management.

The district managers of Wal-Mart do not allow for any weaknesses in their management teams. If there are any signs of any weakness, they are? let go? from the company, and someone else takes their place. I do not think that Wal-Mart would be able to function as successfully as it has if there was any type of involvement of weak management. Also, Wal-Mart has not had any past planning failures, as far as I am aware of, since it still manages to remain the number one retail store. The external assessment of the environment in Wal-Mart's SWOT analysis includes opportunities and threats to the company. Wal-Mart's opportunities include possible new markets, a strong economy, weak market rivals, emerging technologies, and growth of the existing market.

Wal-Mart is always looking for the opportunity to grow by creating new markets. Wal-Mart will occasionally have surveys that require the zip code of the customer to be entered into the register when checking out. This shows what areas people are coming from to shop and can determine if a new store should be located in that area. Wal-Mart's strong economy has helped it to excel over other market rivals. The emergence of Wal-Mart's satellite system has definitely proved to be opportunistic, and I am sure that more technical opportunities will arrive at a later time.

Some of Wal-Mart's threats include new competitors, shortage of resources, changing market tastes, new market tastes, and substitute products. Many other retail stores cannot compete with Wal-Mart. Sometimes when a new Wal-Mart store is opened, other companies will be forced to close because they cannot compete any longer. Wal-Mart's major competitors that have managed to stay in business are mainly K-Mart and Target. But a new competitor could always eventually enter the market that offers better goods and services to consumers than Wal-Mart does. Wal-Mart should never have a shortage of resources with its inventory system that keeps track of all inventory and orders more merchandise when it is getting low.

Changing market tastes should not be a problem either since Wal-Mart offers such a wide selection of products. A core competency is a special strength that gives and organization a competitive advantage. Wal-Mart's distinctive competencies include employee commitment, cost control, carefully planned profitable locations for new stores, and careful attention to customer needs and desires. Wal-Mart's values and beliefs of respect for the individual, service to their customers, and striving for excellence also contribute to Wal-Mart's competitive advantage over other discount merchandise retail stores, mainly K-Mart and Target. Wal-Mart's discounted prices are important to those customers looking for quality at a bargain price. Sometimes merchandise will be discounted even further with roll back prices and clearances.

Wal-Mart also gains a competitive advantage from its innovative technology, which implements the speed in which it delivers goods to customers. As CEO of the company, David Glass has to determine whether any changes to the organization's style, culture, and structure will be necessary to carry the company to a higher level. He must decide whether the company's past strategy will allow Wal-Mart to continue to dominate as a retailer in the 21st century. Glass must also use strategic management effectively. He must look ahead, understand the environment, and effectively position new Wal-Mart stores for continuous competitive success in these changing times. He must focus his attention on clear, consistent, and long-term objectives.

Wal-Mart must come up with a strategy to continue to stay ahead of its competition. I believe that Wal-Mart?'s? Grand? strategy for the next decade consists of adding new retail divisions, both locally and globally, continue offering the lowest prices and good quality, keep good customer service and personnel quality, continue the use of on-line shopping, and keep making commitments to the environment. Porter's generic strategies offer and alternative that gives special attention to the organization's current and potential competitive environment. The three generic strategies that an organization may pursue are differentiation, cost leadership, and focus. Of these three strategies, Wal-Mart should focus mainly on the cost leadership strategy for its?

Grand? strategy. The objective is to have lower costs than competitors and thereby achieving higher profits. Wal-Mart must continue to aim to keep its costs so low that it can always offer the lowest prices and still make a reasonable profit. Miles and Snow's adaptive model states that an organization should pursue product / market strategies that are congruent with the nature of their external environments. Wal-Mart should follow the prospector strategy, which involves pursuing innovation and new opportunities in the face of risk and with prospects for growth.

This will enable Wall-Mart to continue to lead the industry by using existing technology to new advantage and creating new products to which competitors must respond. Wal-Mart is a company where prices are low and value and customer service are high? every day. Because Wal-Mart carefully controls expenses to maintain its low price structure, customers do not have to wait for a sale to realize savings. Growth is necessary for long-run survival in a competing organization. Wal-Mart pursues aggressive growth nationally and is embarked upon an international one..