Walmart is the largest retail corporation of discount department and warehouse stores in the world. With a global footprint in 28 countries as of 2017, the company is able to offer a wide variety of merchandise and services to the public around the world at some of the lowest costs (Company Facts, 2018). The company is able to have full control on prices through selectivity with its suppliers and manufactures and aggressively demanding continuous cost reductions and improvements. With dominating influence in the overall world economy, the company has enough leverage to stir the markets in its favor, helping them achieve their mission.
Walmart’s largest strength is the expansive network of distribution centers and stores. Stores are geographically placed strategically so 90% of the U.S. population is within 10 miles of a Walmart store (Cheng, 2018). Walmart could potentially retain its loyal customers that otherwise could be lured away by the ease of online shopping by using this infrastructure as a platform to build their growing e-commerce sector. The scope of their involvement in communities across the United States has put Walmart in a unique position of offering online grocery pickup. (Bowman, 2017)
2: Company Vision, Mission & Values
Walmart’s vision is to provide the best retail experience available, as stated “To be the best retailer in the hearts and minds of consumers and employees.” (Walmart, Inc., 2017) They want to be the best retail chain in the hearts and minds of both shoppers and employees. Walmart envisions a future where they offer a seamless shopping experience across every device, and in every location.
(Walmart, Inc., 2017)
Beyond improving the shopping experience, Walmart wants to be the first choice the public thinks of when they need something and to have the loyalty of their customer over their competitors. One of the ways Walmart will accomplish this is by investing in its employees. Including employees in their new vision statement shows that Walmart recognized that they need a re-energized commitment to their employees. Being seen as a better employer improves their image in the communities they serve and encourages more positive employee customer relations.
Walmart’s largest strength is its distribution centers and expansive network of stores. Walmart has been able to geographically place their stores in such a way that 90% of the U.S. population is within 10 miles of a Walmart store (Cheng, 2018). Using infrastructure as a platform to build their growing e-commerce sector will be critical for Walmart to sustaining loyal customers that could be lured away by the ease of online shopping. The scope of their involvement in communities across the United States puts them in a unique position to offer online grocery pickup. (Bowman, 2017)
3: Goals, Objectives & Strategies
Measurable goals Walmart has put out in new releases tend to coalesce around the concept of refactoring their stores and distribution centers to meet the needs of their growing e-commerce sector. Growing their online sales is the top priority, Walmart “Anticipates sales growth at Walmart U.S. eCommerce to be about 40 percent”(Bowman, 2017)
One of the objectives that existing store fronts can accomplish is serving as pick up locations for online grocery sales. CNBC reported that one in four Americans order some groceries online. Online grocery sales are expected to continue to rise, reaching 20% of the e-commerce market by 2025. (Daniels, 2017) Walmart “Expects to add 1,000 online grocery locations in Walmart U.S.”(Bowman, 2017) Tapping into the existing Walmart location will allow convenient pickup for online purchases for 90% of the population.
In terms of sustainability, Walmart’s goal is to “Achieve Zero Waste** in our own operations in the U.S., Canada, the U.K. and Japan by 2025.” (Walmart, Inc., 2017)
While new stores are not expected to open in the United States Walmart is still growing abroad. “Walmart International expects to open approximately 255 new stores with a focus in key markets such as Mexico and China.” (Walmart, Inc., 2017) Connections made in China between (idk connect in the farm to fork thing in China with IBM)
Walmart has several strategies to accomplish their mission statement of being the best in the hearts and minds of their employees and patrons including: going green, engaging in the community, focusing on employees, acquiring quality e-commerce brands, and strategies to help them continue to lead on price. Quality branding combined with leading on price is a source or pride for employees and ramping up efforts to invest in employees will increase their loyalty. Green initiatives and engaging in the community plays directly to the hearts of consumers while improving quality and continuing to lead on price plays to their minds and pocketbooks.
Walmart has “raised the wages of all U.S. hourly associates hired before Jan. 1, 2016, to at least $10 per hour.” (Walmart, Inc., 2017) Employee training is one area where Walmart has taken the initiative to be proactive. “More than 225,000 associates will receive up to six weeks of specialty training and graduate from the academies in 2017.” (Walmart, Inc., 2017) Training assists employees in feeling like they are apart of Walmart and leads to better in store experiences for both employees and customers. Focusing on a career path gives long term employees the leadership skills they need to run individual stores and departments.
Part time vs full time is going to be an issue Right now Walmart is shifting to hiring more part time because it is cheaper and then ramping them up to 40 hours a week during high seasons like christmas and back to school.
One of the strategies that Walmart is implementing to achieve their goal of trying to use one hundred percent renewable energy for their Fleet of trucks is by improving techniques for loading, routing and driving. Walmart has also been collaborating on new technologies. All together their goal is to move ahead with an efficient fleet of trucks to greater support their supply chain in light of the growth of their e-commerce business. Their logistical network is changing and evolving as they grow to encompass increasing online business. They will have to change their approach to distribution and delivery as well as vendor relationships and packaging.
Another element of going their going green initiative is adding LED lights in their stores and parking lots. Walmart isn’t just making these changes to their own infrastructure. They are also phasing out the sale of compact fluorescent lamp bulb bulbs in favor of LEDs. The level of commitment to the green strategy is seen throughout their stores. Walmart is focusing on managing energy use by measuring and monitoring its use to optimize consumption.
A few strategies Walmart has initiated to improve their community relations include conserving natural habitats, partnering with colleges for capstone projects, providing scholarships and funds to the community as well as employees, and assisting with disaster relief.
Walmart collaborates with the National Fish and Wildlife Foundation to help establish + acres for America program. Their commitment to the program can be seen through its protection of 1.2 million Acres through 72 projects in 35 States.“The program has also connected over 10 million Acres of protected lands to support landscape style conservation and Wildlife mitigation”.
Walmart has partnered with several universities over several projects. One example is their partnership with Cornell University to train more than 70,000 Apple farmers in China. Training apple farmers to plant high-density apple orchards and allow for increased plant diversity and a higher yield showing a commitment to community and they’re supply chain.
With regard to college scholarships Walmart has distributed more than 1,700 scholarships to their associates this year. 74,000 associates have enrolled to use Walmart Rosetta Stone partnership to learn languages since 2014. A commitment to learning and training facilitates Walmart goal to be first in the hearts and minds of their employees.
Walmart has supported communities that have been hit by disaster. For example, in Flint Michigan, Walmart not only provided bottled water, but they also provided a solution to the difficult challenge of recycling in the face of a water crisis. Facilitating the communities’ secondary need as well as their primary. One of the ways Walmart is able to assist in so many natural disasters is through the Emergency Operations Center which collaborates with first responders as well as nonprofits providing their logistical and operational expertise assists Volunteers in responding to disasters.
In a practical sense, Walmart has grown their e-commerce business unit in the United States. Walmart acquired Jet.com and made the founder Mare Lore president and CEO of Walmart US e-commerce. Lore has led Walmart to acquire several other quality online Brands such as ModCloth and Moosejaw. Their focus on quality will improve Walmart’s overall presence in the e-commerce industry and allow them to be a real contender with other stores that are able to provide specialty products through an online market.
Walmart’s strategy to be more energy efficient and compete in the e-commerce industry does lead to a challenge when it comes to leading on price. Some of the solutions and strategies Walmart has implemented on price include cross-docking, controlling suppliers, and having more distribution centers in North America than any other competitor.(Vij, 2017)
4: Business Model
Walmart is comprised of three different business segments: Walmart U.S, Walmart International, and Sam’s Club. Each business segment has a targeted customer base and varying product lineup identified in Appendix A.1. Walmart has an incredible footprint not only in the United States where they have a presence in all fifty states, but have in discount stores in forty-two states and small stores like the neighborhood Walmart in thirty-one states (Vij, 2017). Walmarts innovative business model has allowed them to be the largest retailer in the world with over 11,000 stores, in twenty-eight countries with a workforce totaling over 2.2 million employees. (Vij, 2017). With ever evolving consumer preferences, Walmart has continuously improved their business model to satisfy the needs of their customers and has continued as the dominant retailer. Walmart has based its business on four principles to ensure their success: Lead on price, invest to differentiate on access, stay competitive on assortment, and deliver a great experience. These principles can be found in Appendix A.2 and A.3 with the cost and benefit elements in the Walmart business model. The first principle of leading on price is achieved by the negotiation power that Walmart has over its suppliers. A dominant negotiation style over its suppliers allows the company to strategically sustain its low price power over its competitors. With rivals such as Amazon, and based on its second principle, Walmart has strongly reinvested in the access paths for its customers. Walmart has launched several new digital access points to its offerings such as Click and Ship, Pick up today, and movie streaming services. In parallel, it also provides other services under one roof such as: check cashing, money orders, and wire transfers. The third principle Walmart has built its business model foundation on is to be competitive on assortment. Walmart has consistently been the leader on varying product assortment strategies that cater to local demographics and to international businesses. The fourth and final principle is to deliver a great experience. Walmart has a workforce of over 2 million people world wide. Employees are crucial to the success of Walmart as a company. Throughout its history, Walmart has been plagued with criticism for its unfriendly employee policies including lower wages and minimal training and development programs. Recently, Walmart has announced its initiative to reinvigorate its commitment to their employees by increasing wages and training programs.(Vij, 2017) Walmart continues to grow and be the top retailer in the world because of its innovative and continuously improving business model.
5: Management Characteristics
The overall philosophy of Walmart’s top management is to provide a means of obtaining affordable products for all consumers in order to make positive choices such as purchasing healthy foods and supporting sustainability as an option without sacrificing additional income to do so. Many of Walmart’s top management employees have worked their way through the ranks from blue-collar jobs with the opportunity provided by such a large global retailer. Each of the executive employees has a college education and positively influenced the growth of the business. See appendix F for details of each executive leader.
Sustainability’s importance is highlighted by its inclusion of the position of Chief Sustainability Officer, filled by Kathleen McLaughlin. Her philosophy is that “we have the ability to help create market-based solutions—where the behaviors that result in better environmental and social outcomes are also the behaviors invented by the market.” (Walmart, Inc., 2017 p.5)
Walmart not only strives to create shared value with the customer, but also treats employees like customers in this sense, with a strong emphasis on philanthropy and employment opportunity. The company is largely supportive of military veterans and an advocate on equal opportunity for women in the workplace, including women-owned and diverse suppliers. Women comprise 55% of the total workforce and 43% of management of Walmart in the U.S. (Walmart, Inc, 2017 p.8)
Walmart’s organizational structure at the executive level is organized by dividing the business leadership into its online and in-person retail structures of its three main store categories. There are separate leadership roles for United States stores, international stores, U.S. e-commerce, and Sam’s Club stores. Each of these four sections has a president and CEO, with Doug McMillon as the President and CEO of the entire company. However, international e-commerce does not have a separate executive leadership. As listed on Walmart’s corporate website, there are stores in 28 countries but commerce websites in only 11.
6: External Environment Analysis
6.1: PEST Analysis Summary
Walmart has grown to such an extent that its influence in both the political and economical fields is significant; the company has been able to use this leverage to his advantage making it a stepping stone in the company’s rapid success. Even though Walmart has been able to replicate an efficient system to bring one of the lowest prices everywhere, it has also brought with it an unbalance in the economy fed by the way the company aggressively pushes its suppliers for cost reductions and supply demands. Resulting in suppliers going bankrupt, creating unemployment and the need for those laid off workers to look for cheaper purchasing options such as Walmart, therefore creating a vicious cycle. Additionally, the concept that Walmart has generated a reputation of being a company that underpays its workers. The result is a divided feeling for Walmart that might cause some clients to look elsewhere to do their shopping.
To counteract these factors, Walmart is trying to re-shape its image to one that can allow for more sinergy with its customers. Facing the new online market trend, Walmart is investing in new and innovative technology to provide its customers with new shopping experiences. In hopes of retaining its current clients and attracting new ones along the way.
6.2: Five force Analysis Summary
Walmart’s current strategic position is ideal for capitalizing on its strengths. It is in a perfect position to win in both the big box and e-commerce marketplaces. The main threat is from other rival entities that are seen to bring the customer additional benefits such as access to media sources, improved quality, or trendy/niche items. Tech savvy customers in the suburbs have the most bargaining power and can push Walmart to develop solutions that are specific to their needs, while suppliers have a weakened position due to Walmart’s large market share. Overall, the recent uptick in industry rivalry has been a benefit to Walmart, pushing the organization to grow in new marketplaces. In the future, we will see Walmart not only competing, but dominating in the e-commerce marketplace utilizing its significant network of distribution centers and storefronts.
7: Internal Environment Analysis
7.1: SWOT Analysis Summary
Walmart’s biggest strengths are its footprint and logistics system. The company has been able to use strategies such as creating its own line of products to increase its revenue. It takes advantage of a process called “Cross-docking”, taking products directly off inbound trucks from suppliers and placing them directly on outbound trucks to stores. Cross-docking greatly reduces the amount of times the products are touched, limiting the amount of damage due to shipping and handling, and avoids requiring stocking space in warehouses. The company is able to simultaneously eliminate costly waste by utilizing lean principles in the process.
Entering into the e-commerce arena, Walmart is faced with new challenges as a result of its current weaknesses. One of them is the sluggish start in the e-commerce field which puts Walmart in a clear disadvantage against companies that specialize in this field. Walmart will need to play “catch-up” in this arena, especially with such competitors like Amazon.
Allowing third party companies to sell their products through Walmart may be one of the biggest opportunities the company has to increase its profit margins without having to invest in inventory space or shipping costs.
Walmart has strengths that it can use to catapult itself to the top of the e-commerce marketplace. With these strengths, Walmart can use existing storefront to facilitate pick up of online groceries sales. With efficient leadership and effective business strategies, Walmart can be the first company that any person in any location will think about when they need any product.
In order to succeed, Walmart needs to ensure their current investments are capitalized in the future. The company needs to widen its image to appeal to a broader demographic. Walmart is positioning itself to become the most powerful shopping conglomerate for both storefront and online shopping.
9: Engineering Analysis Summary
Walmart employs project managers and program managers for its project planning needs including: operations research, training and communication, and digital acceleration. (Walmart Careers, 2018) It is competitive, but not the leader in the e-commerce field, following Amazon and Apple in 2016 online sales. (Zaczkiewicz, 2017)
Implementation and Investment
Walmart continues to invest in its expansion. It has its own corporate real estate and construction managers. (careers.walmart.com, 2018) Walmart has opened over four thousand stores in the United States and expanded internationally to almost twelve thousand stores globally. Its expansion matches store formats to the needs of the communities it serves, creating opportunities and bringing value to customers around the world. (corporate.walmart.com, 2018) Walmart “expects to add 1,000 online grocery locations in Walmart U.S.”(Bowman, 2017)
Walmart’s software division has implemented Agile for rapid and flexible software development. Walmart “using the Agile approach was a response to the increasing complexity and dynamic market conditions that require solutions to be delivered faster, according to a 2013 report.” (projectmanagement.com, 2014) Walmart has strongly re-invested in the access paths for its customers and has launched several new digital access points to its offerings such as Click and Ship, Pick Up Today, and movie streaming services. It also provides services under one roof such as check cashing, money orders, and wire transfers.
Evaluation for research performance:
Walmart strives for efficiency and effectiveness in reducing overall time-to-market, aiming for Just-In-Time delivery. Allowing third party companies to sell products through Walmart is one of the biggest opportunities the company has to increase its profit margins without having to invest in shipping costs or space for inventory. Walmart has been increasing its market share and profits due to category-leading products. It has significantly reduced delays, defects and cost by improving product quality while reducing downstream costs such as engineering change orders and warranty claims. Walmart has been increasing the effectiveness and return on investment of its engineering and research and development investments.
The reduction of business risks is associated with product failures. Using the Agile approach was a response to the increasing complexity and dynamic market conditions that require solutions to be delivered faster, according to a 2013 report. If comparing other companies’ best practices to propose possible improvements, we see that Walmart’s competitor Amazon.com Inc. began using Agile for over a decade. (projectmanagement.com, 2014)
10: Human Resources & Organization Structure Summary
According to Dave Ulrich, the objectives of the human resources department of any company is to align human resources and business strategy, re-engineer organization processes, listening and responding to employees, and managing transformation and change. The Human Resources department at Walmart has implemented a continuous hiring and firing policy to continually develop and train their employees. With access to a large workforce, Walmart is able to immediately fill and flex headcount to reduce the amount of time of unfilled positions. (Thompson, 2016) Human Resources are also taking the lead to re-engineer the company’s current organizational processes. Walmart utilizes special software programs to analyze changes in the workforce. These tools are able to cross develop its employees, who are then able to broaden their current roles and step into other roles in times of low performance. The human resource problems can be mitigated through job rotation, flexibility, incentives, and reward programs for high performers. (Thompson, 2016) Arguably one of the most important roles of the Human Resources department is to listen and respond to employee concerns. Walmart’s Human Resources department needs to validate its own training processes. The company uses sales criterion as a metric to measure the effectiveness of its Human Resources group. The company uses feedback from supervisors, employees, and customers to detect issues in its current processes and training effectiveness. (Thompson, 2016) Like any company, the organization needs to be flexible and adaptive to changes in the workforce. When faced with shortages or a surplus of eligible workers, the Human Resources department utilizes its information technology department to target specific areas in the company that will require additional resources. (Thompson, 2016)
The organizational structure is considered to be a hierarchical one. Walmart’s organizational structure is hybrid with certain degrees of standardization, and decentralization. This standardization has clearly defined roles and responsibilities. In the hierarchical structure with vertical lines of command, all decisions are made at the executive level management, and is cascaded down throughout the organization. (Thompson, 2017) The organization also has some sense of decentralization within its structure; each department has its own manager, who then cascades directives down from upper management to the hourly clerks. (Thompson, 2017) The organization structure has proved to be very effective throughout its history by launching the company to one of the largest global retailers.
11: Analysis of 4P Summary
The retail giant offers a wide range of products from tangible items, to services such as financial and wireless phones.
Its retail strategy focuses on offering low prices in every product.The company targets its products and retail strategies to specific population groups, classified according to social classes and lifestyles.Based on social classes, it targets low and middle income shoppers. Based on lifestyles, it targets consumers living paycheck to paycheck, high tech bargain hunters, and frugal shoppers.
Walmart’s retail service is available to its customers in four different shop formats: supercenters, discount stores, small stores and online stores.It boosts a strong network of distribution centers, each one of these supporting up to 90 to 100 stores and clubs in each region. It even has its own fleet of trucks and has recently added specialized e-commerce fulfillment centers to fulfill its online orders within two days or less. Recently, Walmart has added a new shopping segment to its online field targeted exclusively to third party sellers called Walmart Marketplace (Moloney, 2017)
By doing a partnership with the giant Google, it has been able to expand its product portfolios to other shopping sites such as Google Express shopping services. Walmart has also made it possible to deliver perishable products to the consumer’s home by partnering with Uber. (Wahba, 2017)
Price has been embedded in Walmart’s roots since its inception and this foundation has remained unchanged throughout the years. Its strategy of “Everyday Low Prices” (EDLP), where the company pushes the marketplace sellers to keep their costs down instead of relying on discount coupons or promotions, helps customers to find low prices at any given time. Even with these low prices, the company is able to turn profits thanks to its large volume of sales.The company uses its strong influence in the world economy to leverage some of the political legislations related to the retail service sector, allowing Walmart to keep costs down.
For its online sales, the company cannot follow the same scheme of low prices due to the higher costs that takes to pick and ship single products to the customer’s door (Stern, 2018), so it offers products with a slightly higher tag price than those offered at the store. To counteract this, and to attract more customers to buy online, it has been able to offer from free shipping on orders above $35USD to discounts on items found online but not at stores
Walmart is able to keep its prices down by not over-spending on advertising. It is currently cutting down on advertising in general, from TV broadcasting advertising to printed advertising such as newspapers and in-store displays. On the other hand, it is emphasizing on promoting online advertisement by starting to show banner ads from its third-party sellers, which in turn has opened a new source of income for the company. (Kim, 2017). The company is working more efficiently by merging the data sets of its online with the in-store sales to provide more targeted ads on its campaigns
12: Key Ratios Summary
Walmart performs extremely consistently on different financial ratios over time. Compared to Amazon, Costco, and Target, Walmart appears to be more financially stable. Walmart is in a strategic position due to the relative lack of debt and it also provides consistency to its shareholders. Over the last 9 years Walmart has had a lower liquidity ratio than the comparables, at approximately 0.8 While Costco outperforms Walmart in operational efficiency, Walmart comes in at a respectable ratio of 8. Walmart, Costco, and Target have comparable financial leverage ratios, while Amazon trails behind the pack due to recent debt. Similarly, for the debt to equity ratio Amazon falls short starting in 2014.
Looking towards return on asset (ROA) and return on equity (ROE), Walmart outperforms the comparables and is incredibly consistent over the nine year span. Showing that Walmart is in an extremely solid financial position. Amazon does not give dividends to stockholders so only Walmart, Costco, and Target can be compared for the dividend policy ratio. Walmart is the clear winner until 2014 when Target begins to reward stockholders with dividend growth unproportional to its revenue. Walmart’s financial stability is displayed over and over through the key financial ratios.
Major Issues and Strategic Alternatives Review
Walmart is a titan in the retail sector and has been successful for many years. However, for a large company, Walmart has some current issues that impede further success in the marketplace. In this case study, we will identify these issues and use some problem solving techniques such as issue trees, root cause analysis and fishbone diagrams, in order to identify the root causes associated with these problems; then we will use an analytic hierarchy process to propose the most viable solutions for these problems.
The first issue to be addressed will be the stagnant overseas expansion due to the high competition of breaking into new markets. Mature, discount grocers are already present in the overseas market: Aldi, and Lidl are giving Walmart more competition than originally thought. Walmart is known for its low prices, however the European market is fighting back with not only price, but quality as demanded by the European market. This new level of quality products is different than what Walmart has done for years of sourcing low cost items contributing to its success. The European discount grocers have won over customers from competitors by attracting more affluent customers with their mid-tier quality products (Felsted, 2017). Apart from increasing quality, Walmart is also having some trouble identifying customers in European locations and determining what they want on the shelves (Loeb, 2014). In parallel to misunderstanding customers, the customer mindset is another battle. In Europe, customers expect large stores to be more expensive than the smaller neighborhood market stores. Customers want higher quality in smaller volumes, rather than the bulk, big volume products Walmart stores are known for (Loeb, 2014). The last major contributor to the slow overseas expansion of is the inability to build its major supermarkets due to the local restrictions and regulations in these countries (Loeb, 2014).
Another major issue impeding Walmart’s future success is the current state of employee dissatisfaction with the company. Walmart not only has a long-standing problem with employee dissatisfaction, but also has bad press with respect to employee work conditions, wages, intimidation tactics, and excessive overtime hours. After conducting the fishbone analysis (Appendix B) it was determined that the root cause of the employee dissatisfaction with Walmart stems from the severely understaffed and overworked employees. The low headcount is determined not by an individual store level, but on the corporate level (Pendola, 2014). To combat the low headcount, Walmart has typically hired many positions for seasonal work, which are no longer required after the Holidays. This causes more of a burden for the regular employees who are required to train the seasonal and temporary workers (Bhattarai, 2017). Walmart is conducting business this way in an attempt to keep labor costs at a minimum to protect Walmart’s profit margins (Wahba, 2017). Executive leadership attempting to protect profit margins, which leads to the severe understaffing issues, is the root cause of the poor employee morale at Walmart.
The last issue that will be discussed in this case study is the decline of online sales from Walmart. Declining online sales stemmed from inventory replenishment that was overlooked when Walmart acquired several ecommerce companies. The inventory replenishment problem was a result of overstocked warehouses with seasonal items, which was taking up storage space for normal products. Therefore, Walmart was unable to fulfill customer orders, which is detrimental to the future success of Walmart. More people are ordering products online versus going to a brick and mortar store, Walmart is desperately playing catch-up to Amazon user friendly experience. The lack of inventory control, which is leading to the inability to process online customer orders is the determined root cause shown in the fishbone analysis (Appendix C) of the diminishing online sales impeding the ecommerce success for Walmart.
Strategic Alternatives Analysis
The stagnant overseas expansion of Walmart has been attributed to competition from Aldi and Lidl. This situation is hampered since Walmart is not previously known for providing high quality goods at low prices. Without, the existing competition from Aldi and Lidl, new customers would be more likely to give Walmart a chance and experience the quality of the goods for themselves. Walmart backs its merchandise purchased in store and products on Walmart.com can be returned or exchanged within ninety days of purchase with or without a receipt (Walmart Policies and Guidelines, 2018) However, other stores offer price match policies which counters the incentive for new customers to try out Walmart for its Everyday Low Prices as advertised.
A strategy to set Walmart apart from its competition is to better understand the reason behind the areas where it is doing well such as continuing growth and expansion in Mexico, China, and Canada, and then apply the implementation of successful procedures to other geographical regions for improvement. A potential consequence of this strategy is that the cultural differences in regions can attribute to what works well, in other words, the factors for success may not translate. If we analyze other global service industries, for example fast food chains such as McDonalds, cater menus differently by region. Walmart needs to keep this in mind when applying successful strategies in targeted regions. This strategy is feasible with Walmart’s current resources and finances and would most likely include advertising, store layout, and goods selections specific to the region. As shown in the analytical hierarchy process in appendix D, this is the most beneficial alternative for Walmart’s growth.
The next ecommerce strategy Walmart is on the path of is increasing the accessibility of its readily available goods through additional points of distribution. Its goal is to combat the diminishing of online sales growth. Walmart has already started this as it began to ship items directly from stores (Levy, 2016) Walmart has a private fleet of trucks covering the United States. However, competing with same day delivery services that its competitors offer will be the key to sustaining its growth. The consequence of not providing this service is the appearance of weakness in logistics and technology advancements in the eyes of its customers if it is unable to match the competition. This past holiday season, Walmart added more holiday merchandise like electronics, toys and gifts. However, it did not stock enough everyday items, which hurt sales (Bose, 2018) It is hard to predict if this distribution change is suitable for Walmart because the other competitors such as Amazon are charging for their premium services, but there is no reason Walmart cannot create a premium membership level, in which case the question is if this is acceptable match to its Everyday Low Price philosophy.
Interestingly, groceries are a fast growing sectors of the online marketplace. Walmart can dramatically benefit from focusing on its grocery delivery and store pickup. Walmart could take a more innovative approach by including meal planning into its grocery department. Also, educating the public on how to use the grocery products that are offered at Walmart. Other services have had trouble keeping members, but Walmart would have the added benefit of being more cost effective and even when members no longer need the recipes they will still need the grocery products Walmart stocks. While it is an interesting solution to have meal planning as part or Walmart’s lineup, it did not hold up to the other alternatives in the analytical hierarchy process. Further analysis would need to be done to determine in this could be viable in other markets.
Walmart must continue to combat the perception of employee dissatisfaction with a strategy of implementing modern workplace environment. It already has internal growth opportunities and full time employee benefits, but lacks in adding additional motivation factors to excite the millennial generation to join its workforce. It does not need to add slides and napping pods to the storefronts as competitors have done, but needs to stay competitive with monetary employee growth incentives and more generous bonus distributions. It currently offers a bonus of up to $1,000 for employees who have twenty or more years of service, with tiers starting at only $200 for less than two years of service (Peterson, 2018). Motivation to share in the company’s success should increase with sharing in the profit. As shown in appendix D, the analytical hierarchy process shows that this is a feasible alternative that should be considered. There are challenges with increasing its wages since Walmart is publicly owned. It cannot be too generous in dividing compensation because it needs to pay the shareholders. It also needs to avoid the perception that it’s frivolous in wages payments or its customers will think they are not getting the best value for their goods. Therefore, the wages increases did not score well in the analytic hierarchy process.
Employee Profit Sharing Program
Regional Approach for Each Overseas Market
Employee Profit Sharing Program
Regional Approach for Each Overseas Market
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