Wal-Mart commenced operations in the 1950s in Arkansas. The entity then was a minute retail business owned by its founder, Sam Walton. He commenced operations after purchasing it from a resident. These were the first steps towards founding the largest retail firm globally. The entity commenced offering extensive discounts from its early days. This resulted in an enormous clientele base hence; facilitating the expansion of the entity. Hefty discounts resulted in lesser prices. Essentially, this increased the clientele’s purchasing power. According to the founder, discounts were the expansion strategy for Wal-Mart (Franklin 2001, pp.102). The entity commenced with a few shops in Arkansas.
Nonetheless, the last six decades have resulted in the exponential expansion of Wal-Mart (Revkin 2012). First, the entity dominated the American market. Thus, Wal-Mart had presence in almost all states by 1990. This meant that the entity was leading in retail marketing in America. The swift expansion occurred through acquisitions of other retail entities and firms that would harmonize its operations. Additionally, the entity also acquired membership clubs. This enabled the entity to capture the high-income clientele. The entity strategy has succeeded in facilitating the evolution of a small store to a global retail force (Basker 2006, pp.179).
In the late 1950s, Sam Walton incorporated Wal-Mart. However, it operates under diverse names globally. In the United Kingdom, Wal-Mart operates as Asda. On other global fronts, the entity has assumed diverse models. In most countries, Wal-Mart has fully owned subsidiaries (Patton 2002, pp. 87). These have enabled the entity to have full access to lucrative markets. Furthermore, the entity has also joined ventures with other firms in attempts to access certain economies. The combination of these business models has created an enormous empire controlled from its Head quarters in Arkansas. This complex model presents many management challenges. Wal-Mart is stable financially due to its phenomenal turnover. Furthermore, the entity has made vast operating returns revealing that its central undertaking is viable. Overall, Wal-Mart has minimal operational risk owing to its countless deports globally (Revkin 2012).
Organizational structure
Wal-Mart has about five thousand malls globally. Management of such deports is tricky unless there are apt administrative structures. Evidently, conglomerate firms face multiple challenges in their endeavour to tap fresh lucrative economies. The challenges include overwhelming taxation rates. Therefore, most entities establish fully owned subsidiaries in the target markets. This allows the entity to elude enormous taxation. Wal-Mart has exploited this strategy as such; the entity has entirely owned subsidiaries in most nations. Additionally, the entity has joint ventures in some nations like Germany. Wal-Mart has also assumed control of certain clubs. These membership clubs enabled Wal-Mart to access certain segments of the clientele base. Therefore, Wal-Mart overall structure is complex. Wal-Mart incorporated in America acts as a holding entity for multiple subsidiaries incorporate in other nations. Moreover, it also entails joint ventures whose extent is not easy to establish. An appointee of the BOD governs subsidiaries in the foreign nations. These heads of foreign subsidiaries answer to the top hierarchy administration in Wal-Mart’s head office (Werther & Chandler 2006, pp. 47).
Wal-Mart has a dynamic structure. However, its structure tends towards centralized management since the entity top administration is in Arkansas. However, the entity has minimal levels of management. As such, managers who oversee operations have access to the top administration. This makes decision-making easier in such an enormous entity that deals with numerous resource constrains. The minimal levels of management have eliminated bureaucracy, which culminates in inefficiencies. This is a shrewd means of boosting efficiency in Wal-Mart, which has the possibility of facing enormous bureaucratic challenges if there are inappropriate management structures (Hitt 2008). The entity has Chief executive officer CEO and Chief financial officer (CFO). These are common position in entities administered centrally.
These two managers receive direct orders from the Board of Director (BOD). The BOD has the core task of determining the entities policies. Any public entity must appoint directors who represent the investor in the operation of the entity. The BOD appoints other managers to run Wal-Mart. The few administrative levels in this entity culminate in a flat structure. This structure adds value since it has numerous strengths. First, decision-making is rapid hence there is no wastage of resources. Additionally, it eliminates bureaucracy that is massive hitch in enormous organizations. This organization structure also reduces the tax charged on the entity hence increasing shareholders’ returns. The flat management structure allows that senior staff to work alongside the ordinary employees. This is a motivating issue to workforce. It reveals managers not only issuers of orders but are also partakers in the implementation process. The structure of the organization has enabled the entity to capture diverse segments of the clientele (Brunn 2006, pp. 45).
Management approach
Wal-Mart’s management core objective is to sustain the exemplary performance. Wal-Mart’s CEO Mike Duke has the basic duty of maintaining the current performance. Wal-Mart has reduced the hierarchies of administration thus ensuring that the administrators are in touch with what is transpiring in the store. This is a hands-on kind of administration. This has ensured that the managers are active partakers in the daily undertakings of the firm. Wal-Mart’s management philosophy has eliminated a gap, which exists between the common workers and their managers. Essentially, Wal-Mart regards its employees as associates. This management is unique to this organization. Conversely, managers of other organizations issue orders and do not partake in the process of implementation. The ordinary employees have the task of implementing the managerial directives. The managers of such organizations only assess the results of their directives. This is a traditional management approach. The management approach adopted by Wal-mart represents a deviation from the ordinary. Wal-Mart has utilized this management approach to motivate its staff (Weiss 2008, pp. 18).
Wal-Mart is an entity that experiences transformations continuously owing to its business surrounding. The entity constantly implements programmes that will ensure that the entity can sustain its performance. Major changes in this entity include technological innovations that will boost its efficiency. Such changes may cause anxiety among employees. Therefore, it is imperative to institute measures that will suppress counterproductive impacts of change. First, it is crucial to communicate appositely about the impending changes. This will ensure that the employees are aware of the impending changes. Additionally, Wal-Mart should seek the assistance of professionals in the implementation of changes.
Professionals in change management educate employees on how to handle the transformation. Management of change is a critical constituent in the modern administration of firms. Wal-Mart needs to implement specific changes. The changes are necessary since the firm operates in an exceedingly competitive sector. Additionally, change helps the leadership institute measures that ensure that Wal-Mart has a competitive advantage. Nonetheless, the dismal relations between the work force and Wal-Mart may provide necessary insight into how the entity handles affair relating to its employees (McCampbell, Clare & Gitters 1999, pp. 171).
Wal-Mart’s marketing strategy
Wal-Mart is an expansive entity retailing in countless products. This entity operates on a global scale. Consequently, it is vital for the entity to enact a marketing strategy that will ensure that entity maintains and expands its market niche. The entity targets ordinary citizens in the nations it operates. Wal-Mart has acknowledged that marketing will provide a means to expand its proceeds. Consequently, it has established a department whose sole duty is to guarantee that potential clientele are aware of what the entity offers. The department will ensure that Wal-Mart as a brand grows. However, this department requires financing. Consequently, the entity has availed funds for the department. Wal-Mart has instituted aggressive marketing. The marketing has encompassed advertisement on the majority of communication that includes radio, television and internet. Furthermore, Wal-Mart has provided pamphlets, catalogues and price lists of the merchandise it offers.
This has permitted the entity to reach countless potential clientele. Additionally, this has guaranteed that the entity will maintain its current market proportion. Wal-Mart has also utilized screens in its stores to advertise it merchandise (Jonathan 2008, pp. 293). Wal-Mart has an expansive net work of outlets. This enables the entity reach clients in about twenty countries. This presents a diverse customer base. Wal-Mart has an enormous number of suppliers. This enables the entity to avail an assortment of products to clients. Moreover, it has enabled the differentiation of Wal-Mart’s product portfolio. Wal-Mart avails seven elements that constitute an apt marketing mix. As such, the entity turnover has grown persistently despite a receding economy (Mohammed & Pervaiz 1995, pp.10).
Despite Wal-Mart spending enormous finances in advertisement, it is vital to elaborate other strategies. Wal-Mart provides the cheapest prices in the industry. Consequently, it boosts the purchasing capability of consumers. Wal-Mart lowers it prices by offering enormous discounts. These discounts have won the entity enormous clientele since rational individuals will shop at entities with the least prices. Large discounts or low pricing is a strategy that this entity has utilized since its inception. This strategy has won Wal-Mart clientele. Wal-Mart has sustained this strategy owing to its enormous revenues, economies of scale and reduced costs (Wal-Mart stores 2012). Other firms have implemented Wal-Mart’s strategy. Nonetheless, they have realised it is unsustainable hence; enabling Wal-Mart’s domination in this sector.
Human resources management
Wal-Mart has encountered countless personnel problems. The problems have entailed complains of poor remuneration and gender imbalance in the work force. Therefore, it is critical to evaluate the personnel management in Wal-Mart. The entity has about two million employees. The entity recruits workers online. After evaluation of the recruit’s credential, the applicant then undergoes an interview. The recruitment also necessitates a drug test. Drug tests are critical since they ensure safety in the working set-up. Additionally, they help the entity assess the liability that Wal-Mart may encounter due to employees’ sickness. The recruitment culminates in an orientation of the organization. During this phase, the employee receives enlightenment on the structures of the Wal-Mart. Moreover, the recruit receives vital guidance on the daily operations of the entity. The orientation may last about six months. The entity offers both part-time and full time service. This form of employment is flexible and may suite countless employees (Carlson 2004).
The entity also offers opportunities for career advancement. This means that the management recruits senior officials from within the entity. Moreover, the entity also promotes its employee to higher administrative positions in the entity. This is a means of motivating its employees. Wal-Mart also seeks to develop the expertise and career of its employee by seeking their contribution towards innovations that will give the entity competitive advantage. Food production is a key area that has required innovation. The entity owns several food entities that complement its operation by availing food commodities that have a high turnover. Employment legislation change rapidly as governments and unions seek to protect employees.
Consequently, Wal-Mart adjusts its recruitment policies constantly in adherence to these policies. This ensures that Wal-Mart recruits its employees in accordance to the legal statutes. Poor management of personnel has considerable implications on the corporate image of a firm. Consequently, Wal-Mart should guarantee employees’ satisfaction through ample remuneration and other relevant benefits. Wal-Mart has faced chief complains for failure to unionize. This has resulted in protest from employee unions. Finally, Wal-Mart rewards exceptional employees in recognition of their efforts. This program shows Wal-Mart’s appreciation for efforts that workers put into the daily operation of the entity (Carlson 2004).
Supply chain management
Wal-Mart supply chain has earned the entity recognition for its efficiency. The entity requires phenomenal volumes of supply since it operates in the retail sector, which requires an expansive assortment of goods. Therefore, it is vital to guarantee timely arrival of commodities. Furthermore, the entity should enact favourable agreements with its suppliers. This will ensure that they entity does not encounter liquidity problems as the suppliers seek payment (Millsap 2012). The entity has employed sophisticated models that monitor stock levels. Monitoring of stock level is a critical undertaking in such an entity that requires supplies of enormous magnitude. The sophisticated inventory management model ensures that Wal-Mart’s countless storehouses have the optimum level of supplies. Optimal stock levels ensure that supplies do not withhold Wal-Mart’s capital. Overall, supply management adds value to the entity (Rhonda & Robert 1999, pp. 14).
Wal-Mart has multiple stores and warehouses ensuring that the merchandise is close to the clientele. The entity has a detailed supply policy that requires timely delivery of merchandise. As such, Wal-Mart imposes fines on suppliers that deliver earlier or later. This has ensured that the entity’s stores never runs out of reserves. Additionally, the detailed supply policy guarantees reduction of storage expenses. Early or late delivery escalates storage cost hence Wal-Mart’s policy dictates institution of a fine. This has ensured discipline in its supply department (Ferrari 2009). This discipline in supply management has resulted in the success of the entity as it lowers the cost on inventory and ensures timely delivery. The accomplishment of such efficiency has resulted from implementation of certain actions. First, the entity instituted Radio frequency identification (RFID). RFID is a logistic innovation, which detects the inventory levels of diverse commodities. This logistic innovation has benefited Wal-Mart as it guarantees minimized inventory cost. The logistics program ensures timely ordering of commodities and delivery. Moreover, it has eliminated incidences of inventory outage. The logistics program has contributed to the overall efficiency of Wal-Mart (Millsap 2012).
Conclusion
Wal-Mart had a simple beginning. Nevertheless, the founder was visionary. The founder inspired the entity into dominating the global retail sector. The entity has abided by its founding philosophy of providing merchandise at low prices. This has won the entity an enormous clientele base. Furthermore, its efficiency has ensured minimized operation cost for an entity of its magnitude. The management has worked to guarantee elimination of inefficiencies. This has enabled the entity to avail its merchandise at lower prices. Wal-Mart’s globalization is predominantly via the creation of fully owned subsidiary in the target nations. This has guaranteed lower taxation. Although its globalization approach was successful, Wal-Mart’s penetration into the German market failed. Wal-Mart’s globalization has culminated in a dynamic organization structure with minimal management levels. This has resulted in the elimination of bureaucracy. Wal-Mart has instituted an intelligent marketing strategy that has ensured it retains its market niche. Despite the controversy that surrounds Wal-Mart personnel policy, it is imperative to note the entity realizes that the work force is a vital ingredient. Accordingly, the entity provides adequate remuneration and other benefits that include career advancement openings. Finally, the entity has the most efficient supply chain. Exceptional supply chain administration has culminated in efficiency and the decline of Wal-Mart’s expenses. Wal-Mart has the potential to sustain its dominance in this sector since the management are making enormous efforts hence ensuring efficiency, a larger clientele base and an excellent corporate image. The continuous entry of the entity in rising economies has provided the entity with an expansion strategy. If the management maintains its present strategy, Wal-Mart has a promising future.
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