Summary
Wal-Mart is a company that operates in the US for several years already, but not so long ago, it implemented a new business strategy to improve its performance. The organization referred to sustainable value networks that allowed it to reduce expenditures, improve relations with the suppliers and become more transparent. However, it turned out to be challenging to ensure the connection between the core business and sustainability.
The company expanded over the course of time, and the new CEO decided to improve the situation. He considered that sustainability can be easily maintained through product design and encouraged the company to create brand products that are not extremely expensive but are of high quality. With the help of such a trusted product, Wal-Mart attracted many US customers. The company focused on entrepreneurial activities and in-store promotion. It emphasized the necessity to reduce energy usage and paid attention to the chemical components of the products. After achieving success in the US, the company decided to globalize and enter new markets, but numerous challenges should be considered yet.
Questions
Wal-Mart attracts customer’s attention with the help of its competitive advantages that make the company look better than its competitors. The company emphasized its sustainability, which is highly valued by those clients who prefer to purchase products in one place for a long time, being sure that they will never be cheated. In the current world, being environmental-friendly and utilizing resources efficiently is very important. Customers often underline that they want to support nature and are not willing to hurt it. That is why when Wal-Mart decided to enhance its environmental performance, American clients were motivated to refer to it even though initially such a step was done to reduce spending and bring sustain profit.
The company evaluated its current operations and referred to the “system perspective.” Unlike other companies, when the crisis began, Wal-Mart started to use various promotion programs that do not require enormous expenditures but give an opportunity to attract clients. This promotion was maintained inside the store and included spotlights and videos that drew people’s attention.
The most vital thing was considered to be the product. Wal-Mart cooperated with various suppliers to create “a lower cost, better quality, more trusted product” (“Wal-Mart’s sustainability strategy” 2). The company accurately checked chemical components to be sure that the chemicals are appropriate and materials are efficient.
Wal-Mart also wanted to show its clients that all its actions are made for them and that they do care about the customers. The company utilized a client-centered approach and shared its knowledge, especially information related to the products, their components, and quality. They were divided into categories, which simplified the process of purchasing and included the description. Thus, customers received an opportunity to choose the product they need from the top lists also.
Wal-Mart used a great strategy that provided it with the opportunity to improve competitiveness and survive during the crisis. It also attracted more clients, becoming closer to them and allowing them to get to know more about the company and the products people purchase. It cannot be argued that such an approach was rather beneficial in the US; however, the situation is not likely to be repeated in China because the same strategy may be useless without particular adaptations.
Wal-Mart should take into consideration the fact that the strategy was designed to meet the needs and expectations of the US population that differs significantly from the Chinese one. They have various culture, environment, and politics. Except for that, the differences will be connected with the local supplier, distribution, and supply chain. The company will not have an opportunity to cooperate only with people and organizations it is already familiar with, which can affect the quality of the product. Wal-Mart may face problems with technology. The procedures maintained in the US may be impossible to perform in China.
Finally, a company’s expenditures may increase due to particular policies and costs of resources. China’s general retail regulation is not the same as that can be found in the US. That is why every step made by the company and every action should be reconsidered before being used in China.
If Wal-Mart is willing to improve its performance and enter new markets in the future, it should start considering the ways in which these can be maintained. Knowing that current operations are practical and efficient, the company should conduct marketing expansion research. This step will give an opportunity to define the best ways of future expansion, including the information about the most profitable markets and required alterations. With its help, Wal-Mart will create a stable background for further movements. Such kind of research will play a crucial role in the global success of the organization. Wal-Mart will be able to adjust its strategies to new environments and market conditions and will minimalize potential risks.
The company should thoroughly investigate the political climate of the countries it is going to enter. In this way, it will be sure that its operations are not illegal and will not face any restrictions from the government. It should consider different forms of the market and assess both its competitors and business partners. Such information will help to use those strategies that ensure sustainability within the new environment.
Wal-Mart should pay attention to transport, as it is rather costly. It might be beneficial to refer to in-store housing and cooperate with local suppliers who provide transportation. The company has some problems with suppliers that is why it may consider their squeezing.
The barriers to entry may cause many problems; that is why Wal-Mart should discuss them and predict possible ways out. Finally, it would be advantageous for the organization to cooperate with a company that is highly valued in the targeted country and emphasizes its own reputation in the US as a part of a promotion.
Works Cited
Wal-Mart’s sustainability strategy, 2010. Web.