"The Inexorable Rise of Walmart?" Assignment Help
Following the questions:
1. What was Sam Walton’s strategy for competing in the discount retail industry when he founded Walmart? Explain how and why this strategy enabled Walmart to be so successful in a highly competitive industry.
2. How has Walmart performed internationally? What key challenges did the company face internationally?
3. Identify the key strategic problems that Walmart faced in 2016. What are your recommendations for dealing with these challenges?
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Walmart has been working on the discounts which offers the different items everyday with lower pricing. The discount store was opened by Sam Walton with the aim to expand it for the dime store and apparently bring opportunities for the customers. Walmart has been seen to go public with enormous success where Walton has been handling his competitors. The lower pricing on the daily needs has made it ensured about the sale force which is seen to provide a better and top-tier customer service(Wells et al., 2016). It helps in attracting customers and with time progress, the success of Walmart and its expansion into Sam's club has also been for the Walmart supercenter. The strategy of Walmart Every Day Low Prices has been in a state with the brand focusing on the cot leadership with business level strategies that tend to work on the customer low price. Walmart has been working on winning focus over the cost leadership with working on the brand which is a primary factor in keeping it at the top. It is considered to be stagnant mainly because it was not involved in playing any offensive roles for retaining the cost leadership against Amazon.com which is a major competitor. The company is pulling head with offering all everyday low pricing. Hence, for maintaining the status, the company has picked up with the pursuits of the low pricing with the ecommerce presence that is projected with growth of 40% in the upcoming year. Walmart has been involved in planning about opening few stores and continuing the rolling out of more online grocery locations for the pickup(Wells et al., 2016).
Walmart has been focusing on the differentiating strategy as it has been a mega retailer for providing the different product variety which comprises of the beauty products to the grocery and then making it one-stop shop for the different consumers. With this, Walmart has only been the retailer for the successful growth of the low pricing and then there are larger selections for the different products. Target which is a competitor is able to provide the products range effectively with prices that are not low like of Walmart brand. Hence, the company continues for battling around with the competitors for keeping its prices lower than to remain in the industrial forefront. The company has been focusing on the retailers with sever other retailers like Tesco, Target who follows the varying store formats(Wells et al., 2016). Walmart was also able to keep itself ahead in the competitor with the competitive advantage set for the supply chain management, where there is a huge bargaining power on the suppliers and the strategies in purchasing. The strategic goal of the company is to bring in opportunities and the values for the customers by keeping them unwavering commitment for the lower pricing. It also helps in maintaining the promises in working over the low road business practice. Walmart is one of the biggest retailers who has been able to focus on the expansion outside USA. It is working on handling the companies like Target and K-Market with similar strategies as that of Walmart.
Walmart has been working on directed opportunism which helps in maintaining flexibility with focusing on the approaches of broader direction set under systematic framework. The best example is about how the company is gone international in Mexico with operating in the other stores like Canada, China, Germany, Argentina etc. The company has been able to work on combining the inventories with the discount stores where it is pursuing globalization with moving across border in 1991.
Walmart has been facing major challenges abroad with the attempt to maintain the dominance of industry which makes the pricing low(Wells et al., 2016). Hence, Walmart needs to maintain the dominance with ensuring about the goods which are for the lower pricing at home and internationally. It is important to make sure that the foreign goods are of the similar quality to the domestic ones. There is also a need to make sure that the labor is cheap with the strategy to maintain the dominance. The feasibility of Walmart is to fall from top position and continue to promote the good quality products with lower pricing. It will then help the consumers to shop even when the recession has been passed. The international strategy is about the pricing and the value pricing which is based on consumer perception. Walmart needs to look on the strategies and competitors that will be for competitiveness and lower pricing. They involve the setting about achieving a middle- and high-class shoppers where the work is about how one can switch in between the stores effectively. Walmart ASDA acquisition in UK is useful for meeting the resistance in Germany. The company is also able to work on the forces where stores had geographical distance and U.S. managers were installed for running new operations with different cultural gaffes. The strategy includes about capacity to leverage two key resources which could lead to the exploitation of buying power with domestic suppliers like Proctor and gamble. The procurement is for the goods with cost effectiveness and to utilize the domestic knowledge bases in the areas for the efficient management of stores(Wells et al., 2016). The merchandising skills and IT deployment to benefits are for focusing on positive byproducts where the choice of the market entry is to allow the company to focus on learning about gained initiated market entries with its subsequent planning. Walmart also has to plan in overcoming the difficulties with business models that are new to the market, with strong local customer relationships. The company has been able to focus on the lower purchasing power with consumer offering huge potential to the lower price retailers like Walmart. China's cultural and the linguistic distance comes from US which is presented relatively for the higher entry barriers.
As per the case study, Walmart in Feb 2016, faced a major challenge about the drop in the revenue by 0.7% to $400 billion. With this, there were online retailers who were growing rapidly with boasting a higher market capitalization. Alibaba also announces that Walmart has been passing a global sale for the biggest retail platform in the world. The company needs to ensure about handling the convenience outlets with wage rising that is putting pressure on the profits. The international markets were seen to underperform, and the analysts also suggested about retreated it to U.S. home(Wells et al., 2016). There was a resistance of the competitors, where Kmart and J.C. Panney were outstripping by being the first in the retail stores in US. The advantage was of the positioning of brand and its closer links of trading with its suppliers. The other challenge was about the manufacturers and the product marketers where the company products like P&G, Unilever had to be handled with the ones who supplied the good. The company also had to face the issues of the cultural differences and it was likely to be failing in countries like Germany, Japan and Korea. Hence, there were not easy or fast transactions but if they continue with their lower pricing model, then it would be profitable for them to hold in the due time. Hence, for keeping the sales up and to have the continued growth, Walmart has been able to tur the focus for international business expansion. The attention is to gain the leading business with stronger economic growth and utilizing the emerging opportunities effectively.
Hence, Walmart can work on the turnaround strategy which is a retrenchment strategy which is followed by organization. The decisions need to be made about what needs to be done before the profitability damage is there in the company. Walmart could also raise the minimum wage of the employee with concerns on incentives. With this, the expectations could be for the renewable of growth that can help in stocking and lifting about 30% in the time of 2 years. Hence, it will make Walmart benefitted with the increased reputation and the market shares as well. The strategic alliance is to focus on the different competitors in the world. The planning has to be about receiving the documents where Walmart will allow to pass on the savings for its customers. The commitment is to have the lower prices for Walmart to advertise on "Our Ad Match Guarantee" where the customers will look for the identical products, when they sell advertisements by any on the competitors (Wells et al., 2016). The pricing strategy needs to be incorporated with retaining more customers. The size and buying power includes the ability to purchase the huge amounts of products with bringing discounts from suppliers which keeps the pricing low. Walmart must also focus on the opportunities in the global retail market with handling the expansions of business to explore any economic opportunities in the market. The strength will include the global supply chain management, and higher efficiency to support the aggressive global expansion in global market. The company needs to implement the changes based on business for the long-term development with globalized online retail market.
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