Walmart Business Operations And Overcoming Competitors In The Market

Introduction to Walmart

Questions:

1.Critically review the external and Market Environments of the Organisation.

2.Critically evaluate the key resources’d Human and Financial and Core Competences of the Organisation Including how it adds value.

3.Based on your findings Identify what Challenges you believe the Company will face in the future and how to address them.

The report talks about the business activities and operations of the Walmart. It explains that how the company is overcoming on the competitors in the market. It explains the external environment of the firm and it also describes that how macro environment influences the success and growth of the firm negatively. Apart from this, the paper explains the financial and human resources of the Walmart. It outlines that how the core competencies and core values are important for the firm to attain the long-term mission and vision of the organization. In addition, it describes the organizational structure of the company to gain sustainability in the organization. It tells that how the Walmart has become a global leader in the retail industry around the world.

Walmart is an American multinational retailing company which operates and manages as a chain of discount department stores, hypermarkets, and grocery stores with headquartered is located in Bentonville, Arkansas. The company was founded in 1962 by Sam Walton and it was incorporated on 31^st October 1969. The firm operates and manages under the name Walmart in the Canada and United States.  The company is one of the biggest companies in the world by revenue and profit. The firm invests money in outside North America to get the better results and outcomes (Michelson, 2013). In today’s era, Wal-Mart is becoming a player with maintaining sustainability within the organization. It provides great employment opportunities to the employees.

The growth and success of the organization are influenced by the external environment and market of the country. External environment consists various factors which cannot be controlled and managed by the company. These factors include the following:

Political factors: The sales and revenue of the Walmart can be affected by the various political factors. The government can change and modify rules and regulations at any time which can affect the company growth and success of the firm (Sánchez, 2013).

Economic factors: Economic factors are also the part of the external environment which affects the business of the company negatively. Market inflation also affects the business activities and operations of the firm. It also affects the performance and efficiency of the company. Further, the purchasing power of customers depends on the economic condition of the country. After the various researchers, it has been evaluated that economic factors both internationally, as well as domestically, might affect the financial performance and effectiveness of the Walmart. In addition, higher interest rate, energy cost, inflation, unemployment rate, and changes in the tax law and regulations can affect the success and growth of the firm. Along with this, foreign exchange rate, higher transportation cost, and other economic elements could also affect the business operations of the firm (Marcilla, 2014).

External Environment and Its Impact on Walmart

Technological factors: Generally, e-commerce and internet affect the overall performance of the company. As a result, the company is able to introduce and launch its online stores which can help to the company for maintaining a good relationship with customers in the global market. Through e-commerce and internet, the company is able to maintain a proper and regular connection with buyers and sellers.

Social factors: There are various social factors existed in the external environment which can influence the business activities of the Walmart. Therefore, the firm participates in social activities to build and develop a good relationship between the society and clients as well (Lombardo, 2017).

Environmental factors: The Company sells the products and services with maintaining good quality. The firm ensures that products and services are not harmful to the customers in the market. The organization has also introduced an effective and unique waste management system that main aim to reduce the pollutions and provide a neat and clean environment to the public for the future. The waste system is built and developed to reduce and prevent the various mistakes and obstacles within the organization.

Legal factors: The legal rules and regulations also affect the growth and progress of the firm. The company is trying to do work for client’s welfare and it also wants to make a good image in the global market (Fernie, Fernie, and Moore, 2015).

Market competition: Market competition is a big concern and it affects the objectives and goals of the firm. The firm needs to evaluate and analyze the plans, policies, strategies of the competitors in order to determine the long-term success and growth of the firm. In this way, Walmart can overcome on the competitors in the global market. In addition, low prices of the products and services also affect the customers in the universal market. Further, substitute products are also big challenge for the company. If the buyers become honest and loyal in the market then the threat of substitutes can be reduced by the firm. Along with this, the company can use effective business strategies and policies to gain success around the world (Blackwell and Eppler, 2014).

Customers: The growth and success of the Walmart depend on the customers which are existed in the international market. Customers increase the competition in the market. There are various types of the buyer which affect the prices of the products in global market. There are some factors which affect the buying behavior of the customers such as the size of customers, number of buyers, consumer mentality, quality and quantity of the products and services and discount factors etc.

SWOT Analysis of Walmart

Supplier power:  Suppliers power affects the business operations and activities of the Walmart. There are several suppliers are manufacturing a variety of products in the retail industry. Thus, the company looks the prices of the products and takes the purchasing decisions. The suppliers have very little power to negotiate the prices. The supplier’s power depends on the various factors such as switching costs, the uniqueness of products and suppliers concentration.

All these factors affect the business operations and actions of the Walmart. The company needs to focus on the external environment of the company to maximize its growth and to gain long-term benefits and revenue within the organization. Further, the firm must focus in the marketing environment of the company. It should focus on the activities and plans of the market to promote the products and services of the organization. Walmart is one of the biggest assets to the people in the world. It provides various types of products such as car repairs, electronics products, and groceries products. Walmart is the second biggest corporation in the world. In addition, the company needs to monitor the business activities and operations of the competitors. The competitors include Target Corporation, Carrefour, and Costco Wholesale Corporation. These are the major competitors of the Walmart and they play a vital role in the international market. Entire companies affect the progress and success of the firm. In addition, the organization must focus on the business level strategies and corporate strategies to gain the competitors advantages in the market. It makes effective plans, strategies, and policies in order to determine the course of actions within the organization. In this way, the company can easily achieve its mission and vision of the firm (Bjelland and Wood, 2015).

SWOT analysis is done by the company to evaluate and identify the strengths, weaknesses, opportunities, and threats of the company which has been discussed below (Ali,2012).

Strengths	Weaknesses
·         It is one of the largest companies across the world. ·         It uses information technology for providing support to its international logistics system. ·         The company is expanding and flourishing its business day by day. Further, it is creating a joint venture in India.	·         The company is not maintaining flexibility and transparency. Thus, the company is not able to focus on the competitors in the global market. ·         Walmart is facing competition in North America with stores such as Target and Kmart. ·         The company is not able to focus on the several areas due to the huge span of control.   ·         Negative publicity and high employee turnover.
Opportunities	Threats
·         The company is taking more advantages by focusing on the special markets. ·         There are enormous opportunities for the company to expand its future in near future.	·         There are various political problems and barriers exist in the market. ·         Intense price competition is the major threat for the Walmart. ·         Many small businesses dislike Walmart. It is the other threat for the company.

Wal-Mart is one of the biggest players around the world. If the firm wants to start a new business then it is the responsibility of the company to procure and save the financial resources in order to ensure the success and growth of the Wal-Mart. Further, financial management refers to the effective and efficient management of funds in an effective manner to attain the goals and objectives of the firm (Glanz, Bader and Iyer, 2012). It is the specialization function which is directly associated with the top management of the firm. Financial resources play a crucial role in Walmart and its success and growth which depend on the financial resources of the firm. None of the organization can start the business without sufficient financial resources. The financial position of the Walmart is very excellent and effective. Net cash provided by operating activities was $28.6 billion, $27.4 billion and $, 23.3 billion for the fiscal year 2016. The current revenue of the company is increasing day by day. Further, the company is focusing on assets of the company for return on investment and it is managing working capital to provide strong free cash flow. They are providing returns to their shareholders through dividends and share repurchases. They are focusing on the return on investment and cash flow. The two aim of the working capital is to increase and enhance the profitability of the organization and to ensure the long-term goals and objectives of the firm. The net sales of the Walmart from 2006 to 2017 are showing in below diagram (Stankevi?i?t?, Grunda, and Bartkus, 2012).

Financial Resources and Management at Walmart

 (Statista, 2017)

In this way, the company is increasing its sales and revenue day by day. The company is making a good image in the market through its effective financial position. Further, the company is able to maintain the effective difference between receivables and payables because it affects the brand image and suppliers of the firm. Through effective financial position, the company is reducing the risk of inventory and various other obstacles within the organization. In addition, the company is making effective strategies and plans to increase the financial revenue and growth of the firm. Along with this, the firm is using effective supply chain capabilities to reduce the cost and to build an effective relationship with customers in the global market (Rothenberg, Hull and Tang, 2017).

Human resource management is the backbone of the Walmart. The company cannot hire a potential and competent candidate without sustainable HRM. It is one of the largest companies in the world in terms of organizational size, financial performance, and business value. Further, the company focuses on the human resources in order to satisfy the business requirements, needs, and expectations. In addition, the firm monitors and evaluates internal organizational processes to run the business activities smoothly. Along with this, it focuses on the human resource planning, job description, job specification, and job design to evaluate and measure the performance of the workers in order to meet the long-term objectives and goals. The company focuses on the recruitment, selection, training, development and performance management, compensation and career development to analyze and measure the performance and efficiency of the employees. Walmart is one of the biggest organizations in the world. Each store has its own human resource manager who manages the employees within the organization. HR manager makes plans, policies, strategies, and procedures to carry the business activities and operations effectively and efficiently. The company predicts possible future changes in the workforce to attain the mission and vision of the firm. The company uses the information system to identify and determine the aspects and areas of the firm which can increase the demand of the human resources. HRM implements and uses corresponding labor force plans and policies to stabilize the human resources within the organization. The company hires potential and competent applicants to increase the sales of the products and services. In addition, the company uses job analysis and job design methods in order to increase and maximize the revenue and profit of the company (Ken, 2014).

Further, the company uses different recruitment and selection strategies to hire the suitable and appropriate candidate in the organization. The recruitment strategies include direct recruitment, online recruitment, and academic institutions recruitment. These HR methods ensure the diversity of the candidates to do work effectively at the workplace. Further, the company uses effective retention strategies to reduce the high employee turnover within the organization. Along with this, the company provides effective incentives and bonus to the competent employees to encourage and motivate employees for doing work effectively. In addition, the company provides training and development coaching to the employees to improve their skills and performance at the workplace. Further, performance management system is used by the Walmart. Along with this, it uses career development plans to measure and evaluate the efficiency of the employees. It uses effective compensation strategies to maximize the productivity and performance of the workers (Carden, Courtemanche and Meiners, 2009).

HRM also maintains the reciprocal relationship between employee and employer to increase the productivity of the company. They maintain a good working environment for the employees at the workplace. In this way, human resource management is an integral part of the Walmart. HRM provides job satisfaction and job security to the worker to enhance their efficiency within the organization (Paauwe, 2009).

Walmart is one of the biggest players around the world. There are various core competencies of the company that have been discussed below.

Culture: It is one of the biggest core competencies of the company. The workers are efficient, hardworking, and potential to do work effectively. Further, the company provides favorable working environment and culture to the workers to accomplish the long-term goals and targets (Tombs, and Whyte, 2015).

Effective relations with suppliers: Walmart maintains effective relations with suppliers to attain their goals and objectives at lower prices. Further, the company uses information technology system to ensure the speedy and fast delivery of the products and services. The company also works with suppliers to increase and improve the production of the firm (Philippon, 2012).

International growth: It is another core competency of the company. The company determines long-term growth and success of the company. The firm is expanding its business activities and operations globally. This competency also helps to overcome on the competitors in the global market (Prieto, Phipps. and Addae, 2014).

Better use of technology: The Company uses innovative technologies to provide good quality of product and services to the customers around the world. Further, the company maintains an effective and cordial relationship with its suppliers and partners across the world. By using of innovative and effective technology, the company can gain competitive advantages in the market (van Tulder, 2015). Along with this, just in time inventory process is implemented by the company to reduce and eliminate the cost of inventory at the stores and warehouses. Along with this integrity and patience is another core competencies of the firm. The company maintains effective communication in the market to deal with suppliers as well as customers around the world. These are the core competencies of the Walmart. These core competencies help to beat the competitors in the market. It also helps to identify and measures the future plans and policies of the organization to gain long-term success and growth (Isberg and Pitta, 2013).

The organizational structure of the Wal-Mart is very effective and efficient. The organizational structure of the Wal-Mart determines and evaluates business activities and operations of the firm. This structure resolves various problems and key challenges which are existed in the organization. The firm is growing and succeeding day by day through its effective and unique organizational structure. It also helps to provide competitive advantages in the market (Grosse-Ruyken, Wagner and Jönke,  2011).

The firm uses hierarchical functional organizational structure to increase the revenue of the firm. There are two features of Wal-Mart organizational structure such as function-based definition and hierarchy. Through hierarchy features, the employees assign command and authority in vertical lines to enhance their confidence and productivity (Galpin, Whitttington, and Bell, 2015). Along with this, the function based definition feature includes the groups of the employees which are fulfilling the functions and objectives of the firm. For example, the company maintains department such as human resource management to perform the functions and duties effectively and efficiently. In addition, Walmart also maintains department for the function of the marketing, administration, finance and information technology. These are enormous function based departments in the organizational structure of the Walmart (Morschett, Schramm-Klein, and Zentes, 2015).

The functional organizational structure of the Wal-Mart affects the entire organization of the firm. The company maintains transparency and flexibility at the workplace through its effective and unique organizational structure (Elder, 2016). The lower level of organizational structure cannot easily adjust business policies and practices within the organization. Further, various models are used by the firm to maintain effective organizational structure for providing benefits to the employees as well as customers. Further, culture also plays a vital role to maintain excellent organizational structure in the company (Lombardo, 2017). The organizational culture depends on the various factors which increase the efficiency and effectiveness of the Walmart. There are four components of Walmart organizational culture such as service to customers, action with integrity, respect for the individual and strive for excellence (Hill, Jones. and Schilling, 2014). In terms service to customers, the firm provides effective and good quality of products and services to the customers in the global market. Further, the company provides respect and morale to the each and every employee. In addition, the company promotes and encourages honesty, integrity, fairness to make effective decisions in the organization. Walmart also promotes teamwork and collaboration to increase the efficiency and to reduce the cost of the products. It is one of the biggest retailers who promote organizational structure and culture to overcome on its competitors in the universal market. The main aims of the Walmart to increase revenue with maintaining suitable prices of the products around the world (Flamholtz and Randle, 2012).

Further, the company uses differentiation and pricing strategies to gain long-term profit around the world. Through differentiation strategy, the company is able to differentiate its products from the competitor’s products in the world. Along with this, it uses pricing strategies to fix the reasonable prices of the various products and various around the world. The Wal-Mart organizational culture is based on the open door policy to evaluate and identify the needs, requirements, and expectations of the customers around the world (Okoro, 2012).

The effective and unique organizational structure provides various benefits to the customers as well as the organization. The company can evaluate and analyze the rules, policies, plans, and programs of the competitors around the world. It is one of the biggest benefits for the company. There are various competitors of the Walmart such as Target, Coulomb technologies, Amazon, Best buy and Apple Inc. The company can also measure and evaluate the strategies and plans of the market to gain sustainability in the market. The firm can reduce and eliminate the risk and key challenges of the market. Now it is assumed that organizational culture and structure play a vital and significant role in Walmart. Further, the company analyzes and evaluates the external environment to eliminate various obstacles and barriers around the world. In this way, the company achieves various competitive advantages in the market around the world (Joyce Stuart, 2011).

The company will face various key challenges and risks to attain its future objectives and goals across the world. The Wal-Mart stores are not neat and clean thus, the company will not be able to increases the sale of the products and services in the world. As a result, the company will have to bear a lot of loss in the global market (Gunter, Hall, and Apple, 2017). The company will have to integrate its digital services with physical stores across the world. Further, the company will face various other issues such as low wages, sex discrimination, and poor working environment. In addition, the company is imposing restrictions on the suppliers thus it is a major issue of the company (Wolfe and Pyrooz, 2014). Along with this, Walmart will try to grow in the universal market, therefore; various challenges will be faced by the firm. Culture issue will also be faced by the firm in near future. There is a change in tastes; preferences and needs of the customers, therefore, it will become a great challenge for the company. As a result, market risk will be faced by the company. Threats of substitutes can be a bigger challenge for the firm in near future. The competitors can also affect the success and growth of the Walmart in near future. Threats of new entrants can also affect the business activities and operations of the firm negatively around the world. In this way, various challenges would be faced by the company in near future (Gordon, 2014).

The company uses various strategies, plans and policies to overcome these challenges and risks. The company can evaluate and measure the future risk and challenges by using effective plans and strategies within the organization (Sparrow, Brewster and Chung, 2016). The company should focus on the needs, requirements, and expectations of the consumers to gain the profit and revenue in the global market. It should monitor and improve the organizational culture to increase the working capacity of the workers. The company must develop and enhance the effective organizational structure to attract more customers in the international market. Various campaigns and programs must be conducted by the company to meet the success and growth of the firm. Along with this, innovative and new technologies must be used by the Walmart to increase the number of customers around the world. Effective planning should be done by the company to eliminate the future risk and challenges in the organization (Geer-Frazier, 2014).

Further, various growth and business level strategies could be used by the firm to enhance and increase the sale of the corporation. In addition, marketing mix strategies must be used by the firm to reduce the future key challenges and risk around the world (Haiven, 2014). Along with this, Pestle analysis and porter five model must be used by the company to evaluate and measure the various external factors of the organization. Walmart should identify the strengths and weaknesses of the firm to beat the competitors in the global market (Asiedu, 2015). Apart from this, various promotional and advertisement strategies should be used by the company to increase and maximize the sales and revenue of the company. The company must focus on the sustainable human resource management to make the effective rules and policies in an organization. Further, Wal-Mart must maintain sustainability and corporate social responsibility to increase the shareholder value and net worth. In this way, the company can reduce and eliminate all these challenges and risk of the market in near future ( Haiven, 2014).                             

Conclusion

The report is based on the Walmart Company and it explains the growth and success of the firm in the global market. Further, it describes the various key challenges and risks which are faced by the company around the world. On the above discussion, it has been concluded that Wal-Mart is one of the largest companies in the retail industry. The company is making effective and unique position in the universal market. Further, the company uses effective human resource management and organizational structure to maximize success and minimize the extra cost of the grocery products and services. Further, Pestle analysis and SWOT analysis are used by the Walmart to analyze and evaluate the competitors around the world. Further, core competencies and core values also play a significant role in order to determine the course of actions of the firm. In this way, the company is becoming a leading organization in the retail industry to attract more customers in the global world. In addition, various policies and strategies are used by the company to explore and flourish its business operations and activities globally. The company must focus on it marketing and business level strategies to gain long term success and growth in the market. In this way, the company can beat the competitors around the world.

References

Asiedu, E., 2015. A critical Assessment of the Strategic Position of Melcom within the Retail Industry in Ghana. Journal of Entrepreneurship & Organization Management, 4, p.137.

Bjelland, O.M. and Wood, R.C., 2015. To nurture transformational technology, build a community like Sam Walton’s. Strategy & Leadership, 43(2), pp.41-46.

Blackwell, R. and Eppler, D., 2014. An Approach to Strategic Situation Analysis: Using Models as Analytical Tools. Journal of Global Business Management, 10(1), p.80.

Carden, A., Courtemanche, C. and Meiners, J., 2009. Walmart and Values: Painting the Town Red?. Business and Politics, 11(2), pp.1-16.

Elder, S.D.W., 2016. Assessing the impacts of retail supply chains on food security and agricultural sustainability in the global South: the case of Walmart in Nicaragua(Doctoral dissertation, University of British Columbia).

Fernie, J., Fernie, S. and Moore, C., 2015. Principles of retailing. Routledge.

Flamholtz, E.G. and Randle, Y., 2012. Corporate culture, business models, competitive advantage, strategic assets and the bottom line: Theoretical and measurement issues. Journal of Human Resource Costing & Accounting, 16(2), pp.76-94.

Galpin, T., Whitttington, J.L. and Bell, G., 2015. Is your sustainability strategy sustainable? Creating a culture of sustainability. Corporate Governance, 15(1), pp.1-17.

Geer-Frazier, B., 2014. Complexity leadership generates innovation, learning, and adaptation of the organization. Emergence: Complexity and Organization, 16(3), p.105.

Glanz, K., Bader, M.D. and Iyer, S., 2012. Retail grocery store marketing strategies and obesity: an integrative review. American journal of preventive medicine, 42(5), pp.503-512.

Gordon, P., 2014. The Two Walmarts. In Corporate social responsibility in the global business world(pp. 207-217). Springer Berlin Heidelberg.

Grosse-Ruyken, P.T., Wagner, S.M. and Jönke, R., 2011. What is the right cash conversion cycle for your supply chain?. International Journal of Services and Operations Management, 10(1), pp.13-29.

Gunter, H.M., Hall, D. and Apple, M.W., 2017. Corporate elites and the reform of public education. Policy Press.

Haiven, M., 2014. Cultures of financialization. London: Palgrave Macmillan.

Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.

Isberg, S. and Pitta, D., 2013. Using financial analysis to assess brand equity. Journal of Product & Brand Management, 22(1), pp.65-78.

Joyce Stuart, H., 2011. An identity-based approach to the sustainable corporate brand. Corporate Communications: An International Journal, 16(2), pp.139-149.

Ken, I., 2014. Profit in the food desert: Walmart stakes its claim. Theory in Action, 7(4), p.13.

Lombardo, J. (2017). Walmart: Organizational Structure & Organizational Culture. Panmore Institute.

Lombardo, J., 2017. Walmart: Organizational Structure & Organizational Culture. Panmore Institute.

Marcilla, L.B., 2014. Business analysis for Wal-Mart, a grocery retail chain, and improvement proposals.

Michelson, H.C., 2013. Small farmers, NGOs, and a Walmart world: welfare effects of supermarkets operating in Nicaragua. American Journal of Agricultural Economics, 95(3), pp.628-649.

Morschett, D., Schramm-Klein, H. and Zentes, J., 2015. Strategic international management. Springer.

Okoro, E., 2012. Cross-cultural etiquette and communication in global business: Toward a strategic framework for managing corporate expansion. International journal of business and management, 7(16), p.130.

Paauwe, J., 2009. HRM and performance: Achievements, methodological issues and prospects. Journal of Management studies, 46(1), pp.129-142.

Philippon, T., 2012. Finance vs. Walmart: Why are Financial services so Expensive?. Rethinking Finance,” A. Blinder, A. Lo and R. Solow (eds).

Prieto, L.C., Phipps, S.T. and Addae, I.Y., 2014. Is Wal-Mart a social enterprise? An exploration of the relationship between corporate reputation, corporate social responsibility & financial performance. Academy of Strategic Management Journal, 13(2), p.51.

Rothenberg, S., Hull, C.E. and Tang, Z., 2017. The impact of human resource management on corporate social performance strengths and concerns. Business & Society, 56(3), pp.391-418.

Sánchez, R.R., 2013. The Complex Political Economy of Natural Capitalism: The Case of Whole Foods, Stonyfield Farms, and Walmart. Online Journal of Communication and Media Technologies, 3(3), p.178.

Sparrow, P., Brewster, C. and Chung, C., 2016. Globalizing human resource management. Routledge.

Stankevi?i?t?, E., Grunda, R. and Bartkus, E.V., 2012. Pursuing a cost leadership strategy and business sustainability objectives: Walmart case study. Economics and Management, 17(3), pp.1200-1206.

Tombs, S. and Whyte, D., 2015. The corporate criminal: Why corporations must be abolished. Routledge.

van Tulder, R., 2015. Getting all motives right: a holistic approach to internationalization motives of companies. The Multinational Business Review, 23(1), pp.36-56.

Wolfe, S.E. and Pyrooz, D.C., 2014. Rolling back prices and raising crime rates? The Walmart effect on crime in the United States. British Journal of Criminology, 54(2), pp.199-221.