Wal Mart - Statistics Project Example

Wal Mart GLOBAL MARKETPLACE ANALYSIS Walmart has been expanding its marketplace globally since 1991. Walmart is an international organization with a huge customer base; they are well placed in the United States having penetrated the market well. Wal-Mart is known across the world for offering its customers the products they need at prices they can afford. Worldwide, we serve more than 49 million people in 15 markets outside of the continental U.S., and we are growing. (“www.walmart.com”, (n.d)). Walmart is present in Argentina, Brazil, Canada, Central America, Chile, China, India, Japan, Mexico, Puerto Rico and United Kingdom. Globalization has been a profitable term for Walmart as it helped them grow geographically with increasing profits. People through out the globe have a positive attitude towards this discounted chain retail store which has built their brand name with trust for quality products at a lower price. Retail industry being capital intensive, brought a lot of foreign and domestic investors to the lime light during globalization. There were increase in investments, business opportunities and the revenue of nations. The increase in revenue of a nation directly reflects on the increase in the standard of living of the people which increase in the liquidity and induce buying. It is a vicious circle which bring continues effects to the society. Walmart has expanded globally since the last decade and is in the process of market developments. The North American Free Trade Agreement (NAFTA) and the WTO have paved the way for Wal-Mart to become the worlds largest corporation. These agreements have enabled Wal-Mart to enter and dominate markets with its stores and for it to use those suppliers most willing to pick up, close shop, and scour the planet for the cheapest places to make products. (“Antonia”, (2005)). The introduction of Automatic Identification and Data Capture is a development of technology in the retail industry. Walmart was the first in the retail industry to include the AIDC as their technology. Walmart also conducts ‘Walmart Better Living Business Plan Challenge 2009’, an opportunity for the students, entrepreneurs and the people to come out with ideas on business solutions and also for the betterment of people and nature. Walmart spends a good amount on charity and the wellbeing of their labors. They have a commitment to wards the product they sell. Presence of Walmart in countries generates employment opportunities and it brings over all improvement to the society. INDUSTRY ANALYSIS: Over view of the retail industry: The retail industry is one of the biggest and fast growing industries in the world. There has been an increase in the number of retail stores. America has 15 million employees in the retail industry. A report of The Internal Treasury Department (2005) states retailing is one of the largest industries in the United States and accounts for approximately 10 percent of our gross national product. Retail business covers many different areas, including auto dealerships, bars, convenience stores, restaurants, gift shops, clothing stores, merchandise stores, etc. Key Success Factor: The main factor for success of Wal Mart is their pricing policy. They follow the discounted pricing method which attracts more customers in spite of the distance or the competitors prevailing in the market. The national and international expansions have gained them this cost advantage. Wal-Mart has a compelling competitive advantage, especially in its pricing strategy, that pulls shoppers from greater distances, past other chains, to its stores. (“BNET, the go to place for management”. (1993). Minimization of the labor cost, the merchandise display , adequate stocks at the store in spite of heavy traffic and the initiatives with merchandising are also the success factors of Wal Mart. Driving Forces: The growth of Wal-Mart has been due to the increase in sales which directly reflects the growth and fulfillment of the organization and their achievement of being internationally established. Wal-Mart has more than 7900 stores operating worldwide.  The company has grown with revenues generating internationally. (“Hubpages, Walmart: Conflict or Team Dynamics”, (n.d)). Porter’s force: The intensity of competitive rivalry: The retail industry is highly competitive today. Kmart and Target are the major competitors of Wal Mart. There is a high competition between these three discounted retail stores. Still Wal Mart holds the primary place because of its strategies. Entry of new competitors: As the retail industry is highly competitive there is a high risk of more number of new entrants in the market. It is necessary for Wal Mart to always build a good brand in the market along with innovative thinking and improving the customer base. Substitute products: There cannot be huge substitute products, there can just be innovations that might attract and retain customers. Wal Mart must come up with innovations like attractive merchandising, attractive pricing and excellent customer service The bargaining power of customers: The bargaining power of the customer is very high as it is a highly competitive industry. The customers hold an upper hand in the market. Customer is the King in the retail market and so is for Wal Mart. The bargaining power of suppliers: The suppliers in the retail industry are also highly competitive. Wal Mart has around 100 suppliers, so it has a better bargaining power with its suppliers as it has a huge customer base which is spread over the world and still expanding. STRATEGIC HUMAN RESOURCE MANAGEMENT: Wal Mart is the largest employer amongst the private sectors in America employing about 2.1 million associates worldwide. It has enough staffs to take care of the sales, manufacturing, production, Information Technology and management. Wal-Mart hires quality employees and also provides them training. The management team is the cause behind the success of the organization with their different strategies used in pricing, warehousing, employees, merchandising etc. The 2008 Revenue of Wal Mart is $ 405,607 million. As Wal Mart is improving both in size and revenue it should look at improving the benefits offered to its employees along with taking up social responsibilities. IMPLEMENTATION From the scrutiny, it can be understood that Walmart has to explore new consumer markets globally by making strategic associations similar to the association with Bharathi in India. They should concentrate on consumer oriented markets like India, China etc for expanding their business further. They can break up in to smaller organizations or shopping precinct which should not affect the local markets. Walmart can follow the Gap analysis and concentrate on the market developments, diversifications, product developments and market penetrations which will help them gain new customers and sustain the existing customers globally. The organization can look at a better growth rate through a good marketing plan, production plan, marketplace analysis and a human resource plan. Walmart also has negative influence on the small business prevailing in the country; the small players in the market get hit because of the entry of Walmart. This large chain also pays its labors less when compared to the other organizations in the market which increases the poverty rate. This scenario should change and it should provide better employment opportunities and also look at improving the benefits provided for its labors. They should establish new market places to fulfill the expectations of the prevailing local population. As Walmart is already well established and deep penetrated the American market with their unique culture of providing quality products at low prices, they must look at diversifying their market like entering new sectors along with merchandise developments. Investing in the right markets will gain good revenue and growth. Meanwhile they should also consider the small players and farmers by providing them the opportunity to supply for their materials. Walmart should also improve benefits for its employees who play the major role in the increasing sales through the quality customer service. Marketing Plan: Walmart being number one organization in the market it should look at maintaining the growth rate it has been achieving year on year. It has already saturated the domestic market and hence it should look at developing its market globally. The increase in sales will determine the growth of Walmart, so it should concentrate on various factors like market development as mentioned in the SWOT analysis. They should look at expanding their markets to the unexplored countries and concentrate on product development like introducing new products in the stores of the existing markets which will make them retain existing customers and also attract new customers. Diversifying the markets and products will also help in increasing the sales. By making strategic alliances with even smaller organization in every possible country will help it achieve its goal. The familiarity of the store will also increase its share value in the market. Walmart can plan for new promotions in the store like points or loyalty card, gift coupons which will encourage continuous buying. Walmart should follow the same strategy of the every day low pricing. A healthy work environment, excellent customer service, quick billing systems etc will further increase sales and growth. Production plan There should be a cost effective production plan which should make optimum use of the resources. Walmart should employ trained and skilled employees who do excellent customer service, the raw materials purchased should be of good quality to get a good output. Buying from small scale suppliers will increase their bargaining power and also provide opportunity for the small players in the market. Walmart should follow continuous production system as it produces large volumes with constant demand for products. Wal-Mart Stores, Inc. plans to deploy a store and merchandise planning software system in the United Kingdom and then globally, following a user acceptance and extensive scalability test of the system. (“Progressive grocer” (2009)).This kind of customer centric merchandising system will help in increasing the footfall of customers in turn increasing sales. Global market place drift Walmart should give prime importance to its market place analysis. With well established markets in the United States, it should look at penetrating the global markets. The goal of a market analysis is to determine the attractiveness of a market and to understand its evolving opportunities and threats as they relate to the strengths and weaknesses of the firm. (“NetMBA, Business knowledge centre”) Targeting the right group of customers is the point where the organization hits the first step towards growth where market place analysis plays a major role in identifying them. For Walmart it will be the consumer markets like India and China, where there is good opportunity for market exploitation. Walmart should aim at maintaining its existing customers and attracting new customers. A good market analysis will increase and fasten the cash flow, reduce the expenses and bring familiarity of the organization in the market. Human Resource Plan Walmart is expanding in size and market and hence should look at employing more skilled, trained workers. Merging strategic and human resource (HR) planning activities has become a critical source of competitiveness for all organizations. Executives must be able to integrate strategic initiatives and HR practices to gain competitive advantage in the face of increasingly volatile technological innovation, customer expectations, and global competition. (“Dave”. (1992)). Employees play an important role in an organization’s growth and hence Walmart can give on job trainings to improve their efficiency to serve the customers better. Trainings on interpersonal development, communication skills, selling skills etc will enhance the efficiency of the employee. Employees with right attitudes should be hired. The human resource team is an efficient team which has kept the huge employee base ununionized. Outsourcing the requirements would help in hiring quality employees. There can be options for part time workers which will increase the efficiency of the work force. There should be an internal team which manages the current employees and also make selections of new employees. Conclusion Walmart should Search for new market opportunities and increase the existing potency both domestic and international. They must always have a careful watch aver the competitors’ activities and must concentrate on widening their sectors and must move beyond retailing. They should bring improvements to the employee benefit programs for building a healthy work environment. A customer service center should be set up for providing easy and better quality service. Walmart should strengthen the e-commerce function and give priorities to eco friendly products when producing or selling goods. Walmart should contribute to the over all improvement of the society by allocating more funds for charitable activities and to eradicate poverty by giving equal opportunities. Works Cited BNET, The go to place for management. (1993). A strategic look at the big 3 in discounting – target, Wal Mart, kmart. Retrieved June 26, 2009 from Findarticles Website:http://findarticles.com/p/articles/mi_m3092/is_n15_v32/ai_14334772/?tag=content;col1 Department of Treasury of Internal Revenue Service. (2005) Retail industry, Audio technique guide (Catalog Number 47515G). United States. Retrieved June 26 2009 from http://www.irs.gov/pub/irs-mssp/retail_industry__102005_final.pdf. Hubpages, Walmart: Conflict or Team Dynamics. Retrieved June 26th, 2009 from Hubpages. Website: http://hubpages.com/hub/Walmart-Conflict-or-Team-Dynamics Juhasz, Antonia. What Wal-Mart wants from WTO (2005) Retrieved on July 8th 2009 from http://www.thebushagenda.net/article.php?id=162 NetMBA Business knowledge center, Market analysis, Retrieved on July 8th 2009 from http://www.netmba.com/marketing/market/analysis/ Progressive grocer, Wal-Mart Adopting Customer-Centric Merchandising System (2009) Retrieved on July 8th 2009 from http://www.progressivegrocer.com/progressivegrocer/content_display/features/e3i772f176924f862d45e862307ebf38602 Ulrich, Dave. Questia Trusted online research(1992). Strategic and Human Resource Planning: Linking Customers and Employees Retrieved on July 8th 2009 from http://www.questia.com/googleScholar.qst;jsessionid=KJ3TQJJTGLJZNVyLLyTL9ZGKGpPVgRytn1pyNh3q211Jyy0z4L8m!1057080025!627277496?docId=5000163658 Walmart, Our global presence. Retrieved on July 8th 2009 from Walmart Website: http://walmartstores.com/Careers/7792.aspx Read More