International and Recruitment Challenges for Wal-Mart - Term Paper Example

Running Head: WAL-MART STORES Wal-Mart Stores [The of the will appear here] [The of the will appear here] [The of the Professor] [Course] International Challenges for Wal-Mart The strategy that Wal-Mart has been adapting for international expansion has worked well for the company up till now. Wal-Mart, when expanding internationally, buys out the local competition and replaces the stores of the existing competition with its own stores. In this way, Wal-Mart is able to both eliminate its direct competitors and place itself in a strategic location.

Also Wal-Mart, through its distribution channels, is able to offer the lowest prices for branded goods. Wal-Mart earns its profits by decreasing overhead costs and increasing sales through its lower priced goods. Even though, Wal-Mart has been successful in most of the countries, it has not been able to project 100 percent success in every country. In the case of Germany, Wal-Mart has gone through a bad period as they are restricted by the government to lower the prices of the goods at a certain level.

The marketing strategy of Wal-Mart has always been the lowest possible prices and when they are not able to offer this advantage, they lose their USP over the market. Wal-Mart is thus finding it challenging to maintain its unique selling proposition while expanding into international markets. Another country where the store is facing considerable challenges is China. In China people are brand loyal and demand class from their favorite stores. Wal-Mart fails to deliver style to the customers since it is primarily a discount store and generates profits by decreasing over head costs.

In countries such as China where the customers are quality conscious rather than price conscious, Wal-Mart cannot present itself as the cheapest store (Masters, 2004). From the above scenarios, we can understand that Wal-Mart faces the biggest international challenge in having to translate its USP to other countries. Not all markets are similar to those of US and the eastern market and customer psyche differs greatly from that of US. Thus in order to be success in different parts of the world, Wal-Mart has to develop a culture and strategy suitable to the people of the country.

It cannot hope to keep a universal culture and to transcend international boundaries, it needs to first study the culture of the country and then develop presence in the area. Employees should be locals so that the customers develop affinity with the store and also because local employees better understand the culture of their country. Recruitment Challenges for Wal-Mart Wal-Mart, at this time, is not on the top list for treating its employees fairly. Even though Wal-Mart is counted among the top companies in the Fortune 500 list, Wal-Mart’s treatment towards its employees is not the most perfect one.

Since Wal-Mart is a retail store, most of its employees are hired as sales personal in Wal-Mart stores across the world. Wal-Mart has a history of paying minimum wages to its employees in order to decrease its overhead costs. Even though the employees at Wal-Mart are treated as ‘associates’ and are liable to share profits with the company after a certain time period, most do not benefit from the profit sharing. The turnover rate is so high that employees usually leave before they reach the position of sharing profits.

One recruitment challenge that Wal-Mart faces is the high turnover rate. Since employees are generally dissatisfied with their jobs at Wal-Mart, they leave as soon as they are presented with a better opportunity. They see no future in working at a retail store where chances of career growth are minimal at best. With a high turnover rate, Wal-Mart loses efficiency and productivity as it has to focus on replacing the employees rather than focus on improving sales and relationship with its customers.

Also the company incurs costs in the shape of advertising and hiring a replacement and later training the employee for the job. High turnover rate also impacts the morale of the existing and new employees who may leave the job due to increased pressure as a result of high turnover rate. Another recruitment challenge that Wal-Mart faces is its previous reputation. Wal-Mart is known for its anti-labor union policies and negative publicity through multiple lawsuits (Lichtenstein, 2011). For this reason, people are not excited about working in Wal-Mart.

Furthermore Wal-Mart is a profit driven company and thus does not appreciate creativity from its employees. This further discourages potential employees from applying at Wal-Mart. Employees do not wish to be hired in an organization that does not appreciate their skills and further does not allow any room for career growth (Hamstra, 2011). References Hamstra, M. (2011) Wal-Mart Faces Recruiting Challenges, Supermarket News, Retrieved from http://supermarketnews.com/retail_financial/walmart_recruiting_0627/ Lichtenstein, N. (2011) Wal-Mart’s Authoritarian Culture, California: NY Times, Retrieved from http://www.nytimes.com/2011/06/22/opinion/22Lichtenstein.html.  Masters, G. (2004) Wal-Marts Global Challenge, Retail Merchandiser.

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