Strategic leadership2 - Essay Example

  Strategic Leadership 2       Strategic Leadership 2 A value chain refers to a sequence of events that an organization functioning in a specified sector undertakes so as to provide significant services or products for the market. The most significant level for developing a value chain is not the corporate or division level, but the business unit. Product pass through actions of a chain in order, and at each action the commodity attains some value (Bennett & Blythe 2002, p. 17). Chain of activities provides the commodity extra added value than total of the separate values of activities.

In contrast, a value network is a business assessment point of view that illustrates technical and social resources between and within businesses. The intersections in a value network signify individuals (Bradley 2005, p. 26). The intersections are linked by associations that signify intangible and tangible deliverables. These deliverables may be in the form of financial value or knowledge or other intangibles (Maed 2005, p. 53). In addition, value networks signify interdependence. They represent the total worth of services and products (Morrill 2007, p. 31). This paper will look at how well Wal-Mart managed their value chain and value network.

For Sam Walton, Wal-Mart’s founder, satisfied customers and low prices were the governing standards to retailing success (Sanders 1998, p. 45). Sam Walton emphasised on providing quality products at daily minimal prices, combined with the provision of pleasant services. This pushed Wal-Mart to its present situation as the largest retailer in the whole universe. Currently, the organization utilizes the identical standards to determine the value of every innovation it takes into account (Merritt 2008, p. 91). The value chain and value network of Wal-Mart increased due to their expansion into foreign markets.

Wal-Mart has efficiently managed their value chain and value network. Wal-Mart developed a distinct pricing method that differentiated it from its competitors and gave it a competitive advantage over rivals. By reducing the prices of commodities and opening numerous retail stores in different parts of the world, Wal-Mart efficiently managed their value chain and value network (Hill 2010, p. 46). Wal-Mart adequately managed their value chain and value network by realizing the significance of being unique from its competitors.

From the initial stages, the management of Wal-Mart decided to a dissimilar set of clients in a dissimilar set of markets (Peng 2008, p. 92). Wal-Mart chose to establish fairly sizeable stores in regions that were being ignored by their rivals. The organization searched for areas that were isolated, with a few number of individuals. This was also an easier task considering, Sam Walton, the founder of the organization, was well aware of the territory (Adair 2003, p. 73). He also spent a large amount of his time in Wal-Mart stores, and making random visits to distribution centres and stores to ensure customers are properly served and satisfied.

In addition, the organization’s management, employed homespun business knowledge and folksy charm with progressive supply-chain and information technology management (Walton 2009, p. 553). This ensured Wal-Mart sufficiently managed their value chain and value network (Freedman 2004, p. 81). In addition, Wal-Mart properly managed their value chain and value network by expanding and providing a large number of commodities and services, for instance, health clinics, groceries, financial services, fashion clothing, online prescription drugs, and music downloads.

This was meant to provide significant services or products for the market (Mullen & Stumpf 1992, p. 38). Wal-Mart also utilized sizeable size with quick responsiveness and speed towards customers. In addition, Wal-Mart leaders utilized technical and social resources within the business by establishing their individual discount store idea. The organization consistently tried out a number of retail designs (Steger 2010, p. 65). The organization designed retail formats, for instance, Dot Deep Discount Drugstores, Supercenters, warehouse clubs, and Helen’s Art and Crafts to promote their products and services.

The warehouse clubs utilized a few lines and numerous commodities were available on minimal customer service and pallets (Walton 2009, p. 554). The notion was to make the most of economies during buying, limit operating prices, ensure the members get the savings through extremely minimal prices, and ease customers’ accessibility to commodities and services (Emiliani 2008, p. 71). The organization was successful in managing their value chain and value network, by penetrating different markets all over the world.

Wal-Mart established numerous stores in different parts of the world, for example, Asia, Canada, United Kingdom, Germany, among others. For instance, the organization penetrated the Canadian economy by buying 120 Woolco stores from Woolworth and making them discount stores. This made Wal-Mart Canada’s leading retailer (Walton 2009, p. 554). In addition, the expansion of Wal-Mart to the international market concentrated on meeting the needs of the clients by steadily and adequately offering a mixture of considerable services and successful results for the customers (Sullivan & Sheffrin 2003, p. 43). Finally the organization sufficiently managed its value chain and value network by asserting that its cost beliefs charges products at a minimal price in order to assure clients that Wal-Mart’s prices will not change regularly due to promotional activity.

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Sanders, TI 1998, Strategic thinking and the new science, Free Press, New York. Steger, M 2010, Globalization, Sterling Publishing Company, New York.  Sullivan, A & Sheffrin, SM 2003, Economics: Principles in action, Prentice Hall, New Jersey. Walton, S 2009, Case 5: Wal-Mart stores incorporation.