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Wal-Mart Stores, Inc. (Case #6)
Introduction
Wal-Mart Stores Inc. is an American retail company with various outlets in different geological zones of the world. These outlets range from discount stores to warehouses. This has resulted in its categorization as one of the leading grocery retailers in the United States. However, the management of this commercial organization recognizes the need to formulate new strategies as well as modification of the existing policies in order to maintain this productivity level (Grant 23). As it strives to meet the needs of its customers in various market segments within the globe, in addition to facilitating physical and operational expansion, the managerial team of Wal-Mart is bound to experience different risks in the internal and external environments. This justifies the need to adopt managerial techniques that give this corporation a competitive advantage over other well-established companies in the market as well as the new entrants.
Risk of Growth and Maturity
One of the evident risks that may affect the performance of Wal-Mart in the future involves the complexities associated with organizational growth and maturity. This may occur due to transformational resistance from human resources, suppliers, benefactors, and other stakeholders. Moreover, the attainment of business maturity involves continuous innovations in order to acquire a competitive advantage in the market segments. The comprehensive long-term arrangements embedded in this managerial concept may have various complications especially due to the unpredictability of these segments. This will limit the implementation of these innovations since the growth of such a business also requires short-term accomplishments in order to gain the loyalty of the existing and potential customers (Grant 29). In order to cope with these threats, the management of Wal-Mart ought to conduct frequent explorations to identify the practical and suitable options of procedural modifications. This will be useful in developing a flexible and open organizational framework that promotes innovative activities. In addition, establishing strategic associations will aid in dealing with the risk of growth and maturity by benefiting from the resources offered by the other participants.
Risk of Overseas Expansion
In addition, this corporation is bound to experience various risks in its efforts to acquire international expansion. To begin with, logistical threats may occur because of the uncertainties regarding the suppliers’ capability to deliver the purchased commodities in time and within the estimated financial plan. In order to deal with such situations, the management of Wal-Mart should expand its supply chain and acquire products from different suppliers. In addition, the current instability of the American dollar may affect the efforts of Wal-Mart with reference to international expansion. In the past, the dollar traded profitably in comparison to other global currencies. However, the current unsteadiness has affected the performance of American companies operating in foreign nations (Grant 47). Accordingly, Wal-Mart should bank with a financial institution that has stable business operations in the United States, as well as the countries hosting its stores.
Risk of Imitation
As a way of acquiring a competitive advantage in the local and global market segments, Wal-Mart’s competitors may attempt to imitate the corporation’s systems. Being a well-established brand, the firm’s high-quality products and competitive prices have aided in obtained the trust of a large percentage of consumers in these market categories. Accordingly, the new entrants and other well-established retailers may strive to imitate the systems of Wal-Mart with the main aim of decreasing the overlapping delivery with other merchants as well as increasing the productivity of their companies (Grant 60). The underlying principle of such strategies is to persuade the customers of Wal-Mart to alter their product and store preferences. In order to mitigate these risks, the managerial team of Wal-Mart ought to increase their innovative capacity. This will aid in enhancing product differentiation.
Risk of Innovation
In addition, Wal-Mart may face business threats associated with innovation despite the positive effects of this organizational aspect. The main risk associated with these efforts is the acceptance of the resultant products by the targeted customers. This is because innovations in such systems as those of Wal-Mart require support from all stakeholders as a way of increasing the competitiveness of the firm in local and global market segments. For instance, with the expansion of online retailing in this commercial subsection, the main competitors of this company may strive to acquire more customers through these technological tools and techniques (Grant 73). The mitigation of such risks requires the management of Wal-Mart to identify and utilize models that will aid in applying these innovative strategies in real-life business situations. This will be useful in attaining the benefits of innovation with reference to the realization of a competitive advantage.
Risk of Being a Target
In the recent past, various
political and social groups have targeted Wal-Mart because of its policies and
business proceedings. This has led to substantial monetary losses because of
the need to increase their advertisement efforts following its tinted image. Such
situations are bound to increase the risks associated with criticism from
external forces. The actions of the labor unions and other associations
regarding the underpayment of Wal-Mart’s employee are a threat to the productivity
and competitiveness of this company in the future. In order to mitigate these
risks, the management ought to modify its marketing strategies. This will be
helpful in branding the company. Moreover, motivating the human resources
through financial and non-financial incentives will suppress such actions from
the labor union in the future (Grant 99).
Work Cited:
Grant, Robert M. Contemporary Strategy Analysis: Text Only. Wiley, 2013. Print.