09 Jul BUS499 WK8 Strayer Walmart Business-Level Strategy
Question Description
FOR THIS ASSIGNMENT THE CORPORATION IS WALMART
Consider the corporation you have selected to use in your first three assignments. Identify one of the firm’s major competitors that you would consider working for.
Research the corporation on its own Website, the public filings on the Securities and Exchange Commission EDGAR database (http://www.sec.gov/edgar.shtml), in the University’s online databases, and any other sources you can find. The annual report will often provide insights that can help address some of these questions.
You will do a 15 minutes presentation to the Board of Directors of the corporation. Develop an eight to twelve slide PowerPoint presentation with speaker notes or record a video based upon Assignments 1 through 4. You may choose to compare your chosen corporation to a major competitor with whom you would like to work. You will make recommendations to the Board of Directors based upon your analysis and decision on why the corporation remains or is not a good fit for you.
Determine the impact of the company’s mission, vision, and primary stakeholders on its overall success as a competitive employer in the industry.
Create a SWOT analysis for the company to determine its major strengths, weaknesses, opportunities, and threats.
Based on the SWOT analysis, outline a strategy for the company to capitalize on its strengths and opportunities, and minimize its weaknesses and threats.
Discuss the various levels and types of strategies the firm may use to maximize its competitiveness and profitability.
Outline a communications plan the company could use to make the strategies you recommend above known to all stakeholders.
Develop an executive level Power Point presentation with 8 -12 slides with speaker notes and appropriate graphics or professional video.
Assess efforts by this corporation to be a responsible (ethical) corporate citizen and determine the impact these efforts (or lack thereof) have on the company’s bottom line. Provide specific examples to support your response.
Use at least three (3) quality references. Note: Wikipedia and other Websites do not quality as academic resources.
References must be submitted on a Works Cited page using SWS format. This course requires use of Strayer Writing Standards (SWS). The format is different than other Strayer University courses. Please take a moment to review the SWS documentation for details.
The specific course learning outcomes associated with this assignment are:
Determine ways in which the vision, mission, and stakeholders of a firm impact that firm’s overall success.
Identify how the six segments of the general environment affect an industry and its firms.
Identify the five forces of competition.
Analyze the external environment for opportunities and threats that impact the firm.
Analyze the internal environment of a company for strengths and weaknesses that impact the firm’s competitiveness.
Identify various levels and types of strategy in a firm.
Assess the ethical implications related to strategic decisions.
Predict ways in which corporate governance will affect strategic decisions.
Assess the relationship between strategy and organizational structure.
Use technology and information resources to research issues in business administration.
Write clearly and concisely about business administration using proper writing mechanics.
Attachment preview
Week 8 Assignment 3
Michael Horton
Dr. Grizzell
ruary 24, 2019
Walmart Strategy
Introduction
A strategy answers the question of how the organization determines to achieve its target. There are different levels of plan which include business, corporate and market level. The paper explores how Walmart uses corporate and business level strategy to expand and be competitive in the industry. Additionally, how the strategies are in different level help the business survive in the long run as it strives to maintain the market share across the globe.
The business-level strategy focuses on organizing the core competencies of the firm to provide value in satisfying customers’ needs. The main focus is to help the firm position itself in the industry to gain a competitive advantage (Wheelen, Hunger, Hoffman & Bamford, 1). Some of the business-level strategies include cost leadership, differentiation, and focus low cost, focused differentiation and integrated approach. So, Walmart is guided by the cost leadership where it makes sure that they keep their prices low every day. The everyday low prices philosophy enabled by the economies of scale leads to success in the market. Additionally, the use of online sales makes it even easier for the company to maintain low prices. Around 70 % of the sales for the company was from non-store inventory.
Although the firm strives to be the cost leaders, they have constant improvements in assortments and access of the products are included in business strategy (Huchzermeier, 2). The company ensures that they provide a variety that customers can choose from with the lowest prices and the channel that is convenient for them to make a purchase. The business level strategy has three directions which include increasing customer services, improving groceries that provide variety for customers to choose from and enhancing the flexibility of shopping by encouraging digital business.
Therefore, it is clear that cost leadership and differentiation are the basis of the business level strategies for Walmart (Huchzermeier, 2). The fact that the organization is well known since it leads the industry in terms of costs, the plan may not be sustainable in the future due to the risk associated with cost leadership strategy. First, technology plays a significant role in the current business environment since it makes production, selling and marketing more efficient. Therefore, if the rivals in the industry are ahead in the use of technology, they may be able to hold prices down. There is a likelihood that people may imitate Walmart so that they can hold the costs low thereby increasing competitiveness in the future.
The best strategy that will work best for the company in the long-term is an integrated strategy that focuses on keeping the product prices low as well as offering unique features of the products and services. The combined approach is growing popular particularly in global companies to face both local and foreign competition. The reason that this strategy will help the firm be sustainable in the long run is that it helps in the adaptability of environmental changes (Wheelen, Hunger, Hoffman & Bamford, 1). Walmart faces a lot of changes at a local and global level since they operate in different environments. Therefore, ensuring that they provide a variety of unique products at low costs give a ground to adapt to future changes.
Additionally, it helps the company to learn new skills and technologies that can improve workers’ efficiency and also an opportunity to build their careers. As times moves new skills and techniques are developed to make it efficient for a company to provide value to customers. Therefore, it will be beneficial for Walmart to ensure the business level strategy is open to acquiring new skills and adopting new technologies to maintain competence. Lastly, it leverage core competencies across different units and product line that help in keeping costs low. As indicated earlier, a business-level strategy is the organization of core competencies to create competitive advantage; therefore, when the core competencies that have helped Walmart Company are leveraged it becomes easier to maintain low costs.
A corporate-Level Strategy
A corporate-level strategy helps the firm to position itself to succeed in achieving business goals. The plan is long-term in nature but flexible enough to enable the making of adjustments based on uncertainty and market condition change (Wheelen, Hunger, Hoffman & Bamford, 1). There are three significant strategies which include growth, stability, and diversification. Growth entails that their expansion of operations within and outside the local market. It mainly focuses to add more revenue through sales of products which is achieved through vertical and horizontal integration. Diversification aims to look at the company product and the set success in adding the company portfolio to increase more revenue. When the company gets to optimal market share goal, they need to develop a way that maintains it to avoid losing to competitors.
Walmart has employed a diversification corporate level strategy where they can offer a variety of products at a meager price. It has a different business segment that help link customers to a range of products and also increases their revenue (Clemons, 3). The diversification strategies have worked to their best which makes the rivals unable to outdo them despite that in some countries they have already gotten to the mature stage. Walmart has ensured that they have employed the integration strategy where they have owned other business like ASDA stores limited, Sam Club and more groceries. It ensures that there is a continuous flow of products and they integrate with suppliers which makes their prices more attractive and affordable.
Also, the strategy of business stability is employed, particularly in the US market. They have been among the leading retailers in the US with a good reputation that has contributed to acquiring market share. Also, in the UK, the company has grown and expanded its market to the point of maturity (Clemons, 3). Therefore, together with strategies like diversification and integration, the company ensure that they have a range of products and unique customer services that help them maintain the market. The stability strategy has scared other rivals in the industry since they cannot be able to provide low cost without compromising value. It can be said that the policies are currently working for the advantage of the company but more need to look into the sustainability in the long term.
All the strategies that Walmart has employed can be imitated, but due to its position and economies of scale, it makes it hard for others to beat the retailer out of the market. The primary strategy that can help in the sustainability of the company is the business stability level strategy without ignoring the growth into countries that they have not saturated the market (Reynolds & Yetton, 4). First, in the UK and the US, the company is almost in the maturity phase and the best strategy they need to maintain the market share and keep off competitors from taking their customers is stability (Wheelen, Hunger, Hoffman & Bamford, 1). This can be done by ensuring that they hold prices low than the rivals to make it hard for them to enter the market and also provide an improvement of technology is the key in enhancing purchasing their products.
The Walmart competitive environment is unique since it has to face general merchandise retailer, supermarkets and warehouse clubs (Huchzermeier, 2). The industry is growing in size which is bringing a lot of changes that competitors need to adopt. In the retail industry, the main competitors include Target and Kmart in merchandise retailing. The company has small scale rivalry from the retail superstores like Circuit City. People always enjoy and are willing to shop in Walmart since they provide variety at cheaper cost compared to the rivals. That helps the company stand a better chance to control the market over a longer time. In the warehouse segment, Walmart’s Sam club faces competition from Costco which have high sales that bring high revenue. Costco attracts a lot of income from the fact that they are more innovative which helps to keep and expand the market. The threat from supermarkets is also a direct threat to the firm, but Walmart production capacity in the grocery industry helps them to remain competitive. In the retailer market, Amazon is growing fast and intensifying the competition in the industry. Also, the company has been able to gain share in the market and become the biggest retailer. Therefore, it stands to be the primary competitor that threatens Walmart business despite being competitive.
Amazon business strategy is similar to that of Walmart since they ensure that customers can get the products online at a low cost. Additionally, it has also incorporated the sale of goods that can be purchased online which is the success factor that has kept Walmart in the lead. Walmart ability to hold cost low is through integration and having variety in their store which makes the customer get attracted to shop in their stores. On the other side, Amazon ability to hold prices down is through leveraging synergies between internal resources and external drivers (Kantor & Streitfeld, 6). The corporate level strategy of the company is diversification where it includes providing a range of products to be sold which is similar to that of Walmart. Amazon has not incorporated the use of integration widely as Walmart. Therefore, Walmart still stands a chance to be successful in the long run if they concentrate on a strategy that is technologically driven to ensure that they can reach a lot of people through digital sales.
In most cases, the primary competitor is determined by the market condition and the cycle. The market cycle is divided into three parts which include fast, slow and standard period. The slow market usually concentrates on gaining a competitive edge by engaging in competitive activities. Fast cycle markets do not sustain competitive advantage since there can be imitation which is quick and in some cases less expensive (Tartière & Astolfi, 5). So, either the company acts both in the fast or slow cycle, the competition would not change due to the nature of the business. The two companies provide already produced goods, and the main task is to offer a way that purchasers can buy conveniently.
Conclusion
Walmart remains competitive in the retail industry and have a more significant market share due to the business level strategy employed. They ensure that they are cost leaders which makes other competitors and entry into the market hard. The corporate level strategy is diversification of the company products. They offer a wide range of products which through the economies of scale make it efficient. The competitive environment is intensive since it faces rivalry from supermarkets, warehouse merchandise and super retailers. The primary competitor is Amazon which seems to have similar business and corporate level strategy. The competition cannot change in fast or slow cycle market due to the nature of the company.
Sources
Wheelen Thomas, Hunger David., Hoffman Alan & Bamford, Charles. E., 2017. Strategic management and business policy (p. 55). Boston: pearson.
Huchzermeier, A. ,2016.. How Walmart built sustainability into the supply chain. The Business & Management Collection.
Clemons Eric, 2019. Resources, Platforms, and Sustainable Competitive Advantage: How to Win and Keep on Winning. In New Patterns of Power and Profit (pp. 93-104). Palgrave Macmillan, Cham.
Reynolds Peter & Yetton Phillip, 2015. Aligning business and IT strategies in multi-business organizations. Journal of Information Technology, 30(2), 101-118.
Tartière Thomas & Astolfi Marco, 2017. A world overview of the organic Rankine cycle market. Energy Procedia, 129, 2-9.
tor Jodi & Streitfeld David, 2015. Inside Amazon: Wrestling big ideas in a bruising workplace. New York Times, 15, 74-80.
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