pom- walmart case study

8/3/2019 POM- WalMart Case Study

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PRINCIPLES OF MANAGEMENT

CASE STUDY ON: WALMART.INC

CASE ANALYSIS ON: DECISION MAKING



COMPANY PROFILE

y In 1945 Sam Walton opened the first Ben Franklin franchise in Newport Arkansas

y These were small chains that were very successful.

y

In November of 1962 Wal-Mart was opened.

y Wasn¶t until mid 1970¶s that Wal-Mart began to grow.

y Wal-Mart serves more than 138 million customers per week.

y Wal-Mart employs 1.6 million associates worldwide in more than 3,700 storesin the US and more than 1,500 throughout the rest of the world.



MISSION STATEMENT

y They don¶t have a formal mission statement

y They are most interested in the customers needs

y The culture consists of Respect for the individual

Service to our customers

Strive for excellence

y If they did have a formal mission statement it would be:

³To provide quality products at an everyday low priceand with extended Customer service«always.´



SWOT ANALYSIS



SOURCE PROBLEM

y Wal-Mart has been able to achieve almost legendary because of its low-pricedproducts.

y Wal-Mart aggressively maintains

unique distribution systems lower labour costs

gives the company more edge than their competitors.

y However, it can be said that this approach of the company has been also theroot of the problem facing the company in terms of dealing with their profits

and their competitive position in the retail market



SECONDARY PROBLEM

y It can be said that retail industries are prone to a higher competition because of the issue of market saturation.

y In the given case, there is an evidence of both short and long term issues whichhas been experienced by the company.



SHORT TERM SPECIFIC PROBLEMS

y Based on the given case, the short term problems facing Wal-mart are:

Their strategy of cutting their prices

This issue is threatening the sales and profits of the company, since they are notable to meet their target profit because of this price cutting.

The inability of the management to sustain their competitive advantage

Lowering the price of their products may compromise their competitive advantagein terms of considering as a company that provides quality products.

This will have a connotation that customer loyalty in Wal-mart is at large becauseof the low price but not because of the quality of their products.

The inability of the management to provide adequate salary or compensationfor their labour forces because of their cost strategy or approach.



LONG TERM SPECIFIC PROBLEM

y For this case study, the long term problems that can be attached with Wal-Martare in terms of :

3 the criticisms of the people internal and external to the company

3 many business are affected most especially the small business since Wal-Martare enjoying high competitive entrants.

y The company's price advantage extends to groceries, particularly in the largefootprint format.



y Another long-term problem that can be attributed to Wal-Mart is:

Their management approach

Wal-Mart¶s managers are dominated by men; this situation on the other hand,leads to problems like biased promotion decisions .

y This issue clearly speaks of unjust employee treatment and work discrimination, particularly among the members of the management.

y While the company has employed useful promotional policies for the benefit of the employees, the lack of fair implementation makes these policies ineffective;moreover, the lack of appropriate managerial approach on the observance of

these policies widens the gap between the management and the lower levelemployees of the company.

y Indeed, certain actions should have been done to avoid this matter fromhappening.



y In spite of the awareness of Wal-Mart in the consequences of their business strategy, they are still continuously using this approach to sustain their competitive advantage.

Wal-Mart¶s being replicable

In the sense that competitors or new players find it easy to imitate Wal-Mart¶s ability to

attract suppliers by offering higher cost and value for their products.This becomes an unintended problem for Wal-Mart because it compromises the reputation

of the company of offering quality products because consumers always attached thecompany in offering lower prices.

Wal-Mart monopolising businesses

Wal-Mart has been considered a veteran and a notorious in the game, running over eventhose that have been long there before its arrival. These stores end up closing because Wal-Mart incredibly beats them.

Therefore small-town locals have turned down proposals of building a Wal-Mart store intheir area.



3 Discrimination for women and minorities for the business¶ leaders

In terms of employee and promotion issues, such as those among women andminorities, has also been observed in Wal-Mart¶s initial operations. Theliterature indicating the wrongness of this act has probably influenced the business to do away with this conventional practice and belief.



Managers¶ lack of ability to make appropriate personnel decisions.

As they are the ones interacting with the employees, it is natural that they aregiven the responsibility to decide who among the employees should bepromoted.

However, it is also important that the managers are subjected to proper trainings,

particularly how to accomplish performance appraisals of the employees.

Failure to stick to its own policies.

Clear, specific and definite performance indicators that will make an employeeeligible for promotion should also be established initially before the positions

are filled in.



CRITERIA FOR EVALUATION

Based on the analysis above, it can be said that the main goal is to enable Wal-mart to have a strategy decision that will enhance their reputation in themarket and to solve the issue for employment biased and discrimination.

In this regard, there is a need of a strategic change which enables Wal-Mart to

sustain their competitive advantage in the market.

The management of the company should focus of pricing approach andemployment promotion and motivation approach.



ALTERNATIVES

Based on the given case, there are various alternative strategies which can beconsidered in order to solve the short and long term problems of Wal-mart.



SHORT TERM ALTERNATIVES

In terms of pricing or cost based approach, it can be noted that Wal-Mart should be able to use a new approach of pricing that will enable the company to be benefited as well and enjoying much profit.

With this the company may consider the use of expense control.

This would be helpful in ensuring that the company still maintains low price forcustomers and low operating.



LONG TERM ALTERNATIVES

With regards to the long term problems faced by the company, the alternativesolution for this is to have a good promotional and motivationalapproach.

Company development- should ensure that its set policies, such as in personnel

promotion, should be strictly followed by the managers.

All job openings - be posted by the managers and should be communicated well with the employees.

The determinants for promotion should also be relayed to all employees.

Moreover, all eligible employees must have an equal chance for the position

offered. In order to facilitate the development of the employees, a superior whom they

can share their concerns with should be accessible.



RECOMMENDED STRATEGY



SHORT TERM RECOMMENDED STRATEGY

For this, the recommended strategy is to have enhanced the value of their low prices with other differentiating through product diversification.

The company is then recommended that ensure that they must be able todetermine whether their price adheres to the quality of their products and that

this would not affect the overall reputation of Wal-mart.



LONG TERM RECOMMENDED STRATEGY

For the long term approach, the company is then recommended that amend theiremployment policies and make sure that the management is following suchpolicies to avoid discrimination among women and minorities.



JUSTIFICATION OF RECOMMENDATION

Based from the analysis of the case study, it is then appropriate to recommend:

that the pricing and employee development strategy be applied by Wal-Mart

With this type of strategy, Wal-Mart can:

Increase its sales by means of modifying or enhancing its existing products andservices

Support the company¶s potential to reach greater markets

Wal-Mart's multiple product lines will be affected by this strategy- the company starts off the development with its prime product lines.

Company will have sufficient funds to support other relevant activities in the

future Competitors of the company targets similar markets.

Wal-Mart will be able to strengthen the market position of each of its productdivisions, resulting to greater hold to these specific markets



Similar to all other aspects of the company, Wal-Mart must also consider:

their employees as an important factor sustaining their competitive growth

For this reason, the company is recommended to be:

Committed to solve the issue of discrimination through promotion and employeemotivation

Motivation of employees used to be focused on the provision of financial benefits Significant changes that need to be done

For instance, rather than just giving the employees due recognition and monetary rewards based on their performance, the employees are also treated as an importantpart of the business¶ success.

This practice should be further emphasized by Wal-Mart by treating its employees asimportant associates.

Similar to Maslow¶s theory, there are other needs that employees have to satisfy otherthan material possessions.



IMPLEMENTATION, CONTROL & FOLLOW-UP

Wal-Mart is indeed one giant retail company whose position in the industry ismore or less assured.

Nonetheless, there will always be internal and external factors that would affect itand may result to business problems.

However, by means of optimizing the company¶s available resources andconsidering its environment, it is possible for the retailer to overcome itspresent as well as future issues.

From this analysis, it has been stressed that the success of the company is actually

derived from multiple resources. It is then essential that Wal-Mart andcompanies in general identify these resources, and use them towardscontinuous success.



From the results of the analysis, Wal-Mart is left with not much alternative but to pursuethis change management approach.

A good change management play should ensure the management should choose the mostappropriate management team which will enable them to sustain their organisationalobjective.

In this action plan, the company must also give emphasis on the problems that may ariseduring the implementation plan like the completion of the tasks provides unmetschedules and revision of original plans.

y Upon its implementation, the management who will handle the change process mustcontinue to evaluate, monitor and control this change process to ensure that they are inthe right path.

y The management should also consider contingency planning to solve the possible risksand resistance to change which is more probably to occur in the company.

y In this regard, the decision stage must be done by the management of the company, fromthe higher level down to the marketing and production division to ensure that theirorganisational goal and objective for change will be successful.



GROUP MEMBERS

y Ashwath Shetty ± 94

y Aditi Gupta ± 81

y Alisha Khanna ± 83

y Drivjot Singh ± 110

y Lasya C ± 127

y Karan Baikampadi - 121

pom- walmart case study

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