RUNNING HEAD: BUS499 Assignment 5
BUS499 Assignment 5 – Wal-Mart
Business Administration Capstone
Wal-Mart has held the title of leading retailer in the world for over two decades. With its cost leadership strategy they have for the most part gone unchallenged by other retailers such as Sears, K-Mart, and JCPenny in the United States but have still failed to take a larger portion of the market share in the global economy. It has its operation in more than 27 countries under 69 different banners with 2.2 million associates worldwide (Walmart Corporate, 2012). This paper will analyze the macro and micro conditions of Wal-Mart using a SWOT analysis and the Porter Five Forces Model and will suggest the opportunities to increase competitiveness and profitability. This paper will also include a communication plan along with the corporate governance mechanism and its effectiveness in the operations of Wal-Mart. Impact of Mission, Vision and Primary Stakeholders
The mission statement of Wal-Mart is, “we save money of people, so they can live better.” This mission statement reflects the focus of Wal-Mart towards reducing the cost of its products and services continuously and to achieve the leading position in the retail industry (Wal-Mart Corporate, 2012). The vision of the organization is also to increase the living standard of people by providing them quality products at lower cost, which increased its customer base and facilitated it as the market leader in retail industry. The mission helps the employees to work together and consequently keeping the cost lower for people, which increased the preference of Wal-Mart’s products and services among customers. The management of the organization also includes the flexible and supportive policies, which encourages the employees to provide their best efforts, which also helped the organization to achieve their success. At the same time, Wal-Mart executive management is also focused on the lowering of its cost on continuous basis, so that it could obtain a larger customer base, which facilitates success for the firm (Walmart Corporate, 2012). The employees and management both pursue for the decline in cost of living of people by adopting new and advanced tactics and strategies to reduce the cost of its products and services. It has also made the long-term contracts with suppliers, which has reduced its overall cost and has facilitated a significant contribution in the success of the firm by increasing customer satisfaction through providing them quality products at demand (Kneer, 2009). Porter Five Forces Analysis
Porter’s five force analysis shows the potential success and industry attractiveness for an organization. It is quite effective to analyze the opportunities and threats in the industry, which may influence the operations of firm (Hill & Jones, 2009). The following is the analysis of Wal-Mart’s 5 forces of competition: Competitive Rivalry within Industry: The retail industry is quite competitive as there are several payers in the industry, which are competing with Wal-Mart on the basis of cost leadership. Marshalls, Metro AG, Target, Khols, Ross, TJMaxxx and Tesco are some of the competitors, which may affect the position of Wal-Mart in the industry due to increase in their position in the industry by their business expansion and increase in customer base. The increasing competition within the industry is affecting the operations and reducing its revenues, which may affect the strategic direction of firm (Ahlstrom & Bruton, 2009). Threats of new entrants: Threats of new entrants are low in retail industry in the U.S. due to dominant position of a few retailers on the basis of quality, price and product range. The outstanding distribution channel, brand name, requirements of high capital requirements also creates significant entry barriers (Hill & Jones, 2009). It is significant for Wal-Mart to maximize its...
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