Wal-Mart is one of the world’s largest companies and largest retailer in the world, with over 5,000 stores around the world and nearly 2 million employees there is no reason for this company not to be highly successful. Although Wal-Mart as whole is a highly successful company, they still have problems like every other company. Through Wal-Mart’s history they’ve encountered many obstacles and complications on the way to the top. Most of these problems have found a solution but Wal-Mart still has major and minor problems. Whether new problems or past ones still lingering, either way with a problem you must have solution. Especially with a multi-billionaire company such as Wal-Mart you want to be as efficient and eradicated of as much problems as you possibly can. Major Problem:
In the highly successful world of Wal-Mart they face a problem most companies also have trouble conquering and that is going international. Wal-Mart International is a success in its own right, as it still is the world’s largest retailer but it’s just not successful on its own standards. Wal-Mart conquered North America with successful ventures in Canada and Mexico but not so successful in some countries over seas such as Germany and Japan. Wal-Mart expanded to Germany & Japan in the late 90’s and early 2000’s and for a long time was unprofitable in both regions. Whether its Wall-marts approach on new markets or forcing their culture too quickly, something has to be done about the international division only representing 24% of the company’s total profit. Minor Problems:
Over the years Wal-Mart has experienced criticism over there employee relations like having no labor unions and being known for low pay and heavy reliance on part-time and temporary work. Minor problems such as this one add to the major problem of succeeding internationally because you have to get the trust and loyalty of your employees. Gaining that trust is hard enough in your own market so going in to a foreign market with a totally different culture is really a difficult task. Wal-Mart has to implement ways to get better relationships with their employees in their own backyard, so they can then expand to their international partners or employees in the right way as well. Weak Evaluation Procedures with Suppliers
Also internationally even though Wal-Mart restricted the use of child labor and promoted workplace safety, evaluation procedures were weak and no supplier had been sanctioned for failure to comply with Wal-Mart Guidelines.
Strength: They are consumer friendly, created a one-stop-shop for consumers. Implemented wholesale concept in a chain store (Sam’s Club) Weaknesses: Failure to adopt international customs
Global monopolistic business strategy
Threats: Reliance on Chinese imports+
Emergence of foreign supercenters for local consumers
Opportunities: Inventory accuracy amongst highest in the world Alternative services provided within supercenters
Wal-Mart has exceptional management capabilities due to the expansion and leadership qualities that went into the development of over 5,000 stores in 10 different countries. Wal-Mart’s original vision embraced employees as associates encouraging ways to improve store performance. Managing the personal skills of employees also within the company, providing direction, and facilitating change all went into reaching almost $300 billion in sales worldwide. Although having international woes Wal-Mart still made the proper acquisition and partnerships in order to flourish and sustain within different countries. Upper management set the foundation for an elaborate strategic IT system investing $4 billion in technology for managers to gather real time information store by store and making Wal-Mart the best in class for next generation retail technology.
Structure of Authority and Communication: