Strategic Design Lens: Walmart

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Business News Analysis Report

Strategic Design Lens

Restoring Wal-Mart

Wal-Mart’s Strategies
Strategic Design Lens sees the organization designed as social system to achieve their strategic goals. To begin the Strategic Design analysis we should first identify the strategic direction was being implemented by Wal-Mart. By the time to revolute the 45-years-old business model, a three-year strategic plan was raised by Eduardo Castro-Wright, president of Wal-Mart. This strategic plan would change practically everything the company does: the way it builds and operates stores, the way it buys and stocks merchandise, the way it hires, trains and compensates employees. The ultimate goals of Wal-Mart’s strategic plan are:

• Cut store growth but improve the sales growth
• Improve the connection with customer
• Improve employee benefits packages

Grouping
The three key tools of strategic design including Grouping, Linking and Alignment are all needed to achieve the strategic goals. The classic options for strategic grouping are to organize by Functional, Product, Customer, Functional/Product Matrix, and Front/back. Wal-Mart adopted the Customer grouping on their organizational design. The most common dimension is geography for such large multistate company. First of all, Wal-Mart grouped by five U.S. regions and staffed them as if they were independent retailers. The Southeast regional headquarters is in Atlanta; the Midwest is run out of Chicago. Regions are headed by locals. Secondly, Wal-Mart intended to tailor roughly 10% of each store's merchandise to the neighborhood. The new strategy tried to make that connection with the local customers by editing for the area and offering a point of distinction. Pros and Cons: Operating regionally could definitely improve the connection with local customers and beneficial employees. However, it would affect the communication between the top...
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