In any size organization, it could be difficult to implement changes. More specifically, when a large company such as Wal-Mart decides to make major changes it requires a coordinated, multi-functional effort to succeed. To help Wal-Mart implement the changes it desires, strategic initiatives are put into place to guide them toward both their short and long-term financial goals, such as increasing profit margins via pricing strategies and boosting their production processes ensuring the selling of quality products. In this paper, Team A will discuss the relationship between strategic and financial planning, how these initiatives affect Wal-Mart’s financial planning, and the risks associated with them. Relationship Between Strategic and Financial Planning
Wal-Mart Inc. understands that their success is due-in-part to planning. The two types of planning they use are strategic and financial planning. These two methods focus on different objectives; yet, they have two major links that impact how managers approach the planning process. Strategic planning is “The process of determining a company's long-term goals and then identifying the best approach for achieving those goals” (WebFinance, 2012). Financial planning is described as “the process of estimating the capital required and determining its competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise” (Management Study Guide, 2012).
The relationship between the two both involves defining objectives, gathering and analyzing the data, implementing plans, and monitoring the results. The two strategies rely on money. Without a sufficient amount of money to implement the change, the intended goal will not be reached. It takes money to run a business successfully. Another link to the two is when the strategic planning is implemented and the business is on its way, it causes an increase in revenue and a decrease in costs. This in turn causes the company to end up with more money for use in the business. Ideally, strategic and financial planning are linked in a business sense. Changes in the budget requires the finance team to reevaluate the present strategy in place and if it is significant enough changes have to be made among the management team. Strategic Planning Initiatives
Strategic and financial planning is a significant measure of Wal-Mart Stores success. Wal-Mart continuously plan strategic initiatives to create the greatest business in the industry. Wal-Mart Stores, Inc. has had a continuous and mutual determination to assist the communities with saving money so they may have a better life. Wal-Mart Stores, Inc. is motivated and well-organized on refining their business. Management of the Wal-Marts in the United States feels that the current strategy is working great. Wal-Mart has conveyed a great assortment. Wal-Mart Stores, Inc. is at a point where they are producing authentic improvements in merchandising and operations along with investing in lesser prices (Wal–Mart Stores, Inc., 2012). A strategic initiative plan that was put in place at the beginning of February, 2012 fixated on Wal-Marts mission to capitalize $2 billion in price through expense reduction and productivity improvements during the next two years (Wal–Mart Stores, Inc., 2012). Wal-Mart Stores, Inc. are currently growing their shares and are at a point where they are ready to provide the increasing desires of the middle class customers within the growth spurt markets. Wal-Mart Stores, Inc. feels they are “Powered by Walmart” and seek the initiative that may toughen efficiency and decrease operating expense (Wal–Mart Stores, Inc., 2012). The membership of Sam’s Club was also a key point in the strategic planning and the key goal was to keep the membership base up. Wal-Mart Stores, Inc. has five key strategies that are very essential to their future. The five strategies are developing their...