2-3 page executive summary

Running Head: WAL-MART’S TOP ADVANTAGES AND RECOMMEND ALTERNATIVE STRATEGIES PAPER 0

Wal-Mart’s Top Advantages and Recommend Alternative Strategies Paper

Importance of Innovation for Wal-Mart’s Long Term Survival

When a typical individual contemplates about operations, they incline to think of the repetitive tasks that people perform time and again. Customarily, this situation has never been considered to be a splendid area in almost every corporation. The traditional firms are mostly considered as regions where the heavy lifting takes place. In the minds of many people, nothing about considering operations as an innovation hotbed or that companies becoming innovative in operations is crucial if it has to be competitive in the marketplace existing today (Udell & Pettijohn, 1991). Nevertheless, this innovation in operations is very important in propelling the business to attain success in today’s world. Gone are the days whereby it was enough to stay ahead by just working harder than your rivals. The era when a firm could hold back or sit back, and depend on the profits of a major operation innovation is also gone. This is what Wal-Mart realized to become successful since in the past one decade, the corporation has continuously been innovative in its operation. This action has seen the business survive through difficult times and also survive in the long-term (Bloom & Hinrichs, 2017).

For instance, according to Rice, Ostrander and Tiwari (2016), Wal-Mart Inc. experienced a harsh year during the second part of 2015. Due to the increase of e-commerce investments and wages, the business made some changes and there was a reduction in the earnings from $4.70-$5.05. this seemed to be a bad move for the company but looking at the situation from the perspective of the long-term gains, these measures could assist Wal-Mart survive in the quickly fluctuating retail universe. This is just one among many instances where creative and diverse strategies have been chosen to make sure the business survives for a longer period of time.

Retail Industry Evolution

According to the statistics provided by the retail business experts, the current trends witnessed in the retail industry shows that there are a wide range of changes anticipated to be witnessed in the next five years (Parnell & Lester, 2008). From its analysis, I believe that the following are some of the changes that will occur; a stabilization in sales, as big stores such as supermarkets and hypermarkets evolve to reflect the fluctuating customers’ needs, online will become the leading developing channel at +68% for most shopping with convenience as the next fastest-growing sector. This can be expected between 5 and 10 years to come as proved by the following current events; shoppers are progressively switching their loyalty from bigger stores to channels which suit their needs in a better way, fast growth in the convenience stores’ quality, and constantly improving standards in online and determined store opening courses in the attempt by the discounters to provide shoppers with substitutes for hypermarkets and supermarkets (Freeman et al., 2016).

Wal-Mart’s Top Advantages over Its Competitors

The company’s top advantage lies in its innovative management which has steered it to where it is today. Through its alliance strategy the business formed strategic partnerships with most of their sellers, providing them with the prospective for long-term and huge capacity purchases in exchange for the least possible charges. Moreover, the business has established relationship and communication networks with suppliers to make its supply chain management more efficient due to better-quality material flow with lower portfolios. As a result, global network of retail stores, warehouses, and suppliers is perceived to behave virtually like a single organization (Parnell & Lester, 2008). This has made Wal-Mart to be very successful.

Wal-Mart’s Strategies Could Be Used to Exploit Its Innovation Breakthroughs

To achieve a long-term success and survival, the business could use the following innovation developments to exploit its advantages in the industry; renovation of the traditional processes used in logistics and adopting a process involving leveraging cross-docking. This new strategy involves the unloading of the inventory and directly loading onto a different truck which will be used to deliver the products to the final place (Rice, Ostrander & Tiwari, 2016). This strategy has a great advantage as it will help the company to reduce labor and time which was previously being used to unpack, store, pick and pack inventory before finally sending it to another store or warehouse. This entire process could be used to better the already good relationship and communication networks with suppliers to make its supply chain management more efficient and even harmonize the industrial processes across the organization further (Udell & Pettijohn, 1991). This strategy’s main disadvantage is that it is costly and requires more managerial capacity to see it through.

Moreover, through the strategic alliances formed on the exchange for the lowest prices possible, Wal-Mart can achieve the strategy of offering the least price on the block. This however depends on the possession of a material cost advantage. The company can easily attain this by reducing the costs of carrying inventory, improving in-store diversity and selection, and finally highly economical pricing for the customer. With more emphasis on the innovative systems and processes brought about by technological evolution, the above objectives can be achieved to support the main strategy as well as improving the company’s supply chain to attain a greater efficiency (Parnell & Lester, 2008). The major advantage that the strategy provides the firm with is stabilization in its sales due to increased customers due to better prices. This strategy may affect the business negatively in the short-term thus being a disadvantage for that since low prices means more foregone returns and less profit.

Recommended Strategy for Wal-Mart

For Wal-Mart to keep the gap between it and its competitors, it has to continuously be innovative for long-term survival. For this to happen I would recommend that the business should make innovation a crucial part of its culture and avoid just giving it lip service. This can be achieved through investing in software and technology enhancement teams who are devoted to operations. The company can also educate its employees on the significance of innovation within operations and appreciate the employees who have been effectively innovative and confer the effect of their innovation on the corporation.

References

Bloom & Hinrichs. (2017). The long reach of lean retailing: Firm embeddedness and Wal-Mart’s implementation of local produce sourcing in the US. Environment & Planning A, 49(1), 168-185.

Freeman, et. al. (2016). Wal-Mart innovation and productivity: a viewpoint. Canadian Journal of Economics, 44(2), 486-508.

Parnell & Lester. (2008). Competitive Strategy and the Wal-Mart Threat: Positioning for Survival and Success. (cover story). SAM Advanced Management Journal (07497075), 73(2), 14-24.

Rice, Ostrander, & Tiwari. (2016). Decoding the Development Strategy of a Major Retailer: Wal-Mart's Expansion in the United States. Professional Geographer, 68(4), 640-649.

Udell & Pettijohn. (1991). A Retailer's View of Industrial Innovation: An Interview with David Glass, President and CEO of Wal-Mart Stores Inc. Journal of Product Innovation Management, 8(4), 231-239.