Walmart is an international retailer that majors in the distribution of electronics, furniture, clothing, groceries and many more. The retail company is based in Arkansas, United States. It is comprised of a number of hypermarkets and grocery stores to help in the distribution of these products. The vision of the retail company is to be the best and most dominant retailer for the customers and for the staff members. The mission of the company can be seen to help people save their money so that they can live better. The company’s business strategy obeys cost leadership which states that they have to present low prices. Walmart’s just-in-time philosophy ensures that deliveries are made in time.
Evaluation of the key elements of Walmart’s operational efficiency with its operations strategy and the tasks that do not align with the operations strategy
Walmart Inc. is an example of a retail company that utilizes operational efficiency while delivering products to the customers (Banker, Mashruwala, & Tripathy, 2014). It also adheres to its business strategy which follows the “low prices for all” initiative while maintaining high quality products for the people. The company has an online type of system that customers can use to get access to products so they can order and then have the products delivered to their preferred destination.
For groceries, Walmart uses the “same day initiative” to deliver products to their accustomed customers. The same day delivery services are referred to as Walmart to go. They also use a system of carrier referred to as The FedEx Corp which makes deliveries directly from the stores.
Apart from online deliveries, they allow buying products online with the option of picking the package up from the store and buying online then shipping to the store. They also allow making purchases directly from the stores within the United States.
Some of the tasks that are not in line with Walmart’s operation strategy are profit margins and their business model. The profit margins in Walmart’s case is considered to be thin which results from Walmart’s use cost leadership which dictates low prices for all. The same cost leadership has also contributed to Walmart’s business model to be easily understood by their competitors. This means that their competitors can emulate their business model.
New operation’s strategy for Walmart based on the four competitive priorities (cost, quality, time and flexibility)
The new operation strategy for Walmart would be to balance their profit margins. Since they adopt the use of cost leadership, it means that they often reduce their selling prices. As such, they should also reduce their profit margins and focus more on sales (Banker, Mashruwala, & Tripathy, 2014). Since their business models are emulated by their competitors, Walmart should opt for a more intense innovation. This means that the company will always keep innovation in order to enhance their product and services delivery.
They should also be in close contact with their customers to keep their business relationship intact. The company should upgrade their investment on technology because these are some of the factors that will keep your business models at the best levels necessary.
Structure of the competitive priorities and infrastructure of the production process
The competitive priorities of Walmart follows the cost leadership type of strategy that obeys “low prices for all” while still maintaining quality can also be linked to cost, quality, delivery and flexibility (Gupta & Sahay). Walmart has installed the use of Information Technology by the use of a Retail Link System Technology that helps to establish competitive strategy by helping in tracking and redistribution of inventories within the stores and the shelves.
Enablers that are aligned with the long term plan for Walmart Company
The enablers that Walmart can take into consideration would be opportunities to growth, ones that are related to the customers’ preferences that will enable the business to prosper more in the future.
Another enabler that Walmart can take into consideration is expanding their operations, stores and strategies that are established in developing countries. By expansion, the business grows and so does the market segment.
Another enabler would be for Walmart to adopt an initiative that can enhance their human resources procedures.
Pros and cons of the new enablers
The pros to the enablers discussed above would be increased profitability as a result of the expansion of the business in the developing countries. Another advantage of this would be the attraction of investment in the developing countries (Kortmann, Gelhard, Zimmermann, & Piller, 2014). Growth opportunities are ones that also enables and gives a particular business a chance to develop new products and to also adopt new and future technologies.
The cons to these enablers would be language barriers in cases where the expansion of the business takes place in foreign countries (Lin & Tseng, 2016). Unfavorable taxation from these countries would also undermine the expansion of the business in the developing countries. Another unfavorable factor that is most likely to face the new enabler would be to face stiff competition from other competitors as from the expansion of the business in other countries.
D. Banker, R., Mashruwala, R., & Tripathy, A. (2014). Does a differentiation strategy lead to more sustainable financial performance than a cost leadership strategy? Management Decision, 52(5), 872-896.
Gupta, A. K., & Sahay, A. Wal-Mart India: The Strategy for Growth. Management, 36(9), 714-721.
Kortmann, S., Gelhard, C., Zimmermann, C., & Piller, F. T. (2014). Linking strategic flexibility and operational efficiency: The mediating role of ambidextrous operational capabilities. Journal of Operations Management, 32(7-8), 475-490.
Lin, Y. H., & Tseng, M. L. (2016). Assessing the competitive priorities within sustainable supply chain management under uncertainty. Journal of cleaner production, 112, 2133-2144.