Internal Risk Assessment of Wal-Mart Stores
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Walmart, formerly known as Walmart stores is an American public multinational that manages big retail warehouses and departmental stores. Walmart is ranked by Forbes as the 18th world’s largest company by size and the biggest by revenue. Walmart was incorporated about 40 years ago in the rural Arkansas by Sam Walton. Since then, the company has extensively expanded its operations to a tune of achieving gross revenue close to $250 billion. Walmart has extended its activities from making its own products such as Ol’Roy dog food and e vitamins to banking, sale of used cars, travel and Internet access. Chain has a large customer base of over 150 million customers per week who frequent the 8,800 Walmart retail units in 15 different nations. 2010, Walmart recorded sales revenue of $405 billion, a target that was facilitated by the2.1 million workers employed by Walmart. This paper will look into the strengths and weaknesses experienced by Walmart during marketing, the management, human resources, and finance as well as research development. Furthermore, the paper will briefly analyze how various internal dynamics of organizations affect Walmart’s planned business stability.
Strengths and Weaknesses
Walmart has developed to have a status in the providence of low-priced product variety. Walmart has experienced considerable growth, by establishing its global operations and extending to countries like China, Mexico and Canada. As a market mover and determiner, Walmart has enjoyed significant strengths that other small-retailers dream of; Walmart has a powerful brand that is associated with money value, repute for convenience, as well as a wide range of products. The corporation has a core capability relating to its use of information technology to sustain its international system of logistics. For instance, the top management can be able to predict the performance of individual products from one store to another at a glance. Furthermore, the existence of information technology has helped in streamlining Walmart’s procurement process. Human resources development and management are a key strength that is unique to Walmart. The company has acknowledged the importance of people in its operations, a factor that has led Wal-Mart to invest a great deal of money and time to train employees on how to handle and retain customers (Marketing, 2011).
Regardless of its sizable strengths, both globally and in the United States, Walmart too has its weaknesses. Members of the public have successively and outrageous accused Walmart with under pricing its products, a situation that has kicked out a significant number of small-retailers. Since Wal-Mart deals with several different lines of products, such as food stationary and clothing, there is little or no flexibility as compared to other competitors who deal in specialized products. For being the world’s largest retailer Walmart is bound to suffer from managerial and control problems due to the huge flow of customers, employees and cash.
Walmart’s marketing objective is specific and to the spot; low prices. Walmart’s purpose in marketing remains true to its founder Waltson, who once said that if people were to work together, they would experience a reduced cost of living for everybody as well as provide the world with chance to save and have a better life (Walmart, 2010). By offering low priced products, Walmart has been able to stick to its marketing goals.
Considering the size of the retailer, some locals in the United States have prevented the establishment of Walmart in their local market. When launched, Walmart retail stores have led to economic collision by kicking small retailers out of business due to low prices, and product variety. Walmart has remained the largest retail employer in the United States. The corporation has put into place measures that ensure equal promotional and hiring practices to both external and internal applicants. The presence of career preference in Walmart makes it possible for employees to pre-apply for positions based on their various interests in different careers. During the past over ten years, Walmart has recorded an upward trend in the number of sexual related law suits. Female employees have been seeking compensation amounting to billions of dollars in damages with claims of underpayment and fewer job promotions. Such accusations of gender discrimination have led to skilled manpower seeking employment in other Walmart competitors.
Management and Finance
Walmart’s supply-chain management is exceptionally cost efficient. An effective inventory control system allows Walmart track its merchandise. The corporation handles one of the biggest global distribution operations, consisting of over 40 regional distribution stores. The tracking and shipping procedures have allowed Walmart to retain proper stock on the store shelves, as well as on their online store.
Walmart does not have an official mission statement. The purpose of a mission statement is to provide employees, investors and consumers with a formal business direction and description, as well as providing an attention for focus. The absence of females in the top and well paying managerial position an image that Walmart would not want to display as this would damage the company’s reputation towards its support for women. Walmart owns one of the most advanced development and research departments in the world. This has led to the development of innovative ways of offering goods and services, a factor that has largely contributed to the Walmart’s persistent success.
However, some of its retail stores have been opened without conducting a proper prior research causing an overall poor performance. At the end of the 2009/2010 financial years, Wal-Mart’s gross revenue was projected at $408,214 million while the over-all cash flow was estimated to be $14.1 billion. The company’s financial ratios can be considered as strength as they have always been above the standard of the industry.
Managerial Forces: Control on Planned Business Stability
The managerial forces of Wal-Mart have a great potential; achievement comes with imperfections that have been a basis of numerous confrontations and inconsistencies inside the business. The guarantee to supply the end user with the lowest probable cost is unquestionable. To attain the small charge, reduction of expenditure has become a passion in customs of the corporation. Reduction of costs has facilitated the satisfaction of customers since they save money; but it has also been the origin of shortcomings among workers. Payment for personnel is an immense subject matter at Wal-Mart. Long working hours and extensions along with poor wages has impinged on the workers and has ruined the personnel admiration for the corporation.
Although long working hours has reduced managerial costs, it has also generated an unfair working atmosphere for employees. This type of administration has just materialized in recent years unlike in the past, especially when the company was under the management of Sam Walton, this form of operational state was not heard of. The unreasonable dealing of staff has stained the corporation’s picture. Based on fair operational business environment in the United States, Wal-Mart has been thought of as one of the most terrible companies. The inequitable working circumstances have generated disagreements inside the company, and the outcome has been the filing of numerous unjustified employment complaints.
Generally, Wal-Mart attends to clients and associates over 200 million times every week at over 8,838 selling entities in 55 diverse standards in 15 states. The company made sales of $405 billion during the 2010 financial year, and it internationally hires 2.1 million acquaintances (Wal-Mart, 2010). Walmart has developed to have a name for supplying products at low costs, handiness, and product range. The strengths of the company consist of a dominant trade name, interior proficiency concerning logistics, and a concentration on employees. On the other hand, the company weaknesses consist of not having the suppleness owing to its diversity in merchandise, and because of its magnitude may not manage the full market needs.
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