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Business Operations in Your Organization: Strategies for Achieving Competitive Advantage
The company I have chosen to examine is Walmart Stores, Inc. Walmart Store Inc. became originally established in the year 1945 and is in the present day undertaking its operations in retail stores in over twenty seven countries. The company is split into three key segments. These are Walmart International, Walmart United States and Sam's Club. The business undertaken by Walmart as a company encompasses restaurants, superstores, retail stores and also warehouse clubs. The company also undertakes e-commerce through its website Walmart.com. In terms of retail products, the merchandises being sold in Walmart's retail stores include baby products, healthcare products, household goods, electronics, books, automotive products, clothing, furnishings and decor, alcohol, grocery, paper products and so much more. Walmart is a United States global retailing corporation that operates chains of massive discount department and warehouse stores (Walmart Website, 2016).
I have selected this company because it is set in the retail industry, which is one of the most competitive industries and therefore necessitates for a company to have a competitive advantage in order to succeed. Being in the retail business, it is inexorable that the company will experience a great deal of competition and while the company does not have the capacity to control what rival companies do, it can certainly curtail their impact on the company's business through having a competitive edge. Walmart Inc. started out as a single store, progressed over the years and has grown to become one of the largest companies globally with respect to revenues generated. The company faces competition not only locally, but also globally and therefore has to constantly have a competitive advantage in both realms. In particular, Walmart faces intense competition from companies such as Target, Costco, The Kroger Co. and the Home Depot. Another aspect of having a competitive edge over rival companies is the fact that consumers are a large part of the retail business and therefore the company as to constantly reinvent itself in order to cater to incessantly changing consumer preferences and inclinations (Farfan, 2016).
In accordance to Mentzer, Myers, & Stank (2007), forecast ought to be motivated and steered by the actualities of the marketplaces and not the financial necessities of the company. A company that is efficacious at forecasting its sales and also in business planning begins with the process of estimating and predicting sales. As delineated, a sales projection is an estimate into the future of anticipated demand, taking into consideration a specified set of environmental circumstances. Taking into account the expected financial and competitive conditions and preliminary marketing, sales, manufacture and logistic plans, it becomes possible to undertake an estimation of expected demand in the future and from this foundation a business plan and strategy is developed (Mentzer, Myers, & Stank, 2007).
As pointed out by Greenspan (2015), the demand management of Walmart Stores, Inc. is one of the major determining factors to the success of the organization. Taking into consideration the massive size of the company, efficacious and well-organized demand and inventory management is of great significance. Walmart Stores, Inc. starts out on strategic sourcing to obtain products at the paramount price from suppliers who are in a position to make certain they are able to meet demand. Subsequently, the company institutes strategic partnerships with a great deal of their wholesalers, offering them the prospective for long-standing and high volume procurements in return for the least possible prices. In addition, Walmart restructures supply chain management by building communication and relationship systems with suppliers to enhance and develop flow of materials with lesser inventories. The linkage of global suppliers, warehouses, and retail stores has enabled Walmart to operate as if it is a single company (Greenspan, 2015).
The different suppliers and manufacturers within Walmart Stores, Inc.'s supply chain coordinate and harmonize their demand estimates under a concerted planning, predicting and replacement scheme, and every single link within the supply chain is joined through technology that takes account of a fundamental databank, store-level point-of-sale schemes, and a satellite network. In addition, one aspect that has made the company to be quite inventive encompasses the fact that it has been sharing the store level data and information with all its partners, a practice that was not undertaken by numerous companies in previous periods. In actuality, such companies employed third parties in which they had to give compensation for such information (Greenspan, 2015).
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The approach taken by Walmart implies regular, casual collaboration amongst stores, distribution centers and suppliers and a reduced amount of centralized control. In addition, the supply chain of the company, by following and taking into account consumer procurements and demand, permits consumers to efficiently pull commodities to stores instead of having the corporation push merchandises onto shelves (Greenspan, 2015). Therefore, taking this into consideration, it can be agreed upon that an integral part of any demand management process is an execution of an iterative process of sales forecasting and planning (Mentzer, Myers, & Stank, 2007).
Demand forecasting is an imperative aspect for any business. To begin with, if there is an overestimation of the demand, it can lead to a surplus of inventory which can give rise to an increase in labor and storage costs if personnel are forced to physically transport them to the storage facility. What is more, if the goods being dealt with are perishable, wastage can result in additional losses and also a decline in the profit margin generated. On the other hand, if there is an underestimation of demand, there can be a significant and considerable loss of reputation and status of the company is incapable of meeting the consumer demands. Demand estimation or forecasting for the forthcoming period is one of the challenging and problematic aspects faced by companies in optimizing supply chains. An organization has to not only undertake demand forecasting, but also has to lay importance on the organizing activities to meet the demand in the company. Walmart Stores, Inc. is one of the successful companies in demand forecasting through the harmonization of the demand and supply chain cycles by employing real time data (Gayialis et al., 2013).
Walmart Stores, Inc. has been able to attain a competitive edge and power within the market as a result of its efficacious and unified amalgamation of the components of suppliers, manufacturing, warehousing and distribution within the supply chain. To begin with, the company has been able to collect and analyze information from its store levels and this data has been beneficial to Walmart store managers to ascertain the products being sold and their quantity levels. As a result, the store managers are able to place fitting orders to the manufacturing department. By utilizing a digital system, the managers across the organization are able to undertake the forecasting of supplier demands, which shows real time data from cash records and to the distribution centers of the company (Kumar, 2014).
Through the application of an effectual Collaborative Planning, Forecasting and Replenishment (CPFR) structure, the suppliers and manufacturers within the supply chain coordinate their demand estimations. What is more, the company has interacted with its suppliers and brought about the Vendor Managed Inventory (VMI), which encompasses the manufacturers being accountable for the management of the products in the company's warehouses. In turn, the suppliers are able to undertake the distribution of the items in a direct manner to the included stores or distribution centers of the company (Kumar, 2014).
Therefore, the consideration of demand forecasting as practiced in Walmart Stores, Inc. leads me to go along with the conclusion that, true analysis of sales management quite often reveals that the advantage of enhanced accuracy is not worthy of the cost it endures (Mentzer et al., 2007). The expenses incurred in training, obtaining new systems, and enhanced techniques all ought to be assessed and evaluated against the enhancements in supply chain costs, outlays in planning and levels of customer service. In numerous instances, the return on investments on these sorts of investments is intense, but it still ought to be assessed in order to ascertain what an adequate and suitable accuracy level of sales forecasting for every business function within the organization (Mentzer et al., 2007).
Importance of Technology
Technology is vital to any strategy for business process integration in a global organization. In the contemporary, strategic management and technology are deemed to be significant elements in global corporations. A company can employ technology to generate a competitive advantage through forming barriers that deter the entry of competitors, unveiling different and innovative products or technology processes that appeal to new consumers, or altering the rules of competition in the market place (Dasgupta et al., 2009). The selection of proper and fitting technology in the….....
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