Walmart Strategic Management at Wal-Mart Is a Essay

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Walmart

Strategic Management at Wal-Mart

Wal-Mart is a highly successful but highly controversial publicly traded firm. The most successful retail firm in the world, Wal-Mart also struggles with a number of challenges both to its internal structure and to its public image. Especially as the process of globalization has accelerated and Wal-Mart has been a highly active player, its actions for profitability have at once earned it considerable revenue returns and a declining reputation. This discussion addresses ways that Wal-Mart can use strategic management ideas to return balance to its image.

Historically, globalization has given Wal-Mart the opportunity to bypass domestic labor and environmental laws in order to conduct its production operations at a minimal cost. However, more recently, technological advances have given Wal-Mart a way to improve the strategic management of its offshore production facilities that positively impacts the working environment, the natural environment and the bottom line all at once. As Humes (2011) points out, "the company is pocketing hundreds of millions of dollars with more planet-friendly practices that lower carbon emissions, conserve energy, save forests and radically reduce landfill waste. Soon this sustainability payback will be in the billions. Greening the business, it turns out, is a comfort, not a curse, in a tough economy." (Humes, p. 1)

As a result, efficiency improvements in its facilites, adjustments to its supply chain management through technological improvement and reductions in transportation and energy expenditures are influencing other retail mega-stores to improve their sustainability practices while bringing Wal-Mart greater financial efficiency.

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Using the Industrial Organizational Model, we can see a clear and immediate path to performance improvement for the Wal-Mart Corporation. Specifically, while Wal-Mart has consistently been a leader in revenue within the retail industry, it has lagged behind others in its industry on employee compensation, labor relations and fair labor practices abroad. According to the text by Martorell (2011), through an industrial organizational lens, "the firm's performance is believed to be determined primarily by a range of industry properties, including economies of scale, barriers to entry, diversification, product differentiation, and the degree of concentration of firms in the industry." (p. 1)

The latter of these should incline change at Wal-Mart, which has suffered with prospective customers as a result of its decidedly negative reputation on labor relations and related issues. Looking to companies like Target, who have achieved favorable returns and high profitability while compensating employees at a higher rate and with greater benefits, Wal-Mart can see a shift in industry standards. As a consequence of this shift, the company is falling behind determinant industry properties such as higher functioning employees, lower employee turnover and better public relations orientation. Though some greater expenditures would be required at the outset for employee compensation and benefits,….....

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