Marketing Implementation Management Control: A Case Study Of Walmart Supermarket

Identification and Evaluation of suitability of current strategy

Discuss About The Marketing Implementation Management Control.

The report throws light on analysing the strategic management process of Walmart Supermarket that is based in United States with more than 2300,000 employees who are employed in the organization (Walmart.com, 2018). It is one of the largest retail stores in the entire economy that is discount store along with superstore model. The net income of the company is $8 billion along with the sales of more than $265 billion in the year 2017. The weekly customers of the respective company are 245,000,000 and this is helping them in internationally expanded Walmart. The mission of Walmart is to help the individuals live a better life and it offers wide assortment of merchandise at low prices in the retail stores.

The different strategic decisions help in aiming at differentiating the organization from the different competitors in the market that is sustainable in nature. Porter believes that the different kinds of decisions in the business are specifically classified as strategic when there is involvement of innovation along with difference that will result in gaining sustainable advantage (Banerjee, 2017). Furthermore, it has commented by different authors that the retailing industry has tried to adopt the discounting style on the merchandise and proper emphasis was provided on strategic positioning such as brand positioning along with accessing the needs of the individuals in an effective manner.

Walmart is one of the major retail companies in United States and the current generic strategy that is applied by Walmart is cost leadership strategy. () has stated that the cost leadership strategy helps the firm in focusing on maintaining the low kind of prices of the different goods and services. Walmart retail store is the one that is known for the low-priced goods and services that are being provided to the customers in the organization. The organization keeps the prices of the products low through adoption of the cost reduction strategy in their operations (Armstrong, 2015).

For instance- it has been seen that Walmart utilises the information technology as this helps in maximising the operational efficiency. Walmart tries to minimize the wages of the different employees for this particular purpose as well. The generic strategies help in determining the various strategies that is utilised in the organization. One of the major strategic objective adopted by Walmart is to keep the costs of operating low in nature and this assists the organization in achieving the different objectives.

Identification of current strategy of Walmart

Product Strategies – Walmart has tried to provide plenty of different products and they try to operate with different suppliers along with customers in order to generate the best quality of the products. After several kinds of tests, it has been noticed that Walmart has tried to change the different kinds of formula and quality for providing the customers with great value products.

Market Penetration: Walmart utilizes the market penetration as the main intensive kind of strategy of Walmart is for the growth. Market penetration helps in selling the goods or services to current target market. Walmart offers different kind of discounts, offers along with special packages to the different current customers and this helps them in gaining competitive advantage in the competitive market as well (Barney, 2017).

Market Development: Walmart utilizes the market development strategy as this is the secondary strategy for growth. This kind of intensive strategy of the growth includes entering into the new markets and sell the same to the target customers. For instance- Walmart has established different new stores to achieve the development of the market effectively. In order to tap the different customers in the market, the company has tried to innovate different techniques as to gain competitive advantage.

Figure 1: Ansoff’s Matrix

Source: (Chernev, 2018)

Product Development: Walmart minimally utilizes the product development strategy as the main focus is on offering new products to the customers in the market. Furthermore, in the current scenario, Walmart do not invest much in the development of the new product; however, the organization is focusing on sales and marketing strategy and this has been analysed that the product development strategy is not essential and significant in the growth of the firm effectively.  

Furthermore, it has been noticed that the different products that are being offered to the different customers in the market are more than 20% less than the different competitors in the competitive market. The main effort of the respective company is that they try to offer the different products and services at the lowest possible prices from that of the different manufacturers (Kotler, 2015).

Figure 2: Porter’s Value Chain

Source: (McDONALD, 2016)

Support Activities of Walmart

• High store volume is the first and foremost factor that has to be analysed
• In order to make managerial decisions, information technology support system is essential

• Low amount of wages in comparison to the competitors
• There are less people employed in the store of Walmart
• Introduction of the senior management with outside kind of retailing

• Benchmark of the competitors are successful
• Cutting edge technology

• High bargaining power with the different suppliers
• There is long period for the different account payable

• High bargaining power
• Disintermediation

• Better in store execution than the other competitors
• They uniquely operate each store

• Distribution stores of Walmart
• The costs of distribution are 2-3% in comparison to the competitors

• The prices that are adopted by Walmart are unbeatable

• The customer executive service is excellent

Therefore, from the above it can be analysed that cost leadership is the current marketing strategy that has been adopted by Walmart. It has been noticed that the company follows the mission and vision by keeping the costs along with prices low in nature. The organization tried to expand globally and achieve the better economies of scale as well. Furthermore, the evaluation of the suitability of the current strategy of the organization is required as this will help in managing and identifying the effectiveness in the strategy and solving the issues in an appropriate manner as well. It has been noticed that there are different competitors in the market that can create negative influence on the growth of the firm and this has to be analysed with implementation of both internal and external environmental analysis.

Intensive Strategies of Walmart

With the help of the SWOT analysis, the strengths, weaknesses, opportunities and threats can be ascertained that will help in analysing the issues faced by the organization relating to their growth in the competitive market. It has been noticed that the company is facing huge issues related to the strategic management approaches used by them.

• It has a strong brand name along with huge presence in the entire economy along with huge market share (Charter, 2017)
• It is one the well-known retail stores in the entire economy and they are successful in implementing their own retail model
• There are huge amount of variety goods and services that are sold at an affordable rate to the customers

• The international presence is low in nature
• Late entry in the online retail market
• The company is losing competitive advantage in the entire market

• The promotion is done through proper advertisements along with sponsorships
• Seeking the entire growth with the help of strategic acquisitions along with different franchise models (Morschett, 2015)

• There is huge competition from different international players
• There are discounting kind of wars with Coles Supermarket
• Slow retail market growth in the entire Australia

From the SWOT analysis, it can be analysed and identified that it is one of the most powerful retail brands in the entire market. Walmart has different kind of good opportunities in markets of China along with Europe and this mainly focuses on the acquiring the market with acquisition of the different small stores in specific markets. However, it has been noticed that Walmart is under threat as to sustain in the top position in both international and national market.

The PESTEL analysis can be performed in the organization as this will help the entire company in analysing the different pressures from various aspects of the entire external environment. It is the framework or the tool that is utilized by the different marketers in monitoring and analysing the macro environmental factors that can create a negative impact on the entire organization.

Political Factors

• There is political pressure on Walmart as due to the duopolistic nature of the entire retail market (Payne, 2014)

Economic Factors

• The easing kind of regulations in the market is making it easy for the new entrants to enter into the market in an easy manner
• The consumer spending in Australia impacting the retailers that is lacklustre in nature

Social Factors

• The poor kind of relationships with the various suppliers that is leading to the change in the culture of the business (Wilczak, 2014)

Technological Factors

• The proper implementation of the SAP based technology has helped in improving the overall efficiency of the different products and services

Legal Factors

• There is legal battle with the Consumer Commission and Australian Competition
• Recommendations for proper implementation of the different codes

Environmental Factors

• Proper investments have been done in different initiatives such as energy efficiency

From the previous chapter, it has been analysed that the respective organization has focused on the cost leadership strategy in an effective manner. It was seen and noticed that the company did not provide much focus on the customer service strategy and this has affected their brand image in a negative manner. Furthermore, it was noticed that there is tough competition for Walmart in comparison to the other competitors such as Woolworths and Tesco in the market (West, 2015).

There are different kind of factors that is affecting the performance of the organization Walmart are as follows:

• The number of competitors has increased to a huge extent in the market and this has caused huge negative influence on the company as well. Furthermore, it has been noticed that the respective organization is not being able to provide different kinds of products and services that is demanded by the different customers in the market (Tomczak, 2018).
• Secondly, the customer service department of the respective retail store is not performing well in the organization as this is causing huge negative influence on the company. It has been noticed that the inventory management is not being maintained properly by Walmart and this is affecting their presence in the entire market as well. The marketing strategies are not at all innovative in nature and the decrease in the wages of the employees is the other factor that is affecting the morale of the employees (Tomczak, 2018).
• Lastly, it has been noticed that the company is not being able to provide the employees with the required and sufficient amount of wages that is necessary inn nature. It has been noticed that the decrease in the rate of wages has led for managing the operational excellence of the company, however this has caused demotivation on employees. It has been noticed that due to such decisions, the entire productivity of the organization has been reduced as well (Charter, 2017).

It can be analysed that the current strategy that has been adopted by Walmart is interesting in nature to a certain extent that has helped the company in being the largest retail store in comparison to the other competitors in the market. However, there are different issues related to the customer service, marketing and personnel department.

It was noticed that the respective company has not been able to focus much on the customers needs and preferences and this has affected their brand image in the market. Furthermore, it has been noticed that in order to gain the most profit in the entire competitive market, the company tried to reduce the wages of the employees and this has affected the entire reputation of the company.

Porter’s Value Chain of Walmart

Furthermore, it was noticed that the employees were demotivated and this affected the morale of the employees as well in the company. Walmart did not focus much on the product development strategy as the intensive strategy for the growth of the organization. Walmart did not invest a huge amount on the new development of the product and this can be a huge issue for the company in the future as well.

As to improve the strategic decisions that are taken by Walmart, it is essential in nature to understand their differences and issues in comparison to the other competitors in the market.

The marketing communication strategy along with turnaround has to be adopted by Walmart in an appropriate manner as this is one of the key drivers for success in the market. In order to retain the lost customers in the market, this is essential for Walmart to introduce new advertising and marketing campaign that will focus much on lowering the prices of the goods and advertise their products in the market as well.

Walmart needs to implement the entire usage of the social media networks in such a manner that will create media platform n advertising the products along with creating strong relationship with the different customers in the entire market. With the implementation of cost leadership strategy, Walmart has to implement the product development strategy in an effective manner as this will help them in maintaining competitive gain and popularity in the market.

Furthermore, Walmart has to analyse the communication strategy effectively as to focus mainly on product expansion strategy effectively. Walmart has to adopt strategies that will help and assist them in expanding their presence in the international market effectively as well. It has been noticed that Walmart do not provide much focus on the employees’ wellbeing and welfare. It has been recommended that Walmart has to implement the turnaround strategy that will focus on the employee benefits and this is treated as the retrenchment strategy to provide motivation to the different employees effectually.

Secondly, the strategic alliance is the other strategy that can be adopted by Walmart in the entire competitive market as this will assist them in maintaining their value in the entire market. It has been seen that Walmart has different competitors in the market and they are huge threats for the company as well.

For such reasons, Walmart has to strengthen their weaknesses and threats and turn them into their strengths and opportunities. These will help the company in maintaining their value in the competitive market as well. Furthermore, it was noticed that Walmart was not being able to customer centric in nature and this has caused huge issues in the productivity of the organization as well.

Internal Environment Analysis

In such scenario, Walmart has to focus more on the needs of the customers in the market as they are the major source of their income. The customers are the assets of the company who are required to be valued and they need to strengthen their relationships with them as well. In the present scenario, it has been noticed that the respective company has been one of the largest retail stores in the economy, however there are different issues relating to the customer service quality and this is affecting their sales and revenue of the company in a negative manner. Walmart has to analyse the different threats that are being faced by their company in a proper manner as this will provide them the scope to solve such issues with proper implementation of different strategies effectively.

The growth strategy of the company has to be effectively maintained that will help them in expanding their business in the international market. Lastly, the cutting-edge technology has to be adopted by Walmart as this will help them in learning about the needs and grievances of the customers. Proper adoption of the low-cost strategy has to be continued to be implemented by the respective company effectively that will help them in more popularity in the entire competitive market.

Figure 3: Hubbard’s Model

(Parker, 2015)Source: (Kotler, 2015)

From the above diagram, it can be analysed that there are different strategies such as environment, capabilities, systems, people, leadership, culture along with the structure. It has been noticed that the different strategies that is required to be implemented by Walmart has to focus on all the different factors as this will help Walmart in understanding the circumstances.

From the Hubbard’s model, it can be analysed that when the strategy will be implemented by the respective organization, this is essential and appropriate in nature to analyse the environment in which it is operating the business. While Walmart wants to expand their business internationally, this is mandatory for them to check the environment effectively.

Furthermore, the capabilities of the company have to be checked by them in order to analyse the weaknesses in comparison to the environment in which they will be operating in the future. The organizational capabilities have to be identified and analysed effectively as to analyse the threats along with the opportunities that can be gained by the company effectively.

The leadership strategy has to be analysed and identified by Walmart officials as this is the main requirement. Leadership is the main element in the Hubbard’s model that has to be followed by the company effectively to gain competitive advantage in the environment wherein they will be operating their business.

External Environment Analysis

The people are the other essential component in the respective model as this will help the company in understanding the tastes and preferences of the company. It has been analysed that the individuals are the main element who are required to taken care by the officials of the company as they help in gaining productivity of the company effectually.

The culture and structure of the organization is the other main factor that has to be undertaken and analysed by Walmart in order to improve their culture accordingly. It is essential in nature to analyse and understand the different kinds of structural change that has to be adopted by them effectually. The structural change is mandatory in nature to be adopted by the company to make such changes in their organizational structure to meet such requirements of the respective country as well.

Lastly, the systems play a major role in the implementation of the strategies by the respective organization named Walmart. The information systems play a major role in analysing the strategic role and this helps them in gaining competitive advantage in an effective manner.

There are different kind of key issues that can cause huge pressure on the implementation of the different strategies in the organization. It has been noticed that the leadership strategy along with people management is not up to the mark as the customers are not provided with proper importance. It has been noticed that the customer service department of Walmart is not performing well in the economy as there were issues relating to the providing satisfying services to the different customers.

Therefore, it can be recommended that the customer service department has to be provided with proper services as this will help the company in managing the grievances of the customers. It is essential and important in nature to understand the requirements of the customers and this can be possible with proper and appropriate leadership strategy in the organization. This will help Walmart in being the most competitive company in the entire competitive market and gain competitive advantage as well.

Conclusion 

Therefore, it can be concluded that proper strategic management is essential in nature as this helps and assists the company in understanding their strengths, weaknesses, opportunities along with threats. A SWOT along with PESTEL analysis has been done in order to improve and optimise the strengths of the organization and this helped in minimizing the organizational threats.

Furthermore, the Hubbard’s model has been applied that has helped and assisted in understanding and analysing the different kinds of issues and solved them with implementation of technological advancements in the company. The strategic plan has assisted the company in reducing the issues and monitor the different methods that can help them in gaining success in the entire competitive market. Lastly, it was seen that the company was competitive in terms with product and pricing strategies.

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