Walmart - Three Strategies

1. How has Walmart been so successful? What has it done well?

Ans.1.

Walmart has been successful because of its following three strategies:-

Strategy of Managing Cost:- Walmart has managed its cost by eliminating the unnecessary cost like box in/out cost, moving cost and recycling cost. Another approach that it uses to manage cost is the budget payroll, wherein, the store managers are able to trace the payroll cost department wise and compare the actual cost with the estimated cost.

Strategy of Managing Growth:- Walmart has managed it growth very well.One of the basic components for its expansion policy has been chasing the right location. It tries to place its store in a town where its easily accessible by all the people and also at a location where they have to bear the minimum cost of transportation. Further , it follows the strategy of acquisition as a means of growing. For example: Walmart acquired Woolco in Canada and availed the advantage of higher sales in a short duration.

Strategy of Managing Human resource:- the strategy for managing people is one of the three important strategies that lead Walmart to be the biggest company in the world with the highest amount of employee. Motivation is the key step followed by Walmart to successfully manage its people. Another basic activity beside motivation employees is internal promotion as well as external promotion.

Walmart is known as the technology leader in the retail industry as it pushed the adoption of universal bar code and the radio frequency identification technology.

It’s integration strategy is also quite good. It provides low- priced alternatives to brand products. It also opened its online store.

2. What problems face Walmart? Are the criticisms of Walmart fair? Would Walmart have received this kind of attention if it were a much smaller company?

Ans 2. Walmart faces the following problems:-

i) Local Communities :- the activists oppose a new Walmart store due to concerns like traffic congestion, environmental issues, public safety, bad public relations and low wages and benefits.

ii) Predatory Pricing and Supplier issues :- Walmart has been accused of selling products at such low costs that competitors have tried to sue it for predatory pricing.

iii) Employee and labor relations:-These issues involve low wages, poor working conditions, inadequate health care, as well as issues involving the company's strong anti-union policies.

Walmart would not have received this kind of attention if it were a smaller company as it would have fewer employees and also fewer layers of management. With fewer employees, a smaller company has