Wal-Mart is a US-based company and ranked third in the global fortune 500 list in the year 2012. The company is the largest retailing company in the world, much bigger than its competitors in the US are. By the year 2012, the retail giant operated more than 3500 discount stores in the US alone, and over 4000 stores in all major countries in the world. In the US, the company operates under the name Wal-Mart but operates under different names in other countries employing more than two million people world over.
The company started in 1962 as a family business, which started trading on the New York stock exchange in 1972. Even now, the Walton family remains the major shareholder in the venture with a stake of 48%. The company’s headquarters are in Bentonville, Arkansas. Wal-Mart derives its core business from its grocery retail line with grocery sales contributing over half of its total revenue. Whereas the company has tremendously grown and expanded in many countries, its expansion plans into Germany and South Korea refused to take off (Coyle, 2010).
Wal-Mart has organized itself into three different operation departments, which sets it apart from its competitors. These are Sam’s Club, Wal-Mart Stores, and Wal-Mart International. It has nine retail formats, which include supercentres, general merchandise, small markets (bodegas), apparel stores, and restaurants. Wal-Mart Stores U.S. is the biggest business division, which contributes over sixty percent of its revenues.
The company has a well-coordinated supply chain and procurement department and operates one of the largest private truck fleets in the world, which supports many strategically placed Wal-Mart distribution centers. However, the company is always looking out for ways of increasing the efficiency of its fleets, developing routes that are more efficient, and developing the sustainability of the distribution centers. For Wal-Mart, the supply management chain is an important area of weakness, which the management should emphasize on improving. As at now, the company has over 140 distribution centers servicing its many stores in the country (Daudelin, 2001).
According to Meredith and Shafer (2010), companies should continuously evaluate their operation management processes in order to remain competitive. This way, companies are able to learn from the past and adequately prepare for the future. This helps the management shift from a reactive approach to solving problems. Wal-Mart has come up with a number of strategies in order to sustain its competitiveness based upon a number of assumptions.
For instance, it has come up with an environmental sustenance program based on the assumption that consumers are currently more aware of the environment than they used to be years ago. While coming up with its Supercenter concept in Texas, Wal-Mart wanted to increase its appeal to the affluent. The assumption was that the rich are more willing to pay a little more for convenience and pride.
During the global meltdown of 2007, Wal-Mart focused on decreasing its prices and sustaining this initiative. The assumption was that the economic crunch of 2007 reduced the purchasing power of the people world over bringing about the need for a greater value for money. The onus was on the company to reduce operational costs for it to offer its products at fair prices.
Even though Wal-Mart’s strategies have been effective making it a retail giant, there is need for the company to adopt more technology-based strategies for it to succeed in its future operations. One area where the company should focus on is the use of online media and ecommerce.
Coyle, J. (2010). The Management of Business Logistics: A Supply Chain Perspective. Cambridge, MA: Harvard Business School.
Daudelin, A. (2001). “Supply Chain Management: The Wal-Mart Way,” Supply Chain and Logistics Journal. Web.
Meredith, J. R., & Shafer, S. M. (2010). Operations management for MBAs, (4th Ed.). Hoboken, NJ: Wiley.