The critical success factors in customer perspective take account of advancing quality regulation and stalk variety and develop customer service.
Walmart Analysis Project
Introduction
Wal-Mart Stores Incorporation is an American multinational corporation whose primary business is retailing. It is known to operate in chains of hypermarkets, and it has a presence in almost all parts of the world in all the five continents (Santos, & Laczniak, 2015). Over 50 years ago Wal-Mart began as a discount store. The Walton Family’s ability to be innovative and maintain a grasp on the competitive market. Wal-Mart is one of the world largest retail stores.
SWOT Analysis Chart
Strength
Its international presences give the organization lots of revenue to fund expansion projects and hence growth. Resilience in business even in hard economic times is as a result of its international supply chain, and its efficient supply chain is backed with up to date technology only meant to increase efficiency (Smithson, 2017). |
Weaknesses
Narrow margins of profit are as a result of utilizing strategies such as cost leadership since Wal-Mart reduces selling price and hence rely on economies of scale. The model of business can easily be copied by start-up companies and hence increasing competition (Smithson, 2017). |
Opportunities
Due to the high revenues, the organization can easily increase its market base by expanding to the developing nations. Human resource enhancement unswervingly relates to the criticism of their employment practices (Smithson, 2017). |
Threats
Due to the simple business model aggressive competition pauses a threat to Wal-Mart. A healthy lifestyle is both an opportunity and a threat but at the moment, most people are not yet ready for a healthy lifestyle. Due to online shopping, small scale businesses can by-pass Wal-Mart and use the internet to sell their products (Smithson, 2017). |
Balanced Scorecard Chart
A discussion of the CSFs chosen for the organization/segment – Why were these particular factors selected? Why are they important in accessing the success of the company?
The critical success factors in the financial perspective take account of the following;
- Augmenting return on investments by 8%;
- Increase worker revenue by 5%;
- Increase revenue from assets by 5%
These factors are selected because they will help Wal-Mart remain the cost leader. This is one of their main strategies of beating their competitors. By augmenting the return on investment and augmenting revenues from the assets will ensure that the cost of operation is reduced. This will, in turn, increase the profit margin and help turn one of their weaknesses into a strength. The success of the company lies in its ability to provide products that are more affordable to their customers and in this way they will be able to keep away competitors. Furthermore, they able to form a slight monopoly in the market that will prevent new market entrants from dominating the market.
Wal-Mart has to closely monitor their investment decisions. Even though expanding into the developing nations is a way of increasing their market base, exploring new areas comes with challenges. Not every country is suitable for this expansion, and therefore, the countries they choose should be well evaluated to ensure that the company will reap the return on their investment.
Employee Training
The critical success factors in customer perspective take account of advancing quality regulation and stalk variety and develop customer service. In this manner, the company will be able to reduce the number of complaints from their customers. By raising the quality of service given and also the quality of goods sold, customers will keep coming back for more and in this way profits will be increased.
The critical success factors in the learning and growth perspective include;
- Employing external instructors;
- Up surging contribution by workers on decision making;
- Up surging job rotation
By employing external instructors, the workers’ skills will be increased, and therefore, they will be more competent. Competent workers are more productive that those who are not. When individual employees are rotated across different departments, they tend to make use of their talents and have an overall understanding of the firm making them not only multi-skilled but also all rounded (Blocher, 2016). Workers know what is best for them and therefore, when they are involved in decision making the company will be able to implement changes that generate a positive working environment for the workers which is essential in improving workers’ output. Finally, job rotation will ensure that each employee understands the duties and responsibilities of the other one so that they can check each other and when one is involved elsewhere someone else can perform their duties.
The critical success factors for business process perspective include instructing workers to augment effectiveness; implement technology in management and packing. These factors are aimed at reducing the cost of operation. By increasing effectiveness and implementing technology in management and packing the company will be able to reduce lead time on orders and also to diminish the time that customer have to wait for their orders.
An evaluation of the organization/segment to determine if it is achieving each of the CSFs. Analyze each CSF and use data from the measures indicated in the Balanced Scorecard as support for the conclusions.
Financial Critical Success Factors
Wal-Mart targeted return on investment of 8%, and in the third quarter investments, the return on investment stood at 11.22% which is a drop from the second quarter which was 11.33% (CSI Market, 2017). On the other hand, the worker revenue has been fairly constant with only a minimal increase of about 0.66%. This is far off from the target of 5% increase per worker (CSI Market, 2017). The increase in revenue on assets has been steadily decreasing slowly over the years as shown in the table below shows. This also means that the organization is not meeting this critical success factor and this confirms their weakness of narrow margin in profits due to lack of making total use of its assets and convert them into revenue (Stock Analysis, 2017).
| Year | 2016 | 2015 | 2014 | 2013 |
| Total Assets | 199,581 | 203,706 | 204,751 | 193,406 |
Customer Perspective Critical Success Factors
Even though the customer service rating for Wal-Mart Stores has always been low compared to other retailing companies in the world, the ratings have been rising over the years. Wal-Mart has been busy making their stores cleaner and more attractive so that customers can spend more time there shopping. A survey involving, some 2500 shoppers carried out in September last year revealed that 75% of the customers were satisfied with the services and overall shopping experience. This was the highest rating that the company had received since 2013, and this shows a positive trend towards achieving higher quality standards (Wahba, 2017).
Learning and Growth Perspective Critical Success Factors
Wal-Mart has been involved in the training of employees and also ensuring that their employees are competent. Competent employees should be able to ensure that the company is achieving its goals regarding profits. Apart from improving the employees’ skills, the company has invested heavily in offering its workers raises and bonuses. One of the main reasons as to why Wal-Mart is committed to training workers and increasing their salaries and bonuses because they believe that making their workers happy makes them serve the customers better. This also contributes to improving the customer service ratings (Wahba, 2017).
Business Process Perspective Critical Success Factors
With the rise of technology in business, Wal-Mart has been forced to incorporate, information technology to help them manage the business and also help them make business decisions. Information technology has also enabled Wal-Mart to start an e-commerce which works as an online store to ensure that the company competes effectively with the new entrants who may want to use the internet to give them a competitive edge. The business process has been improving because technology is being used and therefore, human error is minimized if not completely eliminated. Due to technology, packaging of goods is done more efficiently and therefore, customers get their orders in time. Technology has been very useful in ensuring that Wal-Mart can maintain its international, massive and complex supply chain (Hassan, Sistani, & Raju, 2014).
Conclusion
Wal-Mart is a company that has become one of the world’s largest retailers over the past 50 years. This project gives a detailed SWOT analysis of Wal-Mart taking into account finances, customer quality, training and their business structure. Based on the SWOT analysis the conclusion is that Wal-Mart has made tremendous growth over the past 50 years and if they continue to create and implement process similar to the ones outline in this analysis. The will continue and maintain superiority in an already dominated market.
