Question

Imagine that you are helping Lee Scott and his top management team, undertake a strategic planning exercise:

What is one effective approach that Walmart adopted in each of the following activities:
a.purchasing,
b. logistics
c. human resources,
d. store management.
How do each of these help lower costs and/or increase availability of products in its stores?
b. What are two practices relating to the company’s structure and culture that Sam Walton had introduced that helped shape the company’s low-cost orientation?
c.What are two challenges that Walmart has faced or is likely to face in expanding internationally? What is one way in which expanding into financial services will help its core retail business

Answer 1

Walmart's strategic approaches include large-scale purchasing, efficient logistics, streamlined human resources, and cost-effective store management. Sam Walton introduced a frugal culture and decentralized decision-making, which supported the company's low-cost model. Expansion challenges include cultural differences and labor opposition, but entering financial services could offer new revenue and customer retention.

Step-by-step explanation:

Walmart's Strategic Approaches in Various Activities

When considering strategic planning for a company like Walmart, effective approaches in various business activities are crucial. In purchasing, Walmart adopted large-scale procurement to secure lower costs through bulk buying and exerting strong bargaining power over suppliers. For logistics, the company utilizes advanced technology and an efficient distribution system to minimize transportation costs and ensure timely delivery. Regarding human resources, the emphasis lies on cost-saving practices through low wages and limited benefits. Finally, in store management, Walmart focuses on keeping overheads low and optimizing shelf space to increase product availability at lower costs.

Sam Walton's Structural and Cultural Practices

Culture of frugality

Decentralized decision-making

These practices foster Walmart's low-cost orientation by minimizing expenses and empowering local management to respond to market demands quickly.

Challenges in International Expansion

Walmart faces several challenges in expanding internationally, including cultural differences affecting consumer behavior and opposition from local businesses and labor groups. Addressing labor practices and adopting technology to improve supply chain management are key to mitigating these challenges.

Expansion into Financial Services

Entering financial services could support Walmart's core retail business by providing a new revenue stream and increasing customer retention through convenient financial product offerings in-store.