Thus a strategy of strategic adaptation proposed by the Kmart – Sears combine is indicative of low level of change in strategy but high level of organizational transformation. A total reorientation of strategy as well as organization has been adopted by Egghead. KFC has adopted the model of strategic reorientation without major organizational changes. Wal Mart on the other hand has espoused a convergence model which implies low level of strategic change along with low level of change to the organization, thus reducing turbulence to the minimum.
(Sherman: 2005). The organization and strategy are fine tuned to fit each other through what is called as, “continuous tweaking of strategy and operations”. (Sherman: 2005). Compared to the strategies adapted by its competitors, this strategy of convergence has had a greater impact in attaining the goals and objectives of the organization as well as generating profits. Figure 3: The Integrated Strategic Change Model The strategic change management adopted by Kmart and Sears entails a merger and will entail organizational change.
(Sherman: 2005). Reorientation model of change adopted by Egghead involved a total shift of organization as well as strategy to become an e commerce retailer as opposed to a
Convergence model adopted by Wal Mart is frequently referred to as maintenance rather than change and thus achieves logical consistency thereby attaining transformation without a major upheaval. (Sherman: 2005). Adoption of the Ansoff’s risk averse strategies of penetration, market development and product development are also indicative of Wal Mart’s approach to change through stability and consistency rather than abrupt change. Wal Mart is well aware of the need to avoid a cultural clash during growth and development in new markets.
Thus its strategy for expansion in these areas has consistently been through the acquisition route whether it is Japan or South America, Wal Mart has strived to ensure that it builds a coalition through an existing local partner or acquires adequate controlling stake in the company to enable it to channel its strategy. The key leader in leading change in Wal Mart has been Sam Walton who’s the vision has inspired the company and sustained its growth over the years ensuring focus on providing a price advantage to the customer.
The focus of the founder on adaptability is another significant facet of leadership of the management. Thus recognizing that its rivals were gaining advantage by providing differentiated merchandise in 2005, the management planned offering fashionable merchandise with variety at attractive prices in the United States markets. These changes were carried out very smoothly with least turbulence in the organizational or strategic sphere thereby providing a modicum of security and easy assimilation of change by the employees.
This adaptability of the management has led to continued confidence of investors in the firm over the years as was shown during the share holders meeting in 2005, when despite a flat growth, leading investor’s reposed faith in the management’s ability to adapt to change and sustain growth of the company overcoming the problem of merchandising. (French: 2005). Wal Mart thus proves to be a successful model for transformational change management by a large global retail conglomerate.
1. Ansoff, H. (1957), Strategies for Diversification, Harvard Business Review. 2. Alliance (1999). Wal-Mart Stores and America Online Announce Wide-Ranging Strategic Alliance. http://walmartstores. com/GlobalWMStoresWeb/navigate. do? catg=21&contId=4588. (17 May 2006). 3. CRM (Customer Relationship Management) Wal Mart. (2006). http://www. crm-toolkit. com/CustomerRelationshipManagementWalMart. html. (17 May 2006). 4. French, Anita. (2005) Change A-Comin’ To Wal-Mart, Analysts Say http://www. wakeupwalmart. com/news/20050610-tmn. html. (17 May 2006). 5. Heller, Robert. (2005). Changing the scenario: Businesses should plan for multiple scenarios http://www. thinkingmanagers. com/management/scenario-planning. php. (17 May 2006).