Strategic Case Analysis Essay
Because of radical changes that have taken place in the American economy and workforce over the past several decades, among them increased foreign competition, demographic shifts, and the threats of international terrorism, domestic firms have been forced to take a much closer look at their strategic factors than they had in the past (Barnum, 1991), not only in terms of human resources, but strategic resources as well. This is particularly true in the case of Wal-Mart.
Wal Mart is governed as a privately held company, with influence and control still being held by the family of the company’s founder, Sam Walton. This structure has existed from the beginning of the organization and allows for more control and effective implementation of policy and changes.OPPORTUNITIES- Because of the vast financial resources, market presence/position, and innovation that Wal-Mart has readily available, the firm is positioned to embrace new industries, expand global presence, and build on the successful discount retail model that has given Wal-Mart a huge advantage over competitors for decades. Reflecting back on the possible growth of the small town, conventional retail model, Wal-Mart may also be able to carve a lucrative niche by capitalizing on its economies of scale in a smaller retail setting, which would still use the Wal-Mart name to an extent, and offer goods at reduced prices, albeit in a scaled-down store setting.THREATS- At the time of the case study, Wal-Mart was reaching maturity stage, which along with experience and skill, can bring with it apathy and decline.
If growth is pursued in an attempt to overcome this apathy, the growth will have to be carefully planned and implemented to avoid costly errors with uncontrolled, or inappropriate growth. Internally, the possibility of company politics must also be recognized; if the agendas and conflicts of individuals in the corporation are allowed to take root, the strategic planning process can be led astray; therefore, this threat must be taken seriously, as it manifests itself in small and large businesses alike (Jones, 1985).STRENGTHS- Wal-Mart, at the time of the case study, holds the enviable position of being the nation’s largest discount department store, surpassing such giants of the industry as Sears, and having a strategic foothold in all 50 of the United States. Additional strength comes from a global presence, having successfully penetrated foreign markets in Canada, Mexico, Argentina, Brazil, Germany, South Korea, United Kingdom, and Puerto Rico, as well as China.
Innovation is also a vital strength for the company, having successfully launched additional ventures beyond the traditional Wal-Mart store, such as Sam’s Club Discount Warehouse, and the acquisition of grocery retail operations as in the case of the McLane Company. At the risk of stating the obvious, Wal-Mart is also a progressively thinking organization, which is to say that the executive team has shown the foresight to work “on” the business, and work “in” the business. In other words, in the midst of enjoying success, Wal-Mart is wise enough to realize that the future must also be taken into account if success is to be fostered long-term in their current as well as new enterprises. If any organization is to be viable long-term, it is exactly these types of strategic vision that must be embraced and practiced if the organization is to grow and overcome the pains that often accompany maturing businesses such as Wal-Mart (Robinson, et al, 1992).WEAKNESSES- Wal-Mart, as with the case of so many other retailers, is adversely affected by downturns in the economy, political unrest, and of course the pressure that competitors constantly apply in an effort to gain Wal-Mart’s sizeable market share.
There is also evidence to suggest that the traditional, small town retail setting is experiencing a sort of renaissance at the present time (Goodno, 2005) which can lead consumers to pursue a simpler way of shopping if the Wal-Mart model proves to be too complicated as it grows and changes. The very things that make Wal-Mart strong can ironically convert into weaknesses without caution.Organizations like Wal-Mart, with the capabilities and leadership to be versatile and adapative, can realistically pursue strategic alternatives; in turn, the strategic alternatives generate recommended, effective strategy.International Alliances- In the nations where Wal-Mart does not have a business presence, the firm can align with established retailers in those nations. The established retailers will benefit from the talent and resources that Wal-Mart has amassed, along with the name recognition that Wal-Mart can provide.
Wal-Mart itself will benefit in that aligning with established, successful partners will not only reduce the adversarial nature of direct competition, but also avoid the cost and growing pains associated with learning the culture and consumer behavior of a foreign country.Concentric Diversification- While Wal-Mart has diversified into related retail industries like grocery, gasoline and even automobiles in some cases, there remains a great deal of untapped territory for additional diversification. Perhaps the feasibility of fast food operations or something similar can be explored in an effort to increase the diversification of the company’s holdings and open new avenues of opportunity. The previously discussed small retail model should also be considered as a possibility.The resources and management structure of Wal Mart make implementation possible to commence as soon as practically possible; therefore, the implementation stage is merely a question of “when” as opposed to “if”.
Control of the process from within, including the controlling of internal disputes and politics, is a key element of the success of the strategic plans. Regular strategic auditing must continue and direction changed if needed. Without the internal control, the plans will not be able to properly evolve throughout their lifespan.Part 2- Milinder Recycling CompanyThe Milinder Recycling Company has experienced significant growth over the past two years.
Due to this growth, the company is currently encountering problems especially among new hires, there is an extremely high turnover rate. With this in mind, there are several avenues to solve this problem.First, the hiring process itself must be evaluated; are the advertisements for open positions accurately describing the positions and what will be required in the performance of them? Likewise, are the most qualified people being hired? If the wrong person is hired for the wrong position, failure is likely.Second, are the new employees properly trained and made to feel welcome? If a worker feels inadequate or invaluable, turnover is likely which again leads to increased costs and headaches.Lastly, employees must be given regular performance reviews to praise good work or remedy performance issues.
Pay raises for good performance must also exist if the employees are to be retained.