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Walmart is among the largest organization in the world by revenue. The company’s headquarters is in Bentonville, Arkansas. It has been in operation since 1969. Walmart is among the Fortune Global 500 companies because of its revenue, which is $480 billion. It is also the largest employer with an approximately 2,3 million employees in their 11,695 stores in 28 countries around the world. Walmart is also recognized as one the most valuable organizations worldwide in regards to its market value. In the U.S., it is the largest retailer of groceries with sales of $478 billion accrued from its major operations (Wal-Mart Stores, Inc, 2015). The reason why the company has been able to make massive sells lies in its low pricing strategy. In particular, its management considers the fact that their target markets are customers with low income. Walmart also has a huge impact on the economy, with studies revealing that whenever it enters the new market, it becomes a major competitor for other businesses. The company’s value relies on direct connections with manufacturers, which has helped Walmart to reduce costs in its supply chain.
Value creation is an important aspect and a basic strategy for any business to be successful. It helps the company to differentiate itself and make more profit in the market. An organization that is able to create value stands a chance to develop a competitive advantage. It means that when a company like Walmart realized the importance of creating value, it looks for the best ways to add more value and earn a competitive advantage in the market. Michael Porter suggested that organization evaluate their value chain based on their daily activities., as value chain activities determine the effects of profits and costs in an organization, enabling to understand its main sources of value (Brown, Bessant, & Lamming, 2015). Porter divided the value chain activities into primary activities and support activities. The primary activities relate more to physical creation and product support. It comprises inbound logistics, outbound logistics, operations, marketing and sales, as well as service. In their turn, the support activities include procurement, infrastructure, technological development, and human resource management.
One of the primary value stages within Walmart’s value chain is logistics, whereby the company tracks its drivers on a regular basis in order to ensure that operational competency is maintained and the products are timely delivered to their customers. In terms of operation, the company established the three main segments, including super centers, discount stores, and neighborhood markets. As for marketing and sales, Walmart employees wear blue vests with company’s brand on it for easy identification by the customers. Additionally, it ensures that the employees attend to consumer needs by welcoming them and giving them directions in their stores. In regards to service, the company ensures that it is opened as early as 7.00 am and closed at 11.00 pm six days a week. The stores are also working on Sunday from 10.00 am to 8.00 pm, which is the best ways in which they target consumers, who are busy during the weekdays (Wal-Mart Stores, Inc., 2015). Finally, Walmart encourages self-service in their stores, and the goods are first paid for before they are handed to the customer to maximize the inventory turnover.
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Question 2: Level 1 and Level 2 Processes
Level 1 and Level 2 processes take place after the enablement phase has been completed and documented. Level 1 implies an enterprise process map whereby Walmart is viewed from its business process perspective. Level 2 includes business processes list or the high level value chain, which is found in level 1 process. In terms of logistics, Walmart uses the approach that starts from the company (inbound) and then moves outwards (outbound) of the supply chain. The initial step involves improving the inventory to help minimize working capital and transportation costs (Brown et al., 2015). The in-bound logistics provides the company with an opportunity to conduct real savings. The next step involves expanding outwards: Walmart looks for competitive suppliers worldwide depending on the identified needs. Through a performance metrics, the company has been able to keep the performance of its suppliers in check. On level 2, the company ensures that the procurement process is correct and the manufactured products are distributed to their consumers successfully. The distribution process is frequently integrated as a way to ensure that their customers do not miss what they want. It also helps Walmart monitor its stock levels.
The other value stage is operation, and on level 1, Walmart looks for business architecture in order to analyze the supply chain relationship. The latter in this case is to be viewed in terms of process capabilities that improve business performance (Brown et al., 2015). Another operation that assists in bringing value to the company is quality management, which is applied in three tiers of standard. On level 1, the lower tier is used to meet the quality expectations of many of their customers. On level 2, Walmart covers the majority of its average markets to involve other potential consumers and ensure that performance management expectations are met.
In regards to marketing and sales on level 1, Walmart specifies low-cost in its advertisement with the intention of attracting low-cost retailers and consumers. However, on level 2, the company focuses on upper tier to ensure that they meet the quality demands for the markets and exceed their expectations. In particular, the sales personnel schedule a conventional shift with the employees to optimize expenditure on marketing and sales (Kaki, Salo, & Talluri, 2015). Another strategy that also works well for the organization is occasional changes of its operations management to make marketing schedules flexible and capture the demands of a particular group of consumers, for instance during the Black Friday. Lastly, in terms of service on level 1, the operational management ensures that the sales revenues are achieved per sales team since the intention of the company is to operate in different markets amd maximize revenue. However, on level 2, the management team ensures that all inventories for different products are adequate so as to meet the demand costs. By minimizing the stock-out rate, Walmart ensures that it fits in the time needed to fulfill a particular order in the company.
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Question 3: FE7 Framework
Walmart should use the FE7 framework to enhance its productivity. For instance, the company is using Internet to advertise its products. It is the best way to connect with the company’s online retailers. Currently, the company spends about $1,1 billion yearly to expand its online operation and capture more consumers in different parts of the world (Wal-Mart Stores, Inc, 2015). In terms of risk management, the company has spread its risk by opening stores across various areas so that it becomes consistent in its operation. The organization values customer experience by ensuring that the employees attend to them in a friendly way. Good customer experience is the reason why Walmart has been able to perform well in the market. As for the job impacts, the company ensures that it functions in socially responsible way to minimize environmental impacts of operation. Performance metrics is essential for Walmart to determine its main competitors in the market and evaluate its performance. The company’s business process is not complex thus enabling its stakeholders understand its operations and determine its performance considering social responsibility and meeting the employee’s demands. Finally, through procurement and proper documentation, Walmart managed to develop trust with the public and government in its annual release of performance. In such a way, it is easy to keep the company’s operational records.