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Introduction
of Management for Walmart Company
It is a fact that a company achieves
success and then sustains it for long term, if they manage their business processes
well. If business is being managed with a proper strategy, which allows it to
achieves its goals and objectives, and then things always remain on right track
for such business. So, it means that management of the business is an important
factor behind its success or failure. Keeping this fact in view, this paper
will do the management analysis for Walmart Company, and its management will be
critically evaluated to see that how things are being done at Walmart. The
company started its operations in 1962 with the opening of its first store at
Arkansas, and has been achieving so much success since then. They have been
doing so many things right in managing their business that they have becomes
one of the world’s best in retail business. The business experienced so many
issues over the years, but company kept managing every issue and growing on
large scale. Walmart is one big success story to look at that how their management
worked best for them, and how they became a huge giant in the retail business.
Critical Analysis of the Walmart
Company
It was mentioned earlier that
companies have to do a lot of things to keep their business on right track, and
if their management is of high standard, then they can achieve long term
success. So, Walmart will be critically analyzed as well as evaluated to see
that how business management is done at Walmart, what has been their mission
and vision driving their business forward, and how they worked in terms of
financial performance, competition, stakeholder analysis, employees, employees
and innovation & growth. These aspects of the company will be analyzed with
close look at its management and strategy.
The Balanced Scorecard of Walmart Company
Vision, Culture, Structure of Walmart Company
The companies are driven by their
vision that what they want to achieve through their business. If vision is not
clear enough, then it is hard to set the right pathway for future. Walmart has
been following a clear vision, which allowed them to develop their work culture
and structure accordingly. Earlier, their business was following the vision,
which stated that “To be the best
retailer in the hearts and minds of consumers and employees.” It clearly
depicts that they wanted to become number one retail choice for customers, and
they did everything to achieve this. It can be said that they have been very
much successful in doing so over the years. Then a time came, when online
retail business started to get attraction from customers, so companies like
Walmart had to explore this business landscape. They entered in online retail
business to capture the share of online market as well. Now, it was again
important to change their vision so that it can overlook both categories of
business. So, investment community meeting held in 2017 articulated the new
vision for the company, which stated that “Be
the destination for customers to save money, no matter how they want to shop.”
It shows greater awareness of company’s management to keep altering their
vision and strategy according to coming changes and demands from the retail
market
It was important for Walmart to
develop a work culture and organizational structure, which respond well to its
vision and strategy. They are one of the largest retail businesses in terms of
number of employees, so their success is a great example of managing business
and human resource effectively and efficiently. They wanted to become the best
choice for customers so they adjusted their work culture accordingly. In their
organizational culture, they kept their customers on top of the priority list
so that they can give best services to their customers. They integrated their
work culture to strive for efficiency and excellence so that best actions are
taken in favor of customers. To support this culture, they developed an
organizational structure, which allowed its employees to work for the benefits
of customers. The vertical hierarchy is used in its organizational structure,
where policy comes from the top and then passed on to corporate managers, who
then delivers it to store managers, which ultimately come down to employees. So,
they have developed a strategy, which asks to do everything to keep customers
happy and satisfied
Industry and Primary Competitors of Walmart Company
The retail industry comes with an
intense competition for Walmart as margin of error is at minimum level for
Walmart in this market. There are so many local as well as international
businesses such as supermarkets, warehouse clubs, specialty stores, variety
stores, drug stores, department stores as well as discount stores along with
ecommerce businesses. All of these business segments are giving a strong
competition to Walmart, making its life difficult in so many ways. The
competition is not only on the basis of retail site locations, but it also
there to attract as well as retain quality number of employees. This
competition with primary competitors is also based on various other factors
such as unemployment, inflation, deflation, tax rates, interest rates, currency
fluctuations, cost of goods, buying patterns & behavior of consumers,
disposable income of consumers, and many other competitive pressures. It
clearly shows that retail industry is not an easy one to survive for Walmart as
they have to deal with variety of challenges to stay ahead in the competition
Financial Performance of Walmart Company
The company is having three segments
of its business including Walmart International, Walmart U.S as well as Sam’s
Club. It is important to look at financial numbers to review its financial
performance collectively in all three segments. According to 2018 annual report
published by the company, their total revenue was $500.3b, whereas operating
cash flow was $28.3b. The total capital expenditures spent by the company in
2018 were $10,051m, which was $10,619m in 2017. So, there is slight difference
in this regard showing a stable performance. The return on assets (ROA) in 2017
was 7.2%, whereas it was 5.2% in 2018, which shows a clear decline. The report
explained that decline in ROA was due various reasons such as loss due to debt
extinguishment, and operating income decrease. The return on investment for the
company was 15.2% in 2017, whereas it was 14.2% in 2018, again showing a
decline. The report revealed that ROI decline was observed because operating
income of the company experienced decrease. However, total assets for the
company were $198,825m in 2017, which reached at $204,522m in 2018 showing a considerable
increase. It is also important to look at revenue for 2017 to compare with 2018
so that overall financial performance can be measured in terms of revenue. The
total revenue of the company was $485,873m in 2017, whereas total revenue in
2018 was $500,343m, which shows that in terms of earning revenue, the company
is doing well. The Walmart U.S segment also observed increase in terms of net
sales as compared to year 2017. Same increase in net sales was also observed
for its Sam’s Club segment as well. The net sales numbers for International
segment were also better in 2018 as compared to previous years. It means that
overall financial performance of the company has been stable and showing
satisfactory numbers in most parts
Customer / Stakeholder Analysis
The company has been keeping its
customers as well as stakeholders in view, while its management has been
planning out business strategy. The stakeholders such as shareholders,
suppliers, consumers, society as well as community have always been involved in
to share value so that Walmart can become a trusted retailer for everyone. They
strive to do things on the basis of ethics by adopting every right way to do
business. Any wrong and unethical practices are avoided in every aspect of
business. It is a fact that customers like Walmart for its low prices with good
quality products. Moreover, the company is not only striving to save customer’s
money, but time as well. So, more online grocery pickup locations are being
added all over United States. The current number of pickup locations is 1100,
and company is planning to add at least 1000 more locations for convenience of
their customers. These facts show that company is doing everything to keep its
stakeholders and customers satisfied
Operations and Employees of Walmart Company
It was mentioned earlier that
company is having three business segments; Walmart U.S, Walmart International
as well as Sam’s Club, and its operations are based on these three segments. The
operations for Walmart U.S deal with operations within United States. It is
important to mention here that Walmart U.S segment is the largest operations of
any other segments. The second largest operations are dealing with Walmart International
segment, where company is dealing its business outside United States. The third
operations segment is Sam’s Club, where membership only warehouses are
operating for specific number of members. The operations results in U.S
segments have showed great results, but international segment operations are
also growing with the passage of time. Walmart is one of the largest companies
in the world in terms of employees’ numbers. According to 2018 annual report,
the number of worldwide employees was around 2.3 million
Innovation, Change, Learning and
Growth
The 2018 annual report showed the strategic
direction and focus of company in terms of innovation, as its first page has
mentioned the words “accelerating innovation”. The company has been digitizing
the customer’s experience in their stores. They have changed so many things
through innovation to make sure that their learning and growth continues in the
future as well. In 2018, the company launched its mobile express money and pharmacy
services with the help of innovation. They also acquired ModCloth to innovate
more in their operations. They also acquired Bonobos and opened Sam’s Club Global
Flagship Store on JD.com to continue their growth strategy. So, this is how
they are managing business with innovation and change to continue its learning
and growth at a rapid pace.
Conclusion of Walmart Company
After critically analyzing and
evaluating management practices and techniques in Walmart, it can be said that
company is doing things right in its most parts. The way they are handling
business operations and striving for the best services for their customers, it
is more likely that they will gain more revenues and success in coming years. The
company’s management has allowed it to keep its growth, revenue and financial
performance at a stable level, which promises more success in future by staying
ahead in the competition.
References of Walmart Company
Bhasin, H. (2018). Top Walmart Competitors.
Retrieved March 19, 2019, from
https://www.marketing91.com/walmart-competitors/
FERGUSON, E. (2019). Walmart’s Mission Statement & Vision
Statement, Generic & Intensive Strategies. Retrieved March 19, 2019,
from http://panmore.com/walmart-vision-mission-statement-intensive-generic-strategies
LOMBARDO, J. (2019). Walmart: Organizational Structure &
Organizational Culture. Retrieved March 19, 2019, from
http://panmore.com/walmart-organizational-structure-organizational-culture
Walmart. (2018). Walmart 2018 Annual Report. Retrieved March 19,
2019, from and Issuer Purchases of Equity Securities 31
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