Corporate Strategy Analysis Of Wal-Mart: Low Cost Pricing Strategy

Evaluating corporate strategy

Develop an integrated analysis of the corporate strategy of your current workplace organization, a previous employer, or an organization you would like to work for. Reach out to your instructor early in the week (or earlier in the course) if you need assistance identifying a suitable organization for your final study. You can pick an organization.

The organization selected here is Wal-Mart. The brand is following a low cost corporate pricing strategy.

 A low cost strategy would enable the business organization to attract potential customers towards the brand. As such, it is essential that the quality of the products is not compromised in any manner. In this regard, it can be said that the low cost strategy have been essential for the brand to explore newer markets in domestically as well as internationally. According to Bettis et al. (2015), the brand has been using this strategy to penetrate newer markets, which is previously occupied by other brands. The low cost strategy has been essential for the brand to gain consumer loyalty as well as creating a positive consumer perception on the consumers. The low cost strategy has been essential for the brand in other aspects as well. Desbordes and Richelieu (2012) mentioned that the economic condition of a particular place would not be a determinate factor on the sales revenue or the business sustainability of a place.

The corporate strategy would also have an essential impact on the business operational as well as the marketing policies of a business organization. Thus, it can be said that the low cost strategy has been essential for the brand to gain a sustainable market share in the International market. According to Eden and Ackermann (2013), the retail industry has responded positively to a low cost price strategy. Therefore , the low cost strategy have been implemented in the business organization after ensuring that this would not lead to the financial losses of the business organization . 

Fernie and Sparks (2014) mentioned that the corporate strategy has been formed after considering certain attributes like the market demand, the intensity of market competition as well as the presence of the substitute products in the a market . In addition, the scale of operations of the company and the nature of the product or the service line in which the company is operating is essential to the annual business performance of the business enterprise. Therefore, it can be said that the corporate strategy has been essential to the success of the business enterprise in the International market. In this regard, it can be said that Wal-Mart has strictly adhered rto the low-cost strategy of the business enterprise. According to Gamble and Thompson (2014),   Wal-Mart has recruited experienced professionals to assist the business enterprise form pertinent marketing strategies to assist the brand gain a leading position in the retail industry of the United States of America.

Corporate Strategy establishment

The corporate strategy has been an essential factor to the marketing and the operational policies of the business enterprise. Grabara (2013) mentioned that the low cost strategy has been essential to the success of the business enterprise in the global market. As such, this has increased the visibility of the brand in the International market. The Low cost strategy has been promoted well by the brand to attract potential customers to the brand. Hill et al.(2014) mentioned  that discounted rates have been offered to loyal customers who have not diverted to the other retail brands in the International market. Besides this, discounted rates have been offered to consumers during the specific seasons of the year. Thus, the brand did not feel the lack of any sales revenue in any time during this period of the year.

 The brand followed a fixed pattern in formulating the low cost strategy of the business enterprise. Hitt et al.(2012) stated that  there was clear communication from the top management of the company to assist the business enterprise in framing the operational policies. Wal-Mart operates a wide range of retail services to the buyers. Thus, the low cost strategy has been implemented after considering the wide range of products and services in the business organization.

The management of the business organization has played an essential role to the success of the business organization. Hollensen (2015) mentioned that the management have decided the financial policies of different products implemented in the business organization. Thus, the management of the business organization have decided upon the distribution policies followed by the business enterprise. In this regard, it can be stated that the potent distribution channels have been created by the business organization to minimize the wastage of time and resources.

According to Pearce and Schänzel (2013), Wal-Mart has the necessary financial resources to assist the business enterprise to implement such alterations in the business policies of the state. In addition, the initial operational costs  shall  have  to  considered  in fixing  the required  budget of  the  business  organization .

 As such, the firm has the financial resources to bear the operational costs of the firm. Wal-Mart has a progressive working culture to facilitate the management of the business organization to implement the required changes in the operational costs of the firm. In this regard, it can be said that the human resource department has developed essential human resource policies to enable the business organization to cope with such changes in the organization (Purce 2014).  Therefore, the business organization has provided adequate training to the employees of the business organization to adapt to the structural changes in the business organization. Proper IT – enabled training are also offered to the employees of the business organization to enhance the productivity of the business organization.

Corporate strategy implementation

Philip (2016) mentioned that the financial department has been a large contributor towards implementing such changes in the business organization. Thus, certain expenses were set aside for the implementation of the low cost strategy. The low cost strategy would incur certain expenses for the firm. Thus, financial measures shall also be implemented would assist the business organization to reduce the production expenses for the firm (Fernie and Sparks, 2014). This ensured that there would be no interruption in the daily business functionalities of an entity.

Prayag et al. (2013) mentioned that there were clear communication channels in the business organization to facilitate the adoption of the low cost strategy that would strengthen the financial position of a business enterprise . Therefore, full support from the management of the business organization would be of pertinent assistance to the middle ranked employees of the organization. In the case of Walmart a pre-determined plan was to be made execute the changes in the business organization (Fernie and Sparks 2014),  Thus, the business functionalities would be aligned with the long term goals and objectives in the organization. Eden an Ackermann (2013) mentioned that In Wal-Mart, different groups would be formed as per the expertise. Thus, the marketing, finance, operations as well as the human resource initiatives of the brand shall be   coordinated in an organized manner.

 Thus, the implementation of the corporate strategy of the business organization would be attained through the coordination of the different departments of the place (Fernie  and Sparks 2014). However, all these activities shall be implemented in a structured manner to reduce the wastage of unnecessary resource of the business enterprise.

The following are the essential recommendations that can be made to assist Wal-Mart in achieving business prosperity and growth.

 Evaluating the market demand – Evaluating the market demand of retail entities is essential to the implementation of a low cost strategy. According to Rothaermel (2015), a greater market demand shall enable the business enterprise to avail the benefit of a low cost marketing strategy. In this regard, it can be said that the market demand of goods would facilitate the sales revenue as well as the profitability of a business enterprise. Therefore, it becomes necessary to respond adequately to the consumer demand of retail items in the country. Slack (2015) mentioned that a low cost price strategy would assist the business enterprise to reach a maximum number of consumers within a limited period. The low cost strategy would also enable the business entity to penetrate new markets, if there is a demand for retail items in that specific region.

Recommendations

A fixed budget – Preparing a fixed budget is essential to the development of the low cost pricing strategy. As such, the organization needs to be clear about the expense that i s going to be incurred due to the adoption of the low cost pricing strategy. This would help the business organization to be clear about the pricing strategy that is being followed and its necessary implications. According to Teller and Thomson (2012), there should not be any uncertainty regarding the budget structure and the available cash funds that is present in the organization. Therefore, without a pertinent financial plan, the brand would not be able to gain the benefits of the low cost strategy adopted by the business organization.

Pricing strategy of competitive rivals – The pricing strategy adopted by the rivals in the market should be analyzed to adopt a profitable pricing structure in the business organization. In this process necessary changes shall be made in the in response tto the pricing strategies adopted by the business organization. According to Purce (2014)., the pricing strategy followed by the rivals in the market is of primary concern to the business entity.  Thus, the pricing policies of  the  rival  entities  in  the  market  should  be   analyzed , in  setting  a   low price  strategy for  the  rivals  in  the  global   market.

Judging consumer preferences – judging the consumer preferences would be a necessary part of the implementation of the low-cost procedure that would give essential financial benefits to the business organization. He and Balmer (2013) mentioned that without adopting an effective knowledge of the existing trends in the market as well as the consumer needs and wants it would not be appropriate to adopt the low cost strategy. In the case of Walmart it is essential that the management of the organization has intrinsic knowledge of the market demand as well as the consumers to execute a superior low cost strategy for the business enterprise. The brand has been able to judge consumer demand adequately and present an distinctive low cost strategy that has created a positive perception on the consumers,

Conclusion      

 It can be stated that Wal-Mart  has availed a lot of benefits due to the implementation of the low cost pricing strategy in the  domestic as  well as  the  International market.   Thus, the retail entity needs to retain its existing pricing structure to facilitate organizational growth. In addition, the retail business organization has been able to maximize its sales revenue as well as the levels of profitability.  As such, it can be said that the low cost strategy has been effective for Wal-Mart to exhibit the necessary awareness about the market changes in the retail industry of US.  Besides this, the changes in the financial structure of a business enterprise would have to be taken into the account before making any alterations in the low cost pricing strategy. Therefore pertinent decisions that have to be made would have to consider such characteristics that can have a long term affect on the financial as well as the market position of Wal-Mart. 

References  

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