Wal-Mart Opportunities Business Essay Example

The retail industries are the largest industries in the world. In the US there is one million stores with large revenues; in 2011 the total retail sales equaled around 4 trillion dollars. According to the US bureau of labor statistics, in 2010 the retail industry had the largest employee number in the US, which equaled around 14.4 million people employed in this sector. There are many types of retail industries such as types by products. Retail is usually classified by such products as food, hard goods such as electronics, furniture and sporting goods, soft goods or consumables such as clothing, apparel, and other fabrics. They can be defined by the market strategy as department stores are large stores that offer a variety of soft and hard commodities. They can also be defined by demographic retailers that aim at one particular segment.

Description of Retail Industry

The Wal-Mart company became the world’s largest profitable public corporation with annual revenues exceeding 100 billion USD. Wal-Mart is an American multinational company that is operating in 27 countries with 11,000 stores around the world, selling its goods under 55 different brands and names such as in Mexico as Wal-Mart de México Centro America, and in Japan as Seiyu. Wal-Mart is highly successful in its operations and profits in the following markets: the United Kingdom, South America, and China; however, in Germany and South Korea it has no significant success. Wal-Mart has more than 2 million employees in all retail outlets which make it the largest retailer in the world.

Wal-Mart is using the mechanisms of mass distribution to reduce their prices and provide competitive ones. Wal-Mart is selling a variety of mostly grocery and non-grocery products that make it the most popular and largest retail stores in the US. There have been employed 14.4 million people in the US retail industry in 2010. The retail industry is expected to grow in the future by an annually compounded rate of 5% from 2010 to 2015. The most significant retail format commonplaces in the US are Wal-Mart Markets, Supercenters, Discount Stores and walmart.com, which operates online. Wal-Mart offers many groups of products like furniture, food and beverages, household products, electronics, pharmacy items, books, toys and video games, movies, sport and fitness items, clothes and automotive repair parts.

Wal-Mart is a family-owned business controlled by the Walton family, who own 50% of its shares. Wal-Mart is one of the most unique companies having the greatest market capitalization with market value of 244,079.4 million USD in 2013. In 2006, Wal-Mart announced the pilot program to reduce the generic drugs prices at just 4$ per prescription. Most of the low cost items included in the pilot program are imported from India. The program, however, caused a big difference in prices with name-brand drugs. In 2007, Wal-Mart launched the “beta” program of electronic movie downloading service that received high demand in the beginning and discontinued by the end of the same year due to low sales.

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Wal-Mart faced a huge competition; one of its competitors is WinCo Foods and in other operated countries, these are Kmart, Publix, Target, ShopKo and Meijer, the Giant Tiger and Real Canadian Superstore in Canada, Commercial Mexicana, and Soriano in Mexico. Wal-Mart, however, could not operate successfully in Germany and South Korea because of the competition. In 2006, Wal-Mart announced its withdrawal from there and was sold to Metro Company; it later did the same in South Korea by selling 16 outlets to Shinsegae. Wal-Mart continues its operation in the UK market that became their second largest retailer with “Asda.” Wal-Mart struggled to export its brand due to several issues such as culture, market competitions, consumer preferences and political boundaries. The aim of the following research is emphasizing the facts of Wal-Mart opportunity to increase their connection with their international customers, which will enhance the relationship between them.

The higher growth in the retail industry (international growth) helps Wal-Mart reach a wider range of customers and, as a result, this increases their sales and profits; it gained $446,950 million in 2010. And that is also because Wal-Mart offers all types of products, therefore, they deal with a great number of suppliers who provide a huge opportunity to expand. In addition, in this way they can offer high quality and affordable prices to customers.

International growth helps Wal-Mart to understand customer needs and withhold the competition with other retailer by offering a variety of purchasing opportunities like buying through online shop, mobile and in store.

Research Questions

  • I will try to find out the Wal-Mart’s values, objectives and strategic plans for the customers, and define whether Wal-Mart’s customers are aware of them.
  • The main point I will try to look for is the increase sales and opportunities in Wal-Mart. Does it have any effect on employees and customers? I can find this information by doing secondary research like looking through business articles that interviewed Wal-Mart’s employees and customers.
  • Also, I will study the question of whether Wal-Mart revenues are increasing or not. There are different ways I can find that information like comparing the financial results for Wal-Mart over different years.
  • Moreover, I will conduct a research on what media Wal-Mart uses to contact the customers. Also, I will answer the question of whether employees are trained professionally to deal with all types of customers and what the different ways of accomplishing it are. I can find this information by referring to primary research, making a phone interview or sending an email.
  • In addition, I will look for the tools, systems and technologies Wal-Mart uses to meet the customers’ needs.
  • Furthermore, I will research on how many times Wal-Mart does the customer satisfaction surveys yearly. What surveys do they conduct (telephone, front office, email, website)?

Research Plan

I will depend on two types of research, primary and secondary, to find out accurate information.

  • Primary Research

In primary research, I will use many ways to find the correct information such as questionnaires, interviews, direct comments and telephone interviews. I will use questionnaires for different groups of customers to find out their opinion regarding the Wal-Mart opportunity.

  • Secondary Research

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In the secondary research, I will refer to different sources such as journals, online articles, newspapers and trade magazine articles.
Also, I will find the similar useful articles regarding this issue in manufactory sector magazine. These will be Business 2.0, Business Week, and Business Review USA. The main point I will try to find out in the secondary research is how international growth helps Wal-Mart to understand customer needs along with Wall- Mart values, objectives and strategic plans. I will also find out if customers are aware of such.

Answers to the Research Questions

Wal-Mart values, objectives and strategic plans for the customers. One of the key values or beliefs at Wal-Mart is that every consumer should have a chance to enjoy branded products at a cheap price. To the company, enjoying branded products should not be something experienced by the rich in the society. Such value has helped the company attract more and more customers over the years. This value has ensured that the company continues to have a competitive edge compared to other world stores. The main objective of Wal-Mart Company is to ensure people live a good life and save money at the same time. To successfully survive with its values and objectives, Wal-Mart thus adopts different strategic plans ensuring low price. The company has produced strategies such as 40-60 % discounted prices for consumers on good quality brand name products. The company has maintained low cost of operation; it has minimized travelling expenses, importing manufactured products from cheap sources such as China, Bangladesh and India. Other strategies that the company has adopted are low spending on the health care of employees, reduced wages and salaries and denying employees to form or join any labor union. Although some of these strategies have turned out to be double-edged and hurting the organizational name, the company’s profits have always been consistent and it has continued to expand internationally. When a customer visits a shopping store, the customer should find what he or she is looking for and customers usually search for products sold at affordable prices. Many of Wal-Mart customers are aware of the values and objectives. Customers are aware that the company aims at giving them an experience of branded products at discounted or low price. Regarding the strategies used, many customers are not aware of the strategies adopted by the company. What is of importance to many customers is that the store offers the best and most competitive prices in the market.

Does the Increase in Sales and Opportunities in Wal-Mart Affect Employees and Customers?

The increase in sales and opportunities for Wal-Mart Company has been a very controversial issue in America. Despite the increasing sales and opportunities for the company, it has been criticized because of its policies that negatively affect its employees. The company receives critics from many ethicists, groups and labor unions. Many of the critics have reported that despite the fact that the company was named by Fortune the best company in 2003, it continued to adopt policies that appeared to oppress the customers. In 2011, total sales amounted to approximately 4 trillion dollars. Despite such huge sales, the company still offers very low health care services to its employees. The company has also been cited to be among the companies that do not offer a good remuneration to their customers. In fact, approximately 70% of its employees have been said to quit their jobs within the first year of employment. Despite the fact that the company continues to get more opportunities in increasing its store number all over the world, employees seem to be at a disadvantage. The company’s values and objectives of offering low prices on branded products have heightened negative impacts on employees. The company prevails internationally, and the projections are that Wal-Mart will carry on its founding philosophy of saving money and living a better life. It means that employees working at the company will continue to experience poor working conditions and payments.
The increase in sales and opportunities for the Wal-Mart Company has meant something different to the customers. The company appears to work on the utilitarian theory of doing what is right to the majority. Customers visiting the store have continued to experience good quality branded products offered at very low prices. Therefore, it can be said that to Wal-Mart customers, increase in sales and opportunities has resulted to low prices and many discounted products. However, from the side of employees, increase in sales and opportunities for the company has translated to low wages and salaries, poor health care and inadequate time for resting and offs. In fact, the company has been sued severely by its employees for failing to pay overtime, offering inadequate lunch breaks and failing to pay employees for working off the clock.


Do Wal-Mart Revenues Increase or Not?

Wal-Mart continues to experience new opportunities and experiment on new horizons. It enabled the company to serve more than 200 million every week at it has more than 11, 000 retail stores located in 27 different countries. Wal-Mart is one of the largest companies and employers in Canada and America today. Wal-Mart net sale increased by 5 % to reach 466 billion dollars for the fiscal year 2013. The company also returned 13 billion dollars to its shareholders through dividends and share repurchases. Revenue increase for the company is an art that the management of the chain store seems to have mastered. Over the years, the company’s revenue appears to have increased tremendously. In 2010, the net revenue was $ 408.21 billion dollars. In 2011, the net revenue for the company was $ 421.85 and this was a $ 13.64 increase.

In the year ending in January 2012, the company’s net revenue was $ 446.95 billion. Again this was a $ 25.1 billion increase in revenue. For the year ending in January 2013, the total revenue for the company was $ 469.16 billion and again this was an increase of $ 22.21 billion. Finally, having a look at the total revenue for the fiscal year ending in January 2014, it indicates that the total revenue for Wal-Mart was $ 476.29 billion and this was also an increase compared to that of the previous year by $ 7.13 billion. Looking at these five year trends for the company, it is apparent that the company’s revenue continues to increase every year. Although many people criticize the strategies used by the company to make a profit, the difference between a performing and under-performing CEO is the ability to make the company profitable. Therefore, the management at Wal-Mart can only be described as performing. Despite the harsh economic turmoil the world is going through, the company has proved very profitable for the last five years.

Media Used by Wal-Mart to Contact Customers. Did Employees Get Trained Professionally to Deal with all Types of Customers with the Different Ways?

Wal-Mart believes in maintaining a close contact with its customers. Social media has thus turned out to be the most effective and efficient media to contact customers. Social media has offered a special opportunity for the company to interact with and contact the customers. Recently, the Wal-Mart Company was ranked as the largest public corporation in the world by the Fortune Magazine. The company has adopted digital communication as the main media of maintaining a close contact with the customers. The Wal-Mart’s digital communication personnel have two major responsibilities. First, the digital communication team responsible for contacting customer is tasked with the role of ensuring that customers and potential customers are made aware that the store has the lowest prices in the industry. The team also plays the role of communicating the message that the company has a mission of helping various people in saving money so as to live better lives. The second role assigned to the digital communication team is to protect, enhance and defend Wal-Mart’s reputation.

The major media sources used by the company in its digital communication are Facebook, Twitter, Google +, and Pinterest. In ensuring close contact with the customers through Facebook, Wal-Mart has put up a huge effort in developing its Facebook presence. The company has embraced the Facebook timeline to depict how the brand has grown over the years. The company has populated its Facebook timeline with images for almost every year since it started operations in 1962. Through this media, Wal-Mart has been able to contact its customers worldwide. On their Twitter handle, Wal-Mart uses this media as a platform to pose or ask questions to customers as a means of ensuring close contact. Questions include topics on sports, requests for re-tweets and caption contests if followers agree with the posts. Wal-Mart values the significance of using Twitter to contact its customers rather than just using it as a means of marketing. The company has managed to clock up a lot of followers. The company has two Pinterest accounts. One of the accounts aims at product ideas and the second aims to promote green living. Taking into consideration the challenges that come along with social media as means of contact, the company has established engagement guidelines within all these means of media. These guidelines form a part of what can be observed to be a training of how the digital team employees should deal with customers. For example, some of the guidelines beg the staff to be polite and courteous when contacting customers through these media. The guideline on being polite and courteous requires that employees to restrain from excessive name use, avoid discriminatory epithets, bullying, and sexual harassment. These aspects of the guidelines form a part of the training the employees receive when dealing with different customers.

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Type of Tools, Systems and Technologies Used by Wal-Mart to Meet the Customer Needs

Wal-Mart mainly focuses on mobile tools in meeting customer needs. When Sam Walton established the chain in 1962, he believed in an empire that could provide value for customers and empower employees. He established a culture of obtaining the most important information about clients’ wants. The result has been that Wal-Mart operation turned to be speedy and convenient. It has been contributed greatly by the mobile tools, systems and technologies adopted by the company to meet the needs of the customers. The use of IT/Information Technology has been a building block for Wal-Mart’s growth. Some years ago, Wal-Mart trailed K-Mart, which could negotiate lower wholesale prices as a result of its size. As part of the company’s strategy to catch up, the company came up with a point-of-sale system. Point-of-sale system was a computerized system that identified each item sold. The technology could then find the item’s price in a computerized database and create an accurate sales receipt for the client. The technology was also capable of storing this item by item sales info for use in analyzing sales and reordering inventory. Additionally, this technology system helps the company avoid issues of overstocking. The system enables the reordering of products that are selling fast and this creates convenience for customers. Wal-Mart distribution and inventory system is among the best worldwide, and this creates great convenience to the customers.

Wal-Mart makes use of telecommunications to connect directly from its central computer system to all its stores and to its suppliers’ computers through that system. The system allows automatic reordering and coordination. The system can exactly know what is being sold and what is out of stock. The company has computerized its warehouse and a lot of products never sit on the shelf. Only 10 % of the floor at Wal-Mart stores acts as an inventory area in comparison to 25 % for the industry. Another technology used by Wal-Mart is the barcode scanner. The barcode scanner makes the sales information available to the main computer system for reordering and analysis.

How Many Times Does Wal-Mart Do the Consumer Satisfaction Survey Yearly?

Every company today has a customer satisfaction survey and Wal-Mart has not been left behind in this new area. For Wal-Mart, any customer can take a customer satisfaction survey at any time on their website www.survey.walmart.com. On this website customers can give their feedback on their recent shopping experience. Since they conduct a survey online, customers can take it voluntarily any time they want. To entice or make the customers take the online survey, customers enter a sweepstake and one can win a $ 1, 000 Wal-Mart gift cards. Customers enter valuable feedback that helps the company improve the customer service and products. For the customer to take up the survey, one must be a legal resident of United States of America and have attained 18 years or older. Devices must be internet-enabled for customers to access the services and complete the survey. They also provide further instructions on how to participate in the survey.

Analysis of the Questionnaire Results

From the results gathered from the questionnaires, 7 customers reported that they visit Wal-Mart on a weekly basis, 8 of them do so on a daily basis and 5 of them visit it on a monthly basis.

  • Regarding the design of the store, 14 customers reported positively on the design of the store and only 6 customers said that they did not like the designing of Wal-Mart stores.
    Pie chart showing customer attitude towards the design of the store
  • Reporting on the atmosphere of the stores, 13 customers said that it was convenient and this was mainly because of the tools, systems and technologies used by the company to meet the customer’s needs. 5 customers reported that the atmosphere at Wal-Mart stores was acceptable and 2 customers reported that they thought the stores were overcrowded.
  • Reporting on the feelings about the display of items, 15 customers said that they felt that the display of items had a high quality. Only 5 customers thought that the display of items did not have a quality.
  • Rating the customer service at the store, 15 customers rated the service as excellent, 4 as good and only 1 rated the customer service as bad.
  • On whether Wal-Mart provides products that suit customers’ lifestyles, 18 customers said yes and only 2 said some products did not fit their lifestyle.
  • On whether the customer has visited the Wal-Mart’s website, 17 customers said yes and only 3 had not visited the website. Those who visited the website reported that they also took the customer satisfaction survey.
  • On whether the website displayed all the products from the store, 15 said yes and 5 said no. In addition to this, 15 of the customers who visited the company’s website said that the display of the products was attractive. Five did not visit the website and thus they did not comment on the display of the products on the website.
  • 14 customers reported that they could locate Wal-Mart’s shops with ease. However, 6 customers said they could not find Wal-Mart shops easily.
    Reporting on the refund policy, 9 customers said that the policy was clear and 11 customers that that they were not fully aware of the refund policy of the Wal-Mart stores.
  • 19 customers reported that the labels and prices on the items sold at Wal-Mart helped them make a decision. Only 1 customer felt that the item description labels and prices helped him make a decision.

Additional Questionnaire

The following is an additional questionnaire in which 20 more different customers have been surveyed. The questionnaire aimed at collecting both the quantitative and qualitative data. The questionnaire had a total of three questions.

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    Do you think Wal-Mart Company has what it takes to be a leading retail outlet?

Out of the 20 customers surveyed with this question, 16 customers said that Wal-Mart had all the components or the characteristics of the world retail outlet. These customers went ahead to give some of the reasons that made them believe that Wal-Mart was a unique retail outlet. Something that stands out for Wal-Mart is that customers know that the company has been ranked as the best company by the Fortune Magazine. It is one element that has made several customers believe that indeed the company has the qualities of a world class retail outlet. 3 out of the 20 customers who responded to this question agreed that Wal-Mart is a world class retail outlet. They said that the company sells branded products at very competitive prices compared to those of the major competitors. The customer believes that a world class retail outlet should be in a position to offer such prices to the customers. One of the customers who responded to this question said that he was not sure of where to place Wal-Mart. From the response of the customers, it is clear that Wal-Mart is a unique company that has the potential of growing every dawn. The confidence that customers have about the company indicates that Wal-Mart has the potential to thrive in every corner of the world.

  • Do you think the strategies used by Wal-Mart to achieve its objectives of offering competitive prices in comparison to its competitors in the market are appropriate?

Out of 20 respondents, 9 of them were aware of the strategies used by Wal-Mart. They were able to highlight cheap sourcing of cheap products from countries like China, India and Bangladesh. 9 respondents seemed to approve these strategies. They reported that, Wal-Mart brands most of the products and its products are of good quality. However, 6 respondents seemed to be not very sure of whether the strategies adopted by Wal-Mart were appropriate. They cited some complaints stated by labor unions and ethicists that Wal-Mart exploits its employees in the name of offering low prices to customers. It made the customers not very sure of whether Wal-Mart strategies were appropriate. 5 of the respondents were not aware of the strategies used by the company to offer low prices. However, they said that Wal-Mart was the best retail outlet of all times. From the response of the customers, it can be seen that if customers are getting satisfied with the commodities that the company offers, then the strategies used by the company are not very important. Customers will always be cautious about the value of their money and the products that they are getting in return. Customers will not care where the products come from as all the products are genuine, of good quality, and following the international standards.

  • Have you ever bought a defective product or produce and claimed a refund? What was the company’s reaction?

Out of 20 respondents, only 2 customers reported having bought defective products from the company. One of the customers had bought a washing machine which broke down within the first week of use. The customer reported that the company was very apologetic of the incident and that it replaced the washing machine with a new one. The second customer said that he bought a Sony Home Theatre, but reached home only to note that one of its speakers was not functioning. Just like in the first customer’s case, the company’s department responsible for the customer complaints was very apologetic and a new fully functioning Home Theatre was given to the customer. 18 customers reported that they had never encountered a case of a defective product. From this response from the customers, it can be identified that Wal-Mart is a retail store that is concerned with the happiness of its customers. The company will go to a great extent to ensure that customers live a happy life just like the company’s slogan attests.

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