Wal Mart And The Demography Factor ManagementEssay

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The first Wal-Mart store was opened by Sam Walton in 1962. Today we can count 894 stores all overUnited States which offers to customers’ pleasant and convenient shopping experience. Each single storeemploys about 225 associates. The store is well feature wide, clean, brightly-lit aisles and shelves stockedwith a variety of quality, value-priced general merchandise such as: Health and beauty aids, automotiveproduct, house wares, lawn and gardens items, toys, sporting goods, pet supplies, etc....

In 1988, Wal-Mart developed supercenters to meet the growing demand for convenient. One stop familyshopping featuring their famous Every Day Low Prices. This stores save customers time and money asthey have combined full of grocery and their range of merchandise under one single roof. Thosesupercenters are nationwide and most of them are 24hours opened. In there we can found: bakery goods,meat and dairy products, deli foods, frozen foods, condiments and spices, household supplies andbeverages. Most of those supercenters have specialist shops such as vision centres, health clinics, tireand lube express, hair salons, brand name fast-food restaurants, etc...

In 2008, Wal-Mart developed a new concept, the market-side stores. This is a small community pilotgrocery store specializing in fresh meats at a good price for customers. They provide a fresh andexpedient shopping experience for busy people who fancy an easy respond to the question, 'What's fordinner?

Internal Factors

I-Wal-Mart mission:

II-Wal-Mart Objective:

Wal-Mart objective have always been to serve customers with the quality products and save them moneyby providing them goods and services at low prices. This is in order to lower the living costs of every singleperson.

Sam Walton said: “If we work together, we’ll lower the cost of living for everyone…we’ll give the world anopportunity to see what it’s like to save and have a better life.”

Environmental goals:

Wal-Mart has also environmental goals:

They are seeking to be supplied 100 percent by renewable energy

To create zero waste

To sell products those uphold resources and the environment.

Another goal of Wal-Mart is to increase the sale of products by the double which are helping homes andconsumers to become more as energy efficient then they use to be.

III- Wal-Mart Culture:

Wal-Mart is not only known for saving customers money and cutting on their expenses. They are alsoknown for their unique culture that Sam Walton built on the cooperation with moral and values.

Respect:

One of the basic value and customs is the Respect. Respect for customers, associates, suppliers andcolleagues. It is helpful to built relationship with the community they are serving and living within.

Open door:

At Wal-Mart managers and associates believes that an open communication is the secret of servingcustomers needs at it best.

Team Work:

The Wal-Mart founder believes in team work as a best way to gain power as the stores are growing. Theteamwork philosophy has become more important over years.

Wal-Mart cheers:

Perceived as a part of Wal-Mart culture, the Cheer is a way to show they are proud. The cheer is takingseriously by employees and managers at Wal-Mart.

Servant leadership:

Sam believes at the fact that managers do not only manage behind their desks. They should be involved inevery single task and interfere with employees in a good way.

"It's more important than ever that we develop leaders who are servants, who listen to their partners – theirassociates – in a way that creates wonderful morale to help the whole team accomplish an overall goal.”Sam said.

IV-SWOT ANALYSIS:

Strengths:

One of the main strengths is that Wal-Mart is benefiting from economies of scale which enables them tohave cost advantages over their main rivals and competitors (Kmart, Safeway, Target…). Wal-Mart is alsoknown for its customer service. They have a good reputation in terms of dealing with customers andproviding them with better service and listening to their concerns.

Another strength which Wal-Mart has gained over the years is the strong brand name that have beenestablished and kept. Wal-Mart is nowadays known internationally it’s not anymore seen as a nationalAmerican brand.

Wal-Mart strategy and objectives was to provide customers with not only quality goods but also with thelow prices possible. This has helped them to create a pricing advantage over its rivals. They made thembe ahead of the list and therefore gained a higher market share due to the increase of sales that they havebeen occurring over the years.

Weaknesses;

One of weaknesses that Wal-Mart have is been Anti-Union. Not agreeing for its employees to have a unionis making the image of Wal-Mart fall down in terms of employee caring and right.

Wal-Mart has been criticized for creating major problems relating to full time jobs and creatingunemployment is some of regions where stores have been allocated and opened. These have played abig role in damaging a part of their reputation.

Opportunities:

Nowadays, we are facing an increase in the e-commerce sector. Wal-Mart need to take advantage of thisand try to increase its online sales by facilitating it more and improve its online service. And therefore bydoing this they could also be targeting and sibling a new market and customers. Thus increase marketshare.

The falling of some of the trade barriers can be an opportunity for Wal-Mart to increase its foreign directinvestment (FDI) and expand its brand name abroad by entering new markets and satisfy that specificmarket demand.

Another way of expanding and which is an opportunity for Wal-Mart is to take over competitors which arenot able to compete with it anymore in other to increase its sales and its opportunity to became bigger andstronger than it is actually. Those competitors are mainly those in some regions where Wal-Mart has beenthe cause of their closure down. Doing this would not only prevent workforce from been laid off but it willcreate a good image for the company as it would be considered as the “Job Saver”

Threats:

Wal-Mart is operating in a sector where there is a fierce entry of new competitors to the market whichmight be threaten Wal-Mart by taking their customers and providing them with better quality products andlow prices compare to Wal-Mart. However they should work on making their customer services the bestavailable in the market as customers do not always look for quality and price but also for customer service.

SWOT Summary:

Strengths

Weaknesses

Economies of scale.

Good Customer service.

Brand Name.

Low prices.

Anti-Union

Known for unemployment problems in some regions.

Opportunities

Threats

E-commerce.

Increase FDI.

Take Over competitors.

New competitors to the market.

External Factors

PESTEL:

PESTEL examine the organization’s environment and how does it affect the organization itself. It standsfor: Political, Economical, Social, Technological, Environmental and Legal.

Political:

Wal-Mart is established in so many different countries (USA, UK, China, Argentina, Brazil, Canada andIndia). Most of those countries are democratic countries in which they believe that every citizen has theright to attend political meeting and vote over a certain age. However China for example is more as aTotalitarian. The government has absolute and centralized control. The political ….Which the country ishave an effect on what type of economy system it is adopting.

Economical:

Any economical problem such as the crisis going on now will affect on a way or another the spending ofconsumers which will reduce a certain consumption of certain goods

However even though there is a crisis consumers still will be consuming basic products and services thatWal-Mart are providing and offering at low prices compared to other stores.

Wal-Mart are based more on a market driven economy system with the consumers deciding on theproducts available and needed.

Social:

Wal-Mart is a company which does care about the society. They have established many groups to helppeople such as the military heroes to get degrees and helping those with difficulties with education bygiving donations.

Community and given

“At Wal-Mart, we believe in a philosophy of operating globally and giving back locally. We know we canmake the greatest impact on our communities by supporting causes that are important to our customers’right in their own neighborhoods. We’re proud to be a "store of the community" for all of the communitieswe serve by helping to provide financial and volunteer support to more than 100,000 charitable andcommunity-focused organizations, and by using our locations to provide opportunities for our customersand associates to give back.”

Technological:

Wal-Mart should be updated with all the information system and products systems that enable them tocontrol their level of stock and those technologies at the cashier desk.

Environmental:

Many consumers are now beginning to be more green and try to be more environmental respectful, soWal-Mart might have think to introduce any kind of strategy to show that they do care about environmentsuch as no bags at the cashier desk.

ASDA the Wal-Mart supermarket in UK have been the leader in the supermarkets reduction of packaging.

Legal:

New employment law would affect them. For example, in some stores, Canada for example, workers donot have trade unions to protect their rights, so if a law came out o oblige all companies to do so, Wal-Martwill have to deal with it.

Porter’s five diamonds

Bargaining power of buyer

Wal-Mart customers and buyers do not have the power to bargain as there is a broad base of buyerswhich do not allows single buyers to ask for price reduction. They usually purchase products in smallquantities and they are loyal to certain products brand especially the necessity products.

Bargaining power of supplier:

Suppliers have not much power. They have to ensure a continuous high numbers of sales in order toensure their well being.

Substitute:

Wal-Mart substitute will be small retailers and corner shops which are usually providing to customershigher prices compare to big grocery stores and supermarkets.

Competitive rivalry:

Wal-Mart competitors are numerous (e.g. Kmart, Safeway, Target) either been nationally in USA orinternationally in other countries where they have been a FDI.

In 1993, Wal-Mart had been sued by its competitors and been ordered by the trial court to raise itpharmaceuticals product prices and pay treble damages to three of local competitors which have beenclaimed that prices charged by Wal-Mart for their pharmaceutical products have been lower than the norm.

Potential entrant:

The economy of scale that Wal-Mart and others big supermarkets benefit from is playing an important rolefrom preventing new entrant to enter the market. It acts as a barrier to entry.

Wal-Mart suppliers:

To ensure to their customers that the products offering will meet their needs and wants, Wal-Mart isworking hard to achieve this objective. In order to do that they are partner with thousands of suppliers for,every single merchandise which are ranging: from one person shops to multi-national corporations.

Wal-Mart does not only care about choosing the right supplier which affords them with good qualityproduct but they ensure that they keep the range of supplier as diverse as possible.

There are some examples of Wal-Mart suppliers:

Fair Oaks Farms

B2B Transport Market

TechniSource Services Group

New York Apples Sales

Currently, Wal-Mart is having as a objective to work with suppliers headed for reducing the prices onspecific products with reduce energy use for their customers.

Competitors:

Part II

Wal-Mart and the demography factors:

At Wal-Mart, diversity is taking a big part of their goals and strategies they are aiming to provide theirworkers and associates with the most respectful and valued workplace as possible. They believe that theyare one of the world most diverse employers.

Been diverse company is having impacts on decision making and their strategies especially the onerelated to recruiting employees and workforce. Their recruitment planning is based on many ways andpolicies, one of them is having relationships with organizations which are representing minorities anddifferent races and ethnicity backgrounds which include: African American, American Indian and AlaskaNative, Asian and Pacific Islander, Gay Lesbian Bisexual Transgender (GLBT), Women, Mature andpeople with disabilities.

According to the EEO report (Equal Employment Opportunity commission) on diversity at Wal-Mart stores,in 2007 60.29% of total workforces are women: 29.69% are executive/ senior level managers, 40.36% midlevel managers, 53.45% are professionals and 85.78% are technicians. On the second hand, minorityhave also a place at Wal-Mart with 30.10% been operatives, 39.61 laborers and helpers and 34.18% beenservice workers in the year of 2007. Compare to 2006, the number of minorities working for Wal-Mart hasincreased from 28.15%, 37.73% and 32.91%.

Wal-Mart does not only care about its employee diversity but about its supplier too. Wal-Mart suppliers arecounting to have more than 2.500 minority and women owned business suppliers.

Their aim to have a diverse supplier background has made Wal-Mart to create in 1994 a formal supplierdiversity program which is designed to expand their minority and women owned suppliers (MWBE). Thismade them achieve the current number of MWBEs.

Wal-Mart mission was to increase the amount of business that they are doing with minority ad –women-

owned firms using their scope, scale and leverage to create companies of significant size and statute.

"At Wal-Mart and Sam's Club, our Supplier Diversity program is creating an even more diverse foundationfor our business and helping us to become truly inclusive. By strengthening our relationships with minority-and women-owned companies, we are becoming even more relevant to the customers and members thatwe serve." Mike Duke, Wal-Mart president and CEO

Another demographic factor which is important in Wal-Mart is employees’ status. Most of Wal-Martemployees are part-time workers. This can be explained by the fact that Wal-Mart associates are mainlywomen (60%) either been married and with children, or students. Having a flexible working hours isimportant for them, see crucial. This can explain the hourly wages decreases that Wal-Mart has an effecton it. According to a research done by Dube, Eidlin and Lester in 2007, an entry of ten Wal-Mart stores tothe market cause the fall of the average hour wages by 2 percent.

Wal-Mart operates in a wide base of customers categories. Wal-Mart customers differ from one to another.Been in 11 countries other than USA, make Wal-Mart face a wide range of culture either been religiousbelieve and low to middle income families. Targeting such customers is part of their strategies as their aimgoal and objective is to provide their customers with low prices but still a good quality products.

According to a study conducted by Andrew Franklin in 2000 and an economist at University of Connecticutshowed that the primarily market of Wal-Mart is the poor and working class communities. However due tothe 2001 recession, fancy retailers have noticed that the number of shoppers at Wal-Mart increasesincluding families with an income of $100,000.

In 2003, another study showed that: 23 percent of Wal-Mart customers live on income less than $25,000 ayear, more than 20 percent have no bank account, half of customers are proletarian workers and 20percent are either unemployed or elderly.

According to Horward Davidowitch, the American consumer is in a survival mode right now due to thecrisis going on. They are in $14 trillion debt and with no savings.

Been also a supermarket where high income families are able to shop their groceries, Wal-Mart shouldconsider offering to them a range of products which suits their specific needs. This range of productsshould not be as low prices as the goods currently offered. However this should not only concerned pricesbut qualities too.

High income families have more interest towards healthy products whereas the initial company target ismore toward quantity and price. Therefore Wal-Mart has to consider changing their strategies andproviding them with the right products in order to meet their demand and satisfy their desire.

To sum up, Wal-Mart is taking diversity as a main factor for their success. They are trying to implementingthe external environmental and culture of diverse country been USA or other countries where they are incommission at. As result, Wal-Mart is represented by 60.29% been women in the whole workforce stores.Those workforces are mainly serving poor to mid class income families.

However, besides having positive image concerning ethnicity and diversity of both employees andsuppliers, I urge to Wal-Mart to consider working more on their relationship with employees mostimpotently the one related to labour rights. As seen above, Wal-Mart is Anti-union Corporation. This isseen as a restriction to human and labour rights which is a basic need to every employee.

Been unionize, would give employees the feeling to be cared for and been engaged at work and havingsomeone who is concerned by their matters. They should take into considerations the fact that most ofemployees are women which means families responsibilities what concerns mainly children, therefore

flexible hours and not been kept over their work hours and shifts.

I recommend to Wal-Mart to improve its image and brand name and how it is perceived too. Since, theyhave been accused of discrimination against women in terms of salaries and pay and promotions. Theyhave been facing the largest civil rights class-action suit in the history: Dukes Vs Wal-Mart. Diversity anddiscrimination, doesn’t not stop only at employing women and minorities but how are there spread over thecorporation and how it is treated by their employers.