Strategic objectives form one of the important building blocks of a company’s strategic plan. Strategic objectives denote the activities that an organization must carry out to meet its long-term goals as well as the short term objectives. For every organization whose dealings involve provision of goods and services to customers, it paramount to the profitability of that particular organization to design and implement a logistics and transport strategy (Niven, 2008). The latter plays a primary role in maintain the levels of service delivery at their level best at all the times. In addition, the logistics and transport strategy cushions the business from the unfavorable events that occur in other areas of the organization’s business (Ferrell …show more content…
Due to the efficiency and the cost reduction that come along with the company’s own transport and logistics system, the revenue generation is expected to increase. On the other hand, the operating costs are expected to substantially reduce. Profitability Owing to the operating costs reduction and the increased revenues, the company’s profitability level will definitely increase. In addition, increased market share will lead to higher level of sales and therefore higher profit levels. Competitive position The new division is expected to attend to the needs of the clients through initiatives such as timely delivery of products and delivery of delicate products in good state. The profit gap that exists between poor distribution and logistical operations will offer Wal-Mart a competitive edge through making the operations more efficient. Customer Value Perspective Customer Retention or Turnover To facilitate customer retention, Wal-Mart will ensure timely delivery of goods and therefore, meet the demands of every consumer across the globe. In addition, the division will make the operations more efficient since it will handle the movement of goods. Customer
Rocket-Blast, LLC, a beverage maker, has seen its profit margins reduced which presents a real problem for the company going forward (Precord & Macdonald, nd). Management has decided that operating costs must be reduced in order to increase profit margins to
Walmart 32nd St. strategic planning for the next years is to increase sales for $2 million with a based line of past year sales. Walmart 32nd St. operational plan focuses on implementing Deming’s principles, and its assertion that higher quality leads to higher productivity and lower cost. In addition the implementation of quality management, and the collection of data in order to apply Six Sigma techniques in the work environment. A cause-and effect diagram has been develop to visualize the potential causes that affect the completion of the goal.
With the ability to control its stock and see at a glance how any store is performing, Wal-Mart is able to keep its finger on the pulse of its business and make critical adjustments as necessary. The low transportation costs it achieves with its own transportation system makes it possible to deliver goods to different stores within or under 48 hours, and transportation costs are only 3% of the total costs, as compared with 5% for their competitors ("Wal-Mart 's Supply Chain Management Practices: The Benefits Reaped"). Its advanced methods of transport, This combination of technology and down-home attention to customers as people makes Wal-Mart hard to beat on any soil, and it uses the winning formula to maximum advantage.
Wal-Mart could also chose to operate in dispersed rural locations to thwart competition from discount retailers and hence achieve higher revenue realization. Wal-Mart could also introduce newer product lines including organic food .Wal-Mart also should focus to increase market share in the grocery and vegetable market segment apart from the consumer durable portfolio. Wal-Mart should also focus to achieve higher margin realization by investing in specialty services like pharmacy with special tie-ups with insurance groups for high volume purchases.
Wal-Mart has to implement a number of changes to correct the problems it has created. Attention must be paid to ensure the employee is treated fairly. Other ways must be sought to maintain profit levels and make the stockholders happy.
There are several key competitive edges that keep Wal-Mart successfully maintaining its leading position in the industry. First of all, Wal-Mart’ multiple store formats allows Wal-Mart to extend their customer base. Since Wal-Mart opened its first store in Rogers, Arkansas, July 2 1962, it has extended its store number from 9 stores to a total 4,906 throughout the four types of store: (Discount stores, Supercenters, Sam’s club, and neighborhood markets) Wal-Mart is able to embrace more customers to fulfill all kinds of demand such as live supplies, groceries, pharmaceuticals, and entertainments. As a result, Wal-Mart’s sales and profit increase significantly. Backward expansion strategy is another key for its success. Unlike other retail stores, Wal-Mart opens its stores in small town first before entering into metropolitan area.
Increase in profits- It can lead to increase in the quantity produced, this will increase the revenue earned and consequently the profit will be ploughed back.
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
Walmart’s ownership and execution of the supply chain is a core competency that sets them apart from the competition. They have minimized the turnaround time to replenish inventory back into the stores. They also have agreements with suppliers to deliver products direct to the stores. Walmart owns 158 distribution centers strategically located in close proximity to many Walmart stores. The distribution centers employ 7,000 truck drivers to deliver truckloads of merchandise to the 10,700 retail stores with their tractors and trailers, as the inventory system dictates.
Wal-mart has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management. Discuss in detail the distribution and logistics system adopted by Wal-Mart.
The benefits of these assumptions are that while maintaining the current growth rate of 13%; we can maintain our COGS. One of the major factors contributing to the firm’s poor profit margin is operating expenses.
Wal-mart has a reputation for caring for its customers, of course their employees, and for the prospective public. So Wal-Mart can be an industrial leader for the world of shoppers with an eye for lower affordable prices, company decision makers would continue it's systematic strategies that it's founder and president established years ago. Sam Walton believed in three guiding principles in his strategy planning they were to provide the customer with good value and service, to have a good relationship with its associates, and to be involved with the community.
Every company has some kind of Revenue and they all have costs that are associated with running the company. It is also true that if a company wants to increase their Revenue, their costs will increase too. It is every company’s goal to maximize revenue and either through Production or Services, and minimize cost. These things are easy to figure out, but actually identifying the production and figuring out how it will increase or decrease with change is very difficult.
Wal-Mart Stores, Inc. is a renowned retail goods superstore that sits atop the Fortune list at number one. It would be very difficult to find an individual who is unaware of Walmart’s position as the largest brick-and-mortar retail chain in the world. The company has thrived over the past few years and is continuing to grow by effectively managing its store operations and distribution strategies. One of the major contributors to the business consistently meeting market expectations is directly attributable to their management approach. Walmart has revolutionized the way retail companies manage their supply chains in more ways than one. But, perhaps the most revolutionary was the practice of unprecedented coordination with suppliers (Chekwa,
From the manufacturers’ warehouse to the shelves, the business must orchestrate a symphony of the right products to the right places at the right times. Walmart serves customers and members more than 200 million times per week in retail outlets, online and on mobile devices. The company is able to offer a vast range of products at the lowest costs in the shortest possible time (Chandran, 2001). The main reason for this incredible growth of Walmart is because its distribution centers are highly automated.