Investigation and Analysis of Walmart (Essay Sample)

Investigation and analysis of Walmart
Dennice Anyona
Walmart organization
History and the size of Walmart
Among the world’s largest retailers is Wal-Mart Company, which was started in 1962 and based in the United States of America and now operates many international outlets in various countries. By this time discounts retail industry was already competitive as there were other three companies that sprung up the same year. In every Wal-Mart in the neighborhood, one cannot miss products like household supplies, beauty products, all kinds of groceries, cellphone stores, pharmacy products as well as bakery and dairy products among others. Currently, this company operates about 10526 stores as well as clubs with over 2.3 million employees (Brett Caraway, 2018, p. 7). In the United States of America alone, about 1.6 million employees are working for this company under Doug McMillon as the CEO since 2014. For the USA stores, which are about 187000 square feet large each, Wal-Mart is doing a great job in considering the minority groups with 37% of the people of color and 57% of women in the managerial positions. However, in the lower positions, there are considerably more men as compared to women.
The organizational structure of Wal-Mart
Wal-Mart employs a matrix organizational structure, where there is a multiple reporting relationship allowing some managers to report to two superior leaderships. This means that there are different levels of management within the organization such as the international management and local/domestic management (Dudovskiy, 2019). On top of this, the business structure of Wal-Mart is divided into three major sections such as logistics, real estate and store operations, which are all headed by different executives. For this structure, there is a clear flow of command form the top to bottom in various departments. This strategy is very significant to facilitate a good relationship between the principle executive and the customers.
Of the three divisions, there is the Walmart U.S, which is headed by the president and CEO John Furner. The CEO is responsible to managing all the operations carried out by Walmart in the country. Furthermore, he ensures that a good relationship is maintained at all levels of the company. Additionally, the second division is the Walmart international led by president and CEO Judith McKenna. This leader is responsible for maintaining all the stores that are not within the USA (Riggio, 2017, p. 457-477). Finally, the third division, Sam’s club, is under the leadership of Kathryn McLay as the president and the CEO. Kathryn is in charge of maintaining the warehouses located in different locations and ensure that products are supplied to all Walmart stores within required time that enhances high customer satisfaction. Besides the three divisions, there is ecommerce and technology division in U.S headed by Marc Lore as the president and CEO. All these four leaders are under the leadership of the overall CEO, Dough McMillon and are accountable as well as answerable to him for all their operations.
The hierarchical structure adopted by Walmart places power at the disposal of the CEO. This function-based structure provides a vertical chain of authority throughout the organization. This is vividly clear case as all the departments are headed by CEOs who give directions to the subordinate staff controlling employees under the CEO ("Walmart: Love, earth®," 2017, p. 63). This structure ensure that that it is the executive that make and implement decisions with the help of the middle managers. The functional aspect of this structure ensures that all the employees at the lower levels are grouped depending on their functions. For this reason, at each division there are human resource department (responsible for employing, training and managing employees), IT department (mandated to install and manage all computer networks), marketing and finance department, which are responsible for creating brand awareness and managing financial decision and managements respectively). Within these departments, managers are primarily responsible for the functions of their departments bringing about effective control of various functions.
For instance, at the store level, bellow is the organizational hierarchy structure that points out that managers are key members of every department and their functions. The manger leads while co-manager follows ("Working in Walmart, Kunming: Technology, outsourcing, and retail globalization," 2019, p. 193). Bellow the co-manager, there are support managers, cashiers, customer’s care supervisors, and many more. In many of the Walmart stores, these are hourly working employees. This organizational structure has been good and worked in the favor of Walmart following the fact that it is the suitable one to address the great size of this organization.
Ownership
As stated in the beginning, Wal-Mart is the largest private company in the world owned by Walton family. The company was started by persona investment funds after Sam sold his property to acquire funds for starting the business. Currently, the family holds 50.85% of the entire shares of this company, making it the largest shareholder and the one at the center of all decision-making activities ("Our Walmart," 2018, p. 252). However, there is a board of directors comprising of the key management form the executive level, especially the CEOs. The company was incorporated in Delaware in 1969 and acquired a certificate. On the side of shareholding split, the company has had 11 two-for-one stock split with the first one distributed in 1971 when it traded at $47 for every share. The mission statement of Walmart is “Helping people around the world save money and live better- anytime and anywhere- in retail stores and through ecommerce.”
Organizational structure
For the management of an organization to understand the kind of environment in which the business operates, it is always very vital to carry out environmental analysis such as SWOT and PEST. Form the SWOT, the managers can determine the strengths and the opportunities to take advantage of as well as weakness and threats to beat through strategic planning. For PEST, just like SWOT, managers get to understand the external influences to the business operations thus, vital for strategic decision-making.
SWOT analysis of Wal-Mart
Strengths- for the years Wal-Mart has been in operation, it has managed to be the largest retailer in the entire world. Considering revenue of $559.151 billion in 2021, and the number of employees reaching to 2.3 million, it is still the global leader. In this industry, there is no any other company except Walmart and Amazon that has been listen in by Forbes. Because if this, Walmart can share a fixed cost for many products making the company a cheaper shopping destination. Furthermore, the company gains a market power over suppliers and distributers and can also use its resources such as information systems and distribution facilities effectively over a wide range of locations.
Weakness- following the reduced selling prizes at Walmart, the company is commanding thin profit margins making the company to depend of sales volume for a meaningful profit (Rowland, 2019). The fact that the company is using a cost leadership strategy makes it easy to copy as the company lacks a reasonable competitive differentiators.
Opportunity- Walmart is a big company and has grown tremendously over the years. This presents an opportunity for the company to extend to any developing economies very easily as it is well-known and trusted ("Made in China: Work and wages in Walmart supplier factories," 2019, p. 79).
Threats- currently, many people are more concerned with healthy lifestyle, which has apparently poses threats to Walmart as many of its products are perceived unhealthy because they are not natural products (Tan, Yan, Chen, & Liu, 2018, p. 179). Out of this threat, an opportunity is presented for the company to consider improving the quality standard of its products.
PEST analysis of Walmart
Other external factors affecting the operation of this co