(1) There are long standing disagreement between the employees and the management on the issue of health benefits, wages, hours worked and labour.
(2) Opposition from the society i.e. community, banks, leaders and Unions is also existent.
(3) Issues relating to low product quality
(4) In the lower level strata of employees, unskilled personnel have been deployed.
(5) Absence of Product differentiation - a key contributor of profits
(6) A lot of product substitutes are marring exclusivity.
(7) Greater awareness amongst Walmart customers regarding the negative impact the Company has on the economy.
(8) The company imports more than 70% of the product from China.
(9) Shopping experience is affected due to congestion in Walmart retail shops thereby rendering it different for customer to move about in the shops.
(10) Increased congestion is taking its toll with a lot of products that are well past their expiry date have not been removed
(11) Pending lawsuits for absence of meal breaks for employees
(12) The only reason people flock Walmart outlets is because of low price and never good quality or customer services.
The symptoms outlined will result in the following problems: Low employee satisfaction will result in negative employee-authority relationship thereby lowering work efficiency, the ongoing societal resistance implies that the company's growth imperatives will be under severe pressure, poor quality products will only help its competitors to surge ahead and customers will lose confidence with the company; presence of untrained workforce imply that quality of services is not up to the mark; absence of differentiated products indicate that the company fails to enjoy a competitive edge over its competitors; market availability of close substitutes indicate that Walmart may suffer from customer loyalty; the rising awareness among customers regarding the pessimistic effects of the company might trigger a majority of them to buy from stores other than Walmart; the statistics that 70% of the products of this company are Chinese supplies implies that country-loyal customer will shift their purchases elsewhere; though huge, the overcrowding in the stores will not go well with many customers with lot of them choosing alternative shops; the confirmation of products lying on shelves beyond their expiry dates may lower customer confidence; pending lawsuits will drive financial losses and strained societal relationship; purchase decision of customers to buy from Walmart due to low price and not quality will propel price sensitive customers to switch loyalty to alternative stores; suboptimal customer services will lend the rivals a competitive edge. (Spotts 2005).
The existent problem in this case have huge financial implications that I will attempt and underline below: The issue of negative employee-authority relationship added with untrained personnel in the company is the cause of real problem. There is an eminent clash between the present and potential customer over a lot of issues. Going forward, this will be negatively viewed by the customer who will gradually desert Walmart and switch over to other stores. This will otherwise imply a deteriorating financial state heading towards a downturn. (Quinn 2000).
Since the society is also against the company signifies that a long struggle lies ahead to be relevant in the market. This is due to the fact that the company is dependent on the community for smooth running. Ongoing upheavals indicate that customers will switch to its rivals over time. Substandard quality of the company indicate that price conscious customers are its only loyal ones who are not drawn by quality. A lot of customers will thus intentionally shun the company for better products getting the slightest chance.
Walmart recruits unskilled staff as they are contented with the remuneration offered. But in the long run the non-availability of quality manpower plus less wages will spell disaster for Walmart. This will lead to poor customer service and absence of motivation among the workforce. There are a number of pending lawsuits and especially the one on allowing meal breaks has caused substantial losses. IT could lead to greater debacle in case riots which the company should immediately look into. The absence of competitive edge in terms of employee implies that its rivals surely have a edge. For any prospective business house, personal selling is adjudged as a vital quality. (Fishman 2006).
Walmart products are not differentiated. This implies that customers do not seek for uniqueness in Walmart and the only draw is the price. It would never be viable for a customer to travel long stretches to zero in a product in Walmart which is available locally. This is the negative as there is nothing typically unique in Walmart which draws a customer except the sole element - i.e. price. Considering other factors to be constant, it can be forecasted that the operation of the company can be stifled in the long run.
Another drawback is that the company is dependent on imports from China. Bulk of the customers have a loyalty feeling for indigenous products and are prepared to shell out more to help local companies. Competitors will start campaigning against Walmart on this issue. Foreign imports hurts local economy and a lot of friction between the company and government is forecast on this issue. Overcrowding in large Walmart stores implies the company might run into serious financial troubles due to customer switching to other stores. The display of expired products on its shelves make the company infamous which is enough to witness customer disloyalty fo Walmart.
In order to tide over the current standoff between the employer and the employee, the following alternatives can be useful; offering wages at par with the competition, better medical services for employees, and bonus for employees working overtime plus other attractive perquisites to the employees.
For handling opposition issues of the society, the following solutions can be conducive- joining hands with society through merger with its rivals and enhancing the quality of its products. And getting hold of the competition which will drive competitors from the market is also required.
In order to improve quality of products the following is required to be implemented- sourcing better quality products from dependable suppliers, and thinking of procuring their products from the local market. To address the shortage of skilled manpower, the Walmart management must embark upon: inducting workforce with required academic qualification, offer appropriate training for employees to accomplish the underlying tasks and inculcate an employee friendly working policy.
The issue of unavailability of differentiated products can be dealt by: ushering a unique branding system and locating better quality products that are differentiated from the product of that of the competitor. The difficulty of availability of close substitutes can be handled by delivering products of finest quality at affordable prices through focussed advertising and guaranteeing that the customers are able to avail quality services from the staff.
In order to generate greater awareness from the customers regarding negative effects of the company can be addressed by a tactical policy of selling local products flanking with the imported products to give room for customer satisfaction and be in good books with the authorities to stay away from interruptions in business. The difficulties of overcrowding can be handled appropriately by permitting sufficient space between the shelves for trolleys to pass and eliminate clutter by removing the products whose expiry date has already passed.
Regarding the numerous lawsuits pending, the same can be addressed through launching a monitoring unit to look into the necessities as mandated under the present law, building a constructive relationship with the employees as well as the society and entrusting experienced lawyers to defend the company in situations where lawsuits are indispensable. The situation of lack of customer loyalty can be surmounted through offering products of better quality at the identical prices that are affordable and also giving them satisfactory customer services.
An urgent need exists for offering competitive remuneration structure for the employees for the reasons cited hereunder: Raising compensation will boost employee morale and help in quality work by the employees. The initiative to generate positive results would lead to higher revenue earning by the company. This will help in tackling the financial loss encountered in giving higher wages. Similarly offering enhanced medical facilities and allied services for employees will help in overall improvement of well-being translating into better revenue earning.
To tackle the disagreement encountered from the society, a permanent solution can be made through overhauling the perception of stores that the general public bears in their minds, ushering in a cordial relationship with the authorities, the community and its own employees. This will help in drawing more customers that will help in augmenting the revenues. Besides, engaging in healthy competition without conspiring to eliminate competition from the market will also augur well with the company.
Although price is an important determinant, quality counts too when customer loyalty is concerned. The company must endeavour to offer quality products while concurrently offering quality products at affordable rates. Products sourced locally can be of better quality compared to imported ones. Following this strategy will imply that the company can win the confidence of customers and also lower the effect of protest from local producers. Inducting skilled employees would translate into enhanced services whereas concurrently imparting training to the existing employees would imply better services.
Higher employee qualification will give a competitive edge to make the company in a better position. Good customer relationship is the bedrock of customer loyalty. Only employees have the capability of wining over and retaining customers. This strategy alongwith enhanced remuneration will help in boosting employee attitude resulting it possible for them to render better services even with lesser supervision. This apart, better working conditions like enhanced medical services and offering overtime compensation for working hours beyond normal duty hours will also be better. (Canals 2000).
The problem of product parity can be tackled through sourcing of unique products either from local markets or international markets. This is crucial as this measure will help in winning customer loyalty when the product quality is superior with affordable prices. Undertaking a unique branding exercise along with improving quality in sale services will rope in more customer and help in their retention as well.
Selecting substitute products that are of better quality having unique features will be a big draw with customers. Launching an aggressive advertisement campaign will help convey the message of negative effects of availability of substitutes. Giving excellent customer service in the form of after sales service will help in winning more customers thereby enabling the company to earn higher revenue and concurrently enhancing the relationship with the society as a whole as the society is regarded as the most important stakeholder in the entire process.
Walmart must be able to associate conductively with the authorities to avoid any confrontations with them as this might harm the business interests of the company. Concurrently, the company should source their products from local markets to iron out their differences with local production companies and patriotic denizens.
Store congestion is another problem which can be handled in a methodical way of reducing clutter and winning customer attention without disturbing the business operations. Shelve decongestion will help in improving the overall monitoring and also guarantee that products which are well beyond their 'Best before' dates are removed forthwith. There must be specialised personnel to ensure that legal provisions are abided and concurrently run the business. The legal department must be revamped to ensure that it has all the defences in addressing the pending lawsuits. The financial losses will be reduced through this measure and help in overall improvement of the image before the public.
Walmart is confronted with a lot of challenges. While some requires immediate action others can be addressed in a gradual manner. The store congestion problem can be handled in phases. But the serious problem of continuous poor societal relationship requires instant action. The implementation plan suggested below if carried out would be sure to generate positive results and would never jeopardize with the objectives of monetary savings of people enabling them to lead a better lifestyle.
To begin with Walmart must solve the pending issues of their employees. Implementation of a higher compensation plan in accordance with the market standards by the Human resource Department is absolutely necessary. Besides, working conditions also need to be improved. Concurrently, the company must iron out the precarious relationship with the authorities and the society since the current condition is terrible and not conducive in case of any business enterprise looking forward to seek an international presence. Addressing these problems would imply adopting an open door policy rendering it simpler for the business to go for an expansion plan.
The company must also undertake a quality check on their products. The company is failing in its standards of offering quality at affordable prices. It should also induct a thoroughly skilled manpower in place. There exists an urgent need to check on this aspect as customers seek quality and employees form the first line of link with customers. The existing employees are badly in need of adequate training.
Promotion of local companies: Walmart must also resort to procuring a sizeable share of their products from local suppliers which will go a long way in improving the present relationship with the society. Simultaneously, Walmart must also sensitize the society regarding the availability of new local products.
The company must also put an end to its practice of launching unhealthy competition with its rivals. Forcing the competitors to leave the market is not the best of the solution which will always make the existing relationship with the society go from bad to worse. The company must overhaul its marketing strategy so that it augurs well with the society and remains peaceful with that of its competitors.
1.Settlement of issues with the employees. Immediate Action. The mission must be completed within one year timeframe. The Human resource Department
2. Improvement of Product quality within the forthcoming 1.5 years. Purchase Deptt
3. Recruit higher qualified employees and impart training to the existing staff. The timeframe for achievement of this measure should be within the next 3 years. Human Resource Deptt.
4. Revamp the purchasing strategy with a view to promoting local companies with the next 3 years. Purchase Deptt.
5. Check up on the relationship with the society. This must be an round the year activity. Overall management.
6. Altering the face of the Company. This must be gradual but should be implemented immediately. The stalls department.
7. Arresting unhealthy competition. This must be effected instantly and give the desired result within six months. Marketing Department.
8. Undertaking of unique branding exercise to check on close substitutes. This should be implemented within a 3 year time span. Production Deptt.
9. Market study : This is a continuous exercise keeping in view that it does not interfere with the other objectives. Marketing Department.
All the above recommendations must be accomplished within the forthcoming 3 years. By adhering to the stated changes a lot of challenges can be addressed in a successful manner.
Canals, J 2000, Managing Corporate Growth, Oxford University Press, New York.
Fishman, C 2006, The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy, 2nd edn, Penguin Press HC, New York.
Quinn, B 2000, How Wal-Mart is destroying America (and the world) and what you can do about it, Ten Speed Press; Rev. & Updated edition, New York.
Spotts, G 2005, Wal-mart: the high cost of low price, The Disinformation Company, New York.