University Of Business and Technology

Walmart

Warehousing Management SCM 352(1)

Ayah Fatta

Sa5038
 Walmart enterprise is US-based multinational retail and a public company that runs a
chain of hypermarkets and grocery stores in the global market. “Helping people around the
world save money and live better – anytime and anywhere – in retail stores and through e-
commerce” is the mission statement of this organization. The company was incorporated in
1962 by Sam Walton, and its main offices are located in Bentonville city, in the state of
Arkansas, United States. The entity has outlets in more than twenty-four nations in the world
(Zieger, 2011). As reported by the company's accounting division, the company's annual
revenues in the financial year 2021 were at $560billion. Walmart's operations are far much
spread globally, having an estimated 2 million employees worldwide and 1.6 million in the
United States alone as per 2020 records (McGee, 2020). This essay is going to venture into
various aspects of business operations surrounding the Walmart company business
operations.

Walmart has taken perfect business initiatives to develop its brand to the extent that it
is known and felt by a million customers in the world. The strengths that promote the
company’s recognition and sustainability in the business are the propelling factors. Unlimited
variety of products with recognizable brands in all sectors of the Products-There are more
than 61 million goods accessible from Walmart's online purchasing store (Jindal et al., 2021).
The company is continually achieving global advancement with clear cases of new locations
venture leading to an international presence, as indicated by Mun, 2021. The company
opened 48 new outlets in Central America, 16 in Chile, 10 in the United Kingdom, and 5 in
China in 2017. Further, the entity's relatively low prices compare to others win a big
proportion of the global market customers since most are of average income. The company's
procurement and Human Resource management are professionally and digitally managed
(Mun, 2021).

Despite enjoying the great sales promoted by the strengths, the company meets some
daily business challenges too. Several instances of lawsuits due to the poor working
environment, poor salaries, and neglected healthcare have often faced the company's
management (Mun, 2021). Due to the fair prices of the products available for sale in Walmart
stores, the profit margin is considerably very low hence a limitation to attaining higher levels
of revenue. The company employs a cost leadership strategy. Gender segregation is not an
exemption in Walmart. In 2007, a lawsuit was filed in US federal court against Walmart,
purporting that female employees are discriminated against and taken advantage of in
exchange for bonuses and promotion (Kampf, 2007). Due to the firm's vast size in all the
locations of the world, loopholes in management are inevitable challenges. Finally, the
uniqueness of the Walmart brand is not very profound. Imitation and breaking the originality
of their marketable goods is an easy task for other businesses with a similar line of operation.
The company does not possess a distinctive competitive line over its competitors, and this
reduces the sale efficiency of its products (Velez, 2020).

Walmart is the definition of how to use supply chain management to cut costs and
improve the consumer experience. In addition, it's difficult to think of any firm that manages
inventories and produces revenue in the same way that Walmart does. Walmart has utilized
technology and automation, innovating its supply chain so that they can manage inventory
and refill inventory effortlessly. Further, Walmart company is not limited to growth
opportunities. Despite being an international enterprise, the outlets of Walmart’s business are
yet to land in some global markets. This is an opportunity for the firm to extend bigger and
establish its brand to all prospective consumers in every corner of the globe. Such locations
that are yet to experience Walmart's impact are; China, Latin America, and Middle East
nations (Velez, 2020). Walmart is well placed to buy, merge and form joint ventures with
other upcoming enterprises due to its already strong brand. Also, working to bring forth a
better managed human resource unit is a great chance for the company to venture. From the
production and sale law, low-priced products reflect low-quality raw materials. Most of
Walmart's products are cheaply sold, insinuating that they are of low quality. This is an area
the enterprise can develop to develop high-quality products to show health concerns to the
customers.

Controversial product selling activity is the main threat in Walmart stores. In 2017,
the company was taken to bars for arguably selling a fake beer brand. WX produced the beer,
but it had the "Trouble Brewery" trademark, which was a production plant that did not exist
(Staines, 2017). Over time, Walmart has won the biggest proportion of customers in all the
markets. However, this makes the company become the wholesome target of similar business
operators. The competing partners tend to present better bonus sales compared to Walmart.
Further, the rivals enjoy the negative reputation of Walmart treating her employees poorly.
The political setup of the US and other nations in which Walmart has its branches becomes a
critical factor in determining the policies of business operations. Possible instability of world
governments is a threat in disguise for Walmart operations. On a similar note, the devolved
economic setup has seen the online market become crowded. New private and public
companies are venturing into digital selling of similar products as Walmart’s. This is a threat
to the future business extensions of Walmart.

Walmart is one of the international companies making booming revenues due to its
extensive business operation strategies. In the United Kingdom, the company has a total of
630 outlets and 2630 stores in Mexico as of December 2021, as reported by Chen et al. 2021.
An increase in the number of Walmart’s stores in the international market has been positive,
as indicated below, from the financial year 2016 to 2020. However, in 2019, a reduction in
the number of premises happened due to the negative effects of COVID-19, leading to the
closure of some outlets.

Year Number of outlets

2016 11527
2017 11694
2018 11717
2019 11360
2020 11500

Similarly, the revenue levels of Walmart have always been escalating, as noted by
Chen et al. 2021. From Walmart's accounting records, the trend of revenues from the fiscal
year 2016 to 2021 has been as shown below. Despite not having a decrease in revenues in the
financial year 2019, a little increase in margin gap from the previous year is evident due to
the aftermath of the pandemic.

Year Annual Revenue

2016 $482,120
2017 $485,860
2018 $500,330
2019 $509,390
2020 $523,960
2021 $559,150

The biggest Walmart business competitors include; Amazon, Costco, Target, and
Albertson's enterprise (Schuetz, 2015). For Walmart to gain a competitive advantage over
them, the company is strengthening its online and physical pick-up stores by implementing
easy and precise steps such as the "pick and collect" process in purchasing an item. More so,
the enterprise is moving out from its original intended operations and start offering loans to
small retailers, which has seen the company earn a whopping $1.7 million in revenue sales in
the 2020 year. Constant joint venture with various business sectors has also played a bigger
part in fighting back the competition. In 2018, Walmart formed a joint venture with Eko, an
entertainment video developer company. This venture was to help Walmart get attached to
her customers in new and more impactful methods and creating more customer engagement
(Hunt, 2018).

From the above discussion, it is evident that Walmart company has broad business
operations in the global market. Through the company's strong financial position, dedicated
workforce, and a committed management have contributed to the organization's positive
growth. However, Walmart should extend its brand further and digitalize its sales platforms
so that when a disaster hits, such as COVI-19 did, a reduction in sales will not be too
significant. The competitive advantage of Walmart is significantly felt. The management
should maintain this for the company to continue enjoying tangible revenues.
 References

Chen, Y., Mehrotra, P., Samala, N. K. S., Ahmadi, K., Jivane, V., Pang, L., ... & Pleiman, S.
(2021). A Multiobjective Optimization for Clearance in Walmart Brick-and-Mortar
Stores. INFORMS Journal on Applied Analytics, 51(1), 76-89.

Jindal, R. P., Gauri, D. K., Li, W., & Ma, Y. (2021). The omnichannel battle between
Amazon and Walmart: Is the focus on delivery the best strategy?. Journal of business
research, 122, 270-280.

Kampf, C. (2007). Corporate social responsibility: Walmart, Maersk and the cultural bounds
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McGee, R. W. (2020). How Highly Would Walmart Rank If It Were a Country? A

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Mun, L. Y., & Yazdanifard, R. (2012). Walmart success in Mexico, Canada, and China:
global expansion, strategies, entry modes, threats, and opportunities.

Staines, M. (2017). Craft Beer Wars: The Impact of Senate Bill 197 and the Expansion of
Colorado Liquor Licenses. In Denver Law Review Forum (Vol. 94, No. 1, p. 20).

Schuetz, J. (2015). Why are Walmart and target next-door neighbors? Regional Science and
Urban Economics, 54, 38-48.

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Edge in the Retail Industry. Manufacturing Competitiveness;

Zieger, R. H. (2011). Walmart and the broken narrative of US labor history. Labour

History, 52(4), 563-569.