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Strategy Management

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STRATEGY IMPLEMENTATION
Strategy Control
Wal-Mart is a company that in essence appears to operate within the realm of the traditional approach to strategic controls. By this I mean the management formulates strategies, sets goals, implements those strategies, and measures them against their predetermined goals. The feedback received comes in many forms, but the most utilized resource is the numbers generated by each store and the forwarded to corporate headquarters through its vast digital network. Wal-Mart operates with a contemporary approach because each of the four characteristics are realized and acted upon almost on a daily basis.
It wasn’t always that simple, back before the implementation of computers Wal-Mart used ledgers to track this data. The principle of tracking previous year’s data or forecasting as it is called now was something that Sam Walton instilled in his store managers. Sam Walton would instil responsibility within his department managers and hold them accountable. This approach was not without reward. By allowing his associates and managers to be creative, those same principles or best practices were emulated into other stores. It was this kind of thinking that lead to new strategies and innovations for Wal-Mart. This creative process which was started by Sam Walton was a driving force in the creation of Wal-Mart’s culture. In light of what Sam Walton’s original strategy and where Wal-Mart is today there is a gap that exists between the company and its associates. The controls that are now being implemented do not align with the original concepts as outlined by Sam. Areas such as employee turnover create gaps in learning which can cause in adequate response times when it comes to customers and the stores they service. Much of the turnover can be attributed to poor wages, less than adequate health benefits and working conditions that have come under fire in recent years. All of these items signal trouble when it comes to promoting a first class environment. If the associates don’t feel like they are being taken care of then that directly affects the company and its customers.

Wal-Mart’s Matrix Organizational Structure

Leadership: Current Strategy
In October of 2014 Wal-Mart CEO outlines growth strategy at annual meeting for the investment community. The company prepared to win on four key customer dimensions – price, assortment, experience and access. In opening remarks at the company’s 21st Annual Meeting for the Investment Community, Wal-Mart Stores, Inc. (NYSE: WMT) President and CEO Doug McMillon outlined the company’s growth strategy, including plans to invest in new capabilities and to continue improving the customer experience at all Wal-Mart stores. McMillon addressed how Wal-Mart is well-positioned to meet the needs and preferences of an ever-evolving customer base.
Improving on four key customer dimensions – price, assortment, experience and access
McMillon said, “Customers make their shopping decisions based on four key dimensions – price assortment, experience and access. What we can offer them, and how we compete across those dimensions, is changing.
“Today, a customer has a desire for more items, more assortment, more choice than ever before,” he continued. “We have tens of millions of customers visiting us weekly online and through our mobile apps looking for information, product options and then buying merchandise from us in stores and online. We’re known for assortment and we will be in the future.”
Discussing price and experience, McMillon went on to say, “At Wal-Mart, we serve value-conscious customers that come from all walks of life and all income levels. Price matters to our customers and it always will. As a company, being a low cost operator is in our DNA. This will never change and we will be the price leader, across a broad assortment, everywhere we operate. Experience is about customer service. From our associates in stores to our engineers and data scientists, we’ll invent new ways to surprise and delight customers.”
McMillon noted that the ways customers access Walmart is being redefined. “There is a growing consensus that the future of retail is not just in-store and not just online. The winners in retail will be those that can put them together. Frankly, we think we’re already doing the harder part. Locations matter because convenience matters. We have the stores, the associates, and the expertise in the physical world that others will need to build.”
McMillon continued, “To capture the upside of our strategic advantages, we need to develop a more seamless relationship with our customers. We won't just be a store on the street. We’ll support our customers’ lives, with them in the driver’s seat, to save them money and time. We’ll give customers the choices they want and need by integrating digital and physical retail. As we have many times before, we’ll exceed our customers’ expectations, and as a result, we will win the new era of retail.”
McMillon also spoke about the state of the company: “We have an important purpose – saving people money so they can live better. Our company is built on a foundation of strong values and integrity. Compliance continues to be a priority for us and a key to building trust with our customers and other stakeholders. However, we go beyond compliance to make a difference on sustainability and other big issues. Our stores are part of their communities. We fight hunger and provide disaster relief while creating opportunities for our associates. We are a company where you can go as far as your hard work will take you. Last year, more than 170,000 people got a promotion in our U.S. business.”
Enterprise-wide approach
McMillon said leadership fully recognizes how quickly customers’ expectations are changing, which requires Wal-Mart to think and act differently.
“In the past, we’ve tended to roll up our plans from markets and segments, but this year we’ve started with an enterprise-wide approach. The internet, mobile, data and technology present opportunities across the world and across our businesses to better serve the changing customer,” he said. “We’ve taken a fresh look at where we want to play – what businesses, markets, formats, and services we need and how to win – what our customer value proposition should be.
“Our strategy will guide our approach to capital discipline,” McMillon continued. “We will change the mix of our capital spend through reductions in areas we have invested in historically to fund investments in new growth opportunities. Specifically, we will moderate the growth of investments in stores, and we will increase our investments in e-commerce.

Winning Now
McMillon outlined what the company is doing to win now; noting that improving the company’s short-term performance is a priority across all of Wal-Mart’s segments and markets.
“Our supercentres in the U.S. should be delivering positive comps consistently. Our combination of pricing, in stock, service levels and merchant skills will generate improved performance in our supercentres. Our Neighbourhoods Markets continue to be a bright spot in terms of comp sales.”
He said Sam’s Club is thinking creatively about the future of its business and has made some changes with membership rewards and credit offerings designed to strengthen its position and performance. In e-commerce, Wal-Mart is continuing investment in its new technology platform, rolling it out to customers, continuing to build its next generation fulfilment network and expanding assortment.
Three key points that will drive the business going forward * “First, we're going to position ourselves to do a better job serving customers. We can create a next generation customer proposition through the combination of what we do with price, assortment, access and experience. We will save them money and time. * “Second, our priority is growth. Driving demand is the only sustainable way to deliver returns over time. * “Finally, we’ll manage capital in a disciplined, thoughtful manner.”

Implementing the Vision
When Sam Walton began the company he envisioned a company that would take care of the customers by offering them whatever they wanted. He also understood that service to these customers was paramount and to take care of the customers you also need to take care of the associates. The early stages of his customer service principles helped to grow the company far beyond even his own expectations. Walton’s vision for growing the company further grew out of his basic principles, and what he called his ten rules for building a business. Each of these rules defined a specific area. If addressed properly and in the manner that he envisioned the sky was the limit.
Opportunities and New Ventures
For nearly a decade, Wal-Mart has been trying to set up its own bank. In 2014, it came close to succeeding at least in one respect. From a consumer's perspective, a bank has three primary purposes. First, it's a place that can lend you money. Second, it's a place to keep the money you've already got. And third, it's a place that can help you to send your money someplace else.
Wal-Mart's move makes sense for the company for two reasons. First, and most obviously, the fees charged on money transfers create a new revenue stream for the company. Incidentally, Wal-Mart already offers services like these through partner MoneyGram International. Second, and corollary to the first, Walmart-2-Walmart gives customers two new reasons to visit Wal-Mart stores -- first, to send money, and second, to pick money up. Each trip offers Wal-Mart the chance to catch a customer's attention and potentially sell that person some stuff.

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