Organization and management style
No distribution strategy can hope to be successful without input and cooperation from all stakeholders in the supply chain and this is why a businesses relationship with its suppliers is vitally important. Despite the fact that suppliers often fear dealing with Wal-Mart, with one supplier executive stating “if you aren’t totally prepared when you go in there, you’re in deep trouble. ” (Bill Saporito qtd in Robert Grant, 2004), because of its retailing power, it represents an essential manufacturers sales outlet. Wal-Mart has used this situation to develop ever-closer relationships with even the biggest suppliers.
For example, with the manufacturing giant Proctor and Gamble the “retail link” (Robert Grant 2004) has developed to a stage where “70 employees” of P&G work at Wal-Mart’s head office. Subsequently, this sort of relationship has been extended to the majority of the retailer’s suppliers. As with distribution, Wal-Mart also uses the latest technological and Internet advances as a core element of this strategy. The successful business is built on a foundation of strong and positive strategies. To be effectively promoted to external stakeholders, these strategies have to begin internally within the business (D.
Miller 2002). A retailing business cannot expect its suppliers or customers to react positively to strategies that it promotes unless it can demonstrate the internally the business is being built on the same standards and ideals. In essence, this depends upon the management style and the way it manages its human resources, the employees. It is not possible to achieve a first-rate business unless the staff are empowered and committed to the organization’s policies. From its early years, Wal-Mart’s founder Sam Walton was committed to his employees and their involvement and connection to the business. (Sam Walton 1992).
He believed in a shared leadership style with the business belonging to the employees as much as the management. Talent is grown from within into management and leadership positions. Unlike many other discount stores, Wal-Mart promotes a localized rather than centrally controlled decision-making process (Robert Grant 2004). This provides the organization with a better environment within which to react to change. How a business incorporates HR strategy and involves its employees within the overall organization strategy will have a significant impact on the competitive advantage it will be able to achieve.
(Briggs and Keogh 1999). In a industry such as retailing, which is highly dependent upon the actions and reactions of its employees, the human capital can either help or hinder the achievement of the business aims. Customers and Marketing The final segment of a retailing organization’s strategy for success and competitive advantage hinges on the way they respond to their customers and market their product to these consumers. Initially, Wal-Mart’s strategy towards its customers was based predominantly on price.
Anticipating, correctly, that consumers wanted goods at cheaper costs, the organization was one of the first to expand the “discount” store nationally and globally (Robert Grant 2004). More recently, it was quick to understand the subtle changes in consumer requirement, (Comerford and Callaghan 2003) moving to address the consumer requirement for better service and quality linked to lower prices. Staff training in customer care has been increased and improved. Changes in quality control and standards have been built into supplier contracts and relationships, whilst still maintaining tight control on pricing.