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Strategic Management Essay

This paper seeks to produce a report showing how ASDA/Wal-Mart approaches to strategic management. The report covers five areas of operation management (content) which could be answered under the following questions: (1) What does ASDA/Wal-Mart regards as the nature, scope and purpose of strategic management? (2) What is the process of developing strategic management? (3) Which key factors are taken into account when developing strategy? (4. ) Does the ASDA develop strategic options and how are they evaluated? (5) How does ASDA implement and control strategic plans?

Company Background: Wal-Mart Stores, Inc. is an American public corporation and is reported to he the world’s largest retailer and second largest corporation (behind Exxon Mobil). Founded in 1962 by Sam Walton, the company got incorporated on October 31, 1969, and got listed on the New York Stock Exchange in 1972. (Wikipedia, 2007) (Paraphrasing made). Wikipedia (2007) further said that for the fiscal year ending January 31, 2006, Wal-Mart reported net income of $11. 2 billion on $316 billion of sales revenue (3. 5% profit margin) and that as of January 04, 2007, revenue was $33.3 billion higher than it was one year ago. [4]

The company is also reported to largest private employer in

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the United States and Mexico[5]; the largest grocery retailer in the United States, with an estimated 20 percent of the retail grocery and consumables business,[6] and is also the largest toy seller in the United States, with an estimated 45 percent of the retail toy business, having surpassed Toys “R” Us in the late 1990s. [7]. It added that internationally, Wal-Mart operates in Mexico as Walmex, in the United Kingdom (and, from 2007, in the Republic of Ireland as ASDA and in Japan as The Seiyu Co., Ltd. and that for the fiscal year ending January 31, 2006, Wal-Mart’s international operations accounted for approximately 20. 1% of total sales. [8].

Moreover it stated that wholly owned operations are located in Argentina, Brazil, Canada, Puerto Rico, and the United Kingdom. Wal-Mart’s investments outside of North America have produced mixed results. In 2006, Wal-Mart sold its retail operations in South Korea and Germany. [9] (Paraphrasing made) The company however has not been spared from criticisms from other sectors for its policies and business practices.

These criticisms are coming from by community groups, grassroots organizations, labour unions, [10] religious organizations, [11] [12] and environmental groups. These interested groups voiced their concerns of various specific concerns like the corporation’s extensive foreign product sourcing, its treatment of employees and product suppliers, its environmental practices, its use of public subsidies, and the economic impact of the company’s stores on the communities in which they operate.

[13][14][15] (Wikipedia, 2007) ] (Paraphrasing made). Wal-Mart Website (2007) provided that diversification into grocery (Wal-Mart Supercenters and Neighbourhood Markets), international operations and membership warehouse clubs (SAM’S CLUBS), has created greater opportunities for growth for the company. A unique thing about the company is that unlike some corporations whose financial growth does not translate into more jobs, Wal-Mart’s phenomenal growth has been an engine for making jobs.

Wal-Mart Website (2007) added: “As of December 31, 2006, the Company had 1,092 Wal-Mart discount stores, 2,195 Supercenters, 576 Sam’s Clubs and 110 Neighbourhood Markets in the United States. Internationally, the Company operated units in Argentina (13), Brazil (302), Canada (282), China (71), Costa Rica (137), Guatemala (132), Honduras (41), Japan (392), Mexico (888), Nicaragua (40), Puerto Rico (54), El Salvador (63) and the United Kingdom (335). ” (Wal-mart, 2007)

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