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Macro environment assignment: Assessing Growth Opportunities within Walmart

Question

Task: You are required to develop a macro environment assignment report related to a particular organization of your choice. The overall aim is to evaluate ways in which changes within this organization’s MACRO environment might impact upon its marketing strategies and activities.

You will be assessed on your ability to:
Within an evidence-based scenario of a potential change in any of the MACRO environment forces of your chosen organization:

A) Critically evaluate the company’s strategies for:

  • sustainable competitive advantage
  • segmentation, targeting and positioning (STP), and
  • branding

B) Identify and critically assess two opportunities for growth within the organization’s MACRO environments

Answer

Introduction
EFQM model aims at recognizing and promoting sustainable success to the organization. There are integrated components that together helps an organization to map their achievements as a sustainable organization. The model helps the organization to perform better by making them respond effectively to their opportunities and threats (Liu & Ko, 2018). This is because excellence model value their people and create a culture where employees are empowered to achieve organizational goals. The fundamental concepts of excellence put forward by the model are adding value for customers, creating a sustainable future, developing organizational capability, harnessing creativity and innovation, leading with vision, inspiration and integrity, managing with agility, succeeding through the talent of people and sustaining outstanding results (Suárez et al., 2017). With each of these concepts the business will be able to achieve sustainable excellence in their environment and culture. The purpose of the report is to apply the EFQM business excellence model to Walmart. The major focus of analysis will be on the enabler criteria that is partnerships and resources and processes, products and services. The report will identify the strengths and areas of improvement to Walmart that can help them drive business excellence. Further, the report will justify one operations or supply chain management strategy that will help Walmart to drive business excellence.

1.0 EFQM Business Excellence Model
1.1 Partnerships and Resources

According to this criterion it is stated that excellent organization always focus at planning and managing external partnership and internal resources that can support their strategy and operations.This criterion helps in learning the ways in which the organization forms partnership and manage resources that can cause positive sustained results. Through this criterion the excellent organization is able to build partnership with the suppliers and sustainable relationship that is based on respect and trust. Further, they also focus at managing their finances, buildings, equipment, materials and others to secure sustained success of its strategies (Suárez et al., 2017). The partnership and resources criterion will help in analyzing the strength of Walmart to build sustainable relationships with partners and suppliers and the way it managesit resources in a sustainable way. The ways Walmart built sustainable relationships with its partners and suppliers will help in learning the strengths of the organization in creating sustainable future, developing organizational capability, harnessing creativity and sustaining outstanding business results (Negi& Anand, 2014).

1.1.1 Ways Walmart build Sustainable Relationships with Partners & Suppliers
Sustainable relationship is built on the basis of mutual respect, trust and openness between the suppliers and the organization. Moreover, organizations adopt policies and processes that can help an organization to effectively work together with the suppliers and the partners (Liu & Ko, 2018). In relation to Walmart, it is seen that the company maintains a complex chain of suppliers and partnersfor effective supply of their products. The company has 6500 trucks that help in carrying goods from the suppliers to their stores. The company implements multiple ways and behavior to build sustainable relationships with their partners and suppliers.The company maintains a separate rule book for their suppliers. The performance of the suppliers is carefully managed on a day to day basis based on the standards formed by Walmart (Negi & Anand,2014). The Walmart rule book for the suppliers also acts like a supportive instrument that help them to conduct their supply processes efficiently. When building relationships with the suppliers, Walmart communicate with the suppliers exactly what is expected from them and monitor their progress closely. This is done through the “retail link platform” where each supplier has the chance to monitor the sale of their items each week and the number that Walmart uses it to evaluate profitability. Similarly, other stakeholders and partners also get a chance to watch the trends of the supplier. This system help ensuring transparency between the suppliers and the company (Walmart, 2021). The link platform and open communication helps Walmart to build a sustainable and respectful relationships with the suppliers and partners.

Along with open communication, Walmart also empower its suppliers and partners with relevant data that helped them to develop sustainable relationships. Walmart empower their suppliers and partners with full access to their point of sale. Walmart believes that developing strong partnerships with the suppliers is the best way to gain benefit for both the supplier and the company. This si because with data, suppliers will be able to improve their sales through Walmart and the organization can meet their goals. Thus, such transparency help Walmart to handle fluctuations in demand. Thirdly, Walmart is also known to keep webinar training course for suppliers to teach them the way they can use their capabilities to supply the best products and manage sale (Walmart, 2021). Through such open communication, data sharing and transparency policies between the suppliers and the company, Walmart is able to create a sustainable future and develop organizational capability.

1.1.2 Ways Walmart Manage Buildings, Equipment and Resources in Sustainable way
Along with managing suppliers for sustainable benefit, the organizations are also expected to manage their buildings, equipment and resources in a sustainable way. This means that the businesses should have policies and processes for managing their buildings, equipment and materials in an economical and environmentally sustainable way. Further, it is also important to measure the impact of the operations on the health, safety of the public and the environment. Walmart also implement ways to manage its buildings, equipment and resources to make it safe for the public and the environment (Retaildive, 2021). Walmart is highly focused at managing the waste from the use of its equipment and resources. They company manages its packaging materials in a sustainable way by altering the packaging materials into recyclable and reusable packaging in all Walmart private brand products. the brand is targeting to use at least 20% post-consumer recycled content in its private brand packaging by 2025. Further, Walmart also implements sustainable operations to minimize the impact on the public and the environment. As a part of their sustainable operation, the company has aimed to power 50% of the operations with renewable energy resources by 2025. This will help them improve the performance of the refrigeration systems and maximizing the sustainability of their fleet. Through the use of renewable energy resources, the company is able to effectively manage the lifecycle and physical security of the equipment (Walmart, 2021). Further, Walmart has introduced Project Gigaton through which the organization is able to reduce the harmful emissions from its equipment and manage their energy resources in a sustainable manner.

Along with managing its equipment, system and resources, the company also manages its buildings such as its stores. Recently Walmart has advertised its eco-friendly buildingsin an inventive way to improve the physical security of the buildings and reduce the impact on public health and environment (Negi & Anand, 2014). As a part of their eco-friendly building, Walmart aims at using eco-friendly features in Walmart stores. This shows that Walmart has been successful in managing its buildings, equipment and resources in a sustainable way.

1.2 Processes, Products and Services
An excellent organization always aims at managing and improving its processes, products and services to increase the value of the customers and other stakeholders of the business. Processes and products are designed to optimize stakeholder value (Liu & Ko, 2018).

1.2.1 Key Processes Defined by Walmart to Deliver Strategy
Every organization is focused on designing processes that can help them effectively implement their strategy. These processes also help the businesses to meet their end-to-end need and ensure that the process owners know their roles and responsibility clearly (Liu& Ko, 2018).

The major strategy of Walmart is focused at being competitive and offer people with the lowest price products. they have the motto of delivering an incredible experience to their customers with everyday low prices. The strategy of Walmart to offer low prices for their products is possible because of its processes that it maintains in its supply chain management. Walmart has successfully defined their supply chain management processes that has helped them to sell products to customers at low prices. The modern operations of Walmart focus at managing huge volume of products and a supply chain system that maximizes efficiencies and help in reducing the outlays.

The supply chain management process of Walmart is based on the electronic product information, vendor role in distribution and layout of the warehouses. This means that Walmart has a supply system that is regarded as most technologically advanced and efficient. With the RFID technology Walmart is able to inform its inventory management system efficiently. Secondly Walmart maintains a process of dealing directly with manufacturers (Walmart, 2021b). Along with managing highly advanced supply chain management processes, Walmart is also known to manage a process of reducing overhead and operational costs to implement its low pricing strategy. the process to minimize overhead cost includes merger wages and low-benefit healthcare plans for the employees, low cost for heating and cooling of buildings and other operational cost. Thirdly, Walmart aims at encouraging suppliers to lower the prices of supplies by leveraging its bargaining power. Many companies generate 20% of their revenue from Walmart and the brand uses this advantage to bargain with the suppliers (Heller, 2021). These processes are defined by Walmart to deliver their strategy of low prices.

1.2.2 Innovative Products and Services Developed by Walmart
An excellent organization also focuses at designing and improving its services and products to meet the expectation of its customers and offer high value proposition. Further, the innovation in products and service help the organization to manage the services and products throughout the lifecycle from reusing and recycling where needed. Walmart’s major strategy to be the best retailer is aimed at innovation and acquisitions. Walmart has always adopted to implement in-house innovation to stand differently in the market and used patents to product those innovation. Walmart unveiled innovative technology called Alphabot for its grocery service.The new innovative Alphabot technology has helped in improving the pick, pack and delivery of online grocery orders. Alphabot uses autonomous carts to retrieve the shelf-stable foods, refrigerated items and frozen goods as and when online orders are received (Thomas, 2021). This technology has helped Walmart to stock large number of grocery items and improve its service.

Along with Alphabot, Walmart has also implemented innovative robot services in its pickup towers. The robots help in keeping the stores clear and the company has deployed 360 flow cleaning robots to keep their floor clean. This has helped Walmart to reduce their cost of hiring cleaning staffs in the pickup stores. These systems are developed to make their delivery and customer service faster and better (Perez, 2021). Walmart has recently launched its drone delivery service to successfully deliver covid-19 at home self-collection kits. The drone system is also used in the delivery of its orders to doorsteps. Walmart has also founded other technology products for its products such as fast unloader and others. Walmart has also initiated number of patent applications for these products since 2016 (Heller, 2021). These innovation help in maximizing the value generated for the customers.

Along with innovative technological products, Walmart also aims at producing own private label brands for its customers. 84% of the customers purchase Walmart’s private label brand products. however, it is limited in comparison to its competitor Amazon. Private label brands of Walmart are limited to fashion brands (Petro, 2021). Moreover, there were many times Walmart has faced a failure in attracting customers with its own brands.

2.0 Recommended Supply Chain Management Strategy for Walmart for Excellence
Operational excellence is important for the business because it impacts the overall processes and success of the business. Operational excellence plays an important role in improving processes and systems. For generating operational excellence, it is recommended that Walmart should focus on lean operations that help providing greater customer satisfaction while using fewer resources (Mangla et al., 2020). This will help Walmart to create value for the customers and eliminate waste from the system. Lean operations will also enable the company to create a sustainable future by harnessing the creativity and innovation in its processes. instead of keeping a strategy of “everyday lower price”, Walmart should now plan for a designing a new mission that aim at being the most customer centric company with zero waste. Walmart has already initiated many waste management’s processes since 2005. The company has been engaging with the customers and the suppliers in the processes. the company has an agenda for 2025 where it aims at achieve zero waste in their operations and drive the business towards circular economy (Walmart, 2021a). Thus, a lean strategy can be highly helpful for Walmart because the company is highly focused towards sustainability. Moreover, the innovative strength of the company will help them implement new ideas and technology for lean operation.

For implementing the lean strategy, the company should focus at improving business infrastructure and practices. For the purpose, the company should plan to reduce down the food waste to halves in their operations by 2025 by working closely with suppliers and customers to prevent products and materials from getting wasted. For the purpose of implementing lean operations in the organization, Walmart should aim at implementing different practices in its environment. The practices involve streamline communications, restructuring of workforce, embracing automation, implement new processes and analyze the whole organization. These practices will help the business to focus at waste reduction and plan effective product development for the customers.

As a part of their lean operational strategy, it is recommended that Walmart should aim at planning and launching more private label products that are sustainable and eco-friendly and cause minimum to no harm to the society. The private label strategy will help Walmart to differentiate its products from the competitors and gain control on waste disposal processes. by engaging in producing private label products, Walmart will be able to control its production operation and reduce negative impact of its operations on the environment. Moreover, as a part of their lean operations, Walmart should also focus on collaborating with the customers, suppliers and non-profit organization to help waste prevention on large scale. For example, it can set up recycling infrastructure in multiple sites and involve people to effectively manage recycling processes. Thus, lean operations through various processes will help Walmart to generate attractive and sustainable value for the customers as well as the environment. Moreover, the key supply chain processes, automation and sustainable relationships with suppliers will help Walmart to successfully implement lean operation in its environment.

Conclusion
From the above analysis it is concluded that Walmart can make use of its existing processes, produces and services and its sustainable relationships with the suppliers and partners to implement lean operations. Walmart has successful build sustainable relationships with the suppliers and managed its resources in a sustainable way. Moreover, the company has defined key processes of supply chain management that is helpful for the business to deliver its low-price strategy. however, to be competitive in future, it is important for the brand to implement lean operations strategy to build a more sustainable future and better success by differentiating itself from competitors. This can be achieved through sustainable business processes, implementing recycling activities, developing private label products and embracing communication and automation. This shows that an organization is able to implement excellence in its organization through various kinds of processes and operational strategy.

References
Heller, L. (2021). 7 ways Walmart is innovating with technology. Retaildive. Retrieved 30 March 2021, from https://www.retaildive.com/news/7-ways-walmart-is-innovating-with-technology/525154/.

Thomas, L. (2021). Walmart just unveiled a new technology that could help defend its position as America’s largest grocer. Cnbc. Retrieved 30 March 2021, from https://www.cnbc.com/2020/01/08/walmart-unveils-a-new-technology-for-its-grocery-business-alphabot.html.

Liu, Y. L., & Ko, P. F. (2018). A modified EFQM Excellence Model for effective evaluation in the hotel industry. Total Quality Management & Business Excellence, 29(13-14), 1580-1593.

Mangla, S. K., Kusi-Sarpong, S., Luthra, S., Bai, C., Jakhar, S. K., & Khan, S. A. (2020). Operational excellence for improving sustainable supply chain performance. Resources, Conservation, and Recycling, 162, 105025.

Negi, S., & Anand, N. (2014). Green and Sustainable Supply Chain Management Practices-A Study of Wal-Mart. Emerging Business Sustainability, 141-157.

Perez, S. (2021). Walmart to expand in-store tech, including pickup towers for online orders and robots. Techcrunch. Retrieved 30 March 2021, from https://techcrunch.com/2019/04/09/walmart-to-expand-in-store-tech-including-pickup-towers-for-online-orders-and-robots/.

Petro, G. (2021). Walmart Vs. Amazon: The Private Label War. Forbes. Retrieved 30 March 2021, from https://www.forbes.com/sites/gregpetro/2018/07/15/walmart-vs-amazon-the-private-label-war/?sh=505435de14c3.

Retaildive. (2021). Why Wal-Mart is a retail sustainability leader (but doesn't really want to talk about it). Retaildive. Retrieved 30 March 2021, from https://www.retaildive.com/news/why-wal-mart-is-a-retail-sustainability-leader-but-doesnt-really-want-to/423713/.

Suárez, E., Calvo-Mora, A., Roldán, J. L., & Periáñez-Cristóbal, R. (2017).

Quantitative research on the EFQM excellence model: A systematic literature review (1991–2015). European Research on Management and Business Economics, 23(3), 147-156.

Walmart. (2021). Environmental, Social & Governance Report. Walmart.

Retrieved 30 March 2021, from https://corporate.walmart.com/media-library/document/2019-environmental-social-governance-report/_proxyDocument?id=0000016c-20b5-d46a-afff-f5bdafd30000.

Walmart. (2021a). Reducing waste. Walmart. Retrieved 30 March 2021, from https://corporate.walmart.com/global-responsibility/sustainability/sustainability-in-our-operations/reducing-waste.

Walmart. (2021b). Discover more on innovation. Walmart. Retrieved 30 March 2021, from https://corporate.walmart.com/newsroom/topics/innovation.

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