How could Wal-Mart continue its extraordinary growth?

Wal-Mart has made its mark in many markets around the world including the United Kingdom and Japan. It has a net sales increase of around 12-13% and satisfactory ratio results according to Exhibit 4 in the case. Evidently, the company has achieved extraordinary growth rates but given the current economic conditions maintaining these growth rates is challenging. The Company cannot cut, outsource or downsize in order to succeed, it has to grow. How might this growth be achieved further?

Wal-Mart can embark upon several strategies to continue its extraordinary growth in the markets it operates in and in new markets as well. Initially, when Wal-Mart was founded in 1962 its approach was based on product innovation to attract customers. Now, however, with the changing market conditions this previous model needs to be replaced by a demand innovation model i. e. how to get customers to buy from you and give you preference over competitors? The three underlying factors that would lead to growth are optimism, innovation and leadership.

Firstly, every economic recession is followed by economic growth as is evident from American history therefore optimism would be a safe option. Secondly, the companies that out-think, out-perform and out-innovate competition would be more successful in the future. Thirdly, leaders make decisions based on their understanding of the fast changing and complex environment they operate within. Thus, Wal-Mart managers must work hard and strive to create conditions for growth.

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The company needs to continue to draw price conscious shoppers through its everyday low prices. Given the market conditions, the consumers want the best price possible. Thus, the company needs to adapt to customer requirements, these could be in the form of convenient store hours, a pleasing store atmosphere, and well-located stores. Moreover, the company needs to further diversify in terms of its store formats so that it can cater to a variety of consumer markets. For e. g. neighborhood stores and supercenters cater to different needs of different customers.

It could further add specialty stores within its outlets which could include for e. g. an Apple outlet, restaurants etc. The management of the company also needs to be further improved. An improved inbound logistics system an enhanced store operation is imperative. Wal-Mart also needs to work upon its IT infrastructure which would include management information and control systems. It needs to streamline its systems further to be able to study point-of-sale and product inventories store by store.

New tools for analysis, forecasting and management need to be introduced to attain a competitive advantage over key competitors. For e. g. through the RFID chips attached to inventory it would reduce costs and increase efficiency. E-commerce is also a segment which needs to be explored. According to figures given in the case it accounts for only 6% of sales revenue which is quite staggering given the boom e-commerce has achieved over the years. Therefore a suitable e-commerce infrastructure is also essential to further boost sales.

Wal-Mart needs to focus more on a more holistic approach with a broader services base aimed at its core customers while at the same time expanding into newer markets. In-store clinics are an upcoming field the company is exploring. This would enhance customer loyalty and retention. This is where marketing comes in; Wal-Mart would need to market its added services such as online music stores, digital photo services, vacation planning, internet access, flower delivery, DVD rentals and financial service to lure customers.

The analysis of competitors such as Target and Costco would give the opportunity to enhance its own offerings and services based on the weaknesses and strengths of these competitors. This analysis would also both an offensive and defensive strategic framework through which Wal-Mart can identify key opportunities and threats it can capitalize on. Lastly, the company needs to further internationalize into other markets that offer an immense opportunity, these would include for e. g.

India which is one of the largest economies in the world, the Middle East which has tremendous potential and other developing nations. Wal-Mart needs to grow in order to survive given the competition. In order to grow, Wal-Mart will need to sell new categories of merchandise, appeal to new consumers, obtain greater share of wallet from its existing customers, and operate in new business sectors and geographical locations. This will inevitably attract new customers and markets and would enable the company to grow.

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