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Example research essay topic: Wal Mart Stores Opportunities And Threats - 2,280 words

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... other places for what they want because of the better selection and quality. Finally, the last critical success factor is market share with a rating of 0. 05. Wal-Mart and Target are both ranked 3 while Kmart is ranked 1. This is about right because as indicated by the total weighted score, Kmart is the weakest with 2. 55. Target's total weighted score was in between but closer to Wal-Mart's score of 3. 15, and Wal-Mart's was the strongest weighted score as 3. 50.

In conclusion of the competitive profile matrix, Wal-Mart as a competitor rises above both Target and Kmart. External Factor Evaluation An external factor evaluation matrix identifies the industry-wide opportunities and threats. Weights are assigned to the various opportunities and threats based on how well the subject company is responding to the threats and opportunities. The ratings are as follows: 1 = poor response, 2 = average response, 3 = above average response, and 4 = superior response. (Figure 2 in the appendix) The main opportunities that we identified were increasing internet shopping, ease of shopping, free trade zones, the Chinese market, and the value of the dollar. The main threats that we identified were technology making products obsolete, customer and employee theft, slow economy, the Chinese regulations, and not offering what the consumer wants.

The opportunities were weighted. 15 for internet shopping, . 10 for ease of shopping, . 10 for free trade zones, . 10 for Chinese markets, and. 05 for the weak dollar. The threats were weighted. 10 for technology making products obsolete, . 20 for customer and employee theft, . 05 for the slow economy, . 10 for the Chinese regulations, and. 05 for not offering what consumers want. The weights and are representative of the importance the opportunities and threats presented to Wal-Mart. They were determined by considering the impact that each one has on the industry and how well Wal-Mart is conditioned to react to the situations presented. We felt that the most important factors were internet shopping, and customer and employee theft.

These two factors are paramount to the industry and all of its counterpart's success. If these factors are not addressed by the industry, bankruptcy is sure to follow. We rated each of the opportunities and threats based on how well Wal-Mart has been positioning itself in the market. Wal-Mart's website has been a huge success with it contributing additional revenue to the bottom line; we rated this as a 4. The response to consumer demand for one-stop shopping has also been a success. The fact that you can buy a vast majority of everyday needs such as groceries, clothes, personal care products, electronics, among many other products shows the commitment Wal-Mart is making to the one-stop shopping idea.

We also rated this 4. We felt that Wal-Mart's continued expansion into foreign countries to be above average and thus rated it a 3. Because China is heavily regulated, we rated their response to the opportunities available in China a 2. This is still a very good score because it is very difficult for any firm to expand into China. Wal-Mart's reaction to the dollar weakening has been above average because of its worldwide coverage. They have been able to take advantage of this economic factor with ease and we rated it a 3.

The response to threats has been equally impressive. While technology is constantly making products obsolete, Wal-Mart has been able to position itself to be a positive avenue for selling all of the newest and innovative products. Wal-Mart suppliers definitely have a great opportunity for sales because of the vast audience that patronize Wal-Mart. We rated this as a 3. Employee and customer theft is inevitable in all industries. This was ranked as a 2 because Wal-Mart uses the same devices that the entire industry uses.

The slowing economy has been a sour point to all industries as well. Wal-Mart has been able to limit its exposure by offering low prices and maintaining its market-leading share. We ranked this factor a 4. Again, because China is such a tough market to enter, we ranked their response to Chinese regulations a 2.

The idea that companies offer products that consumers do not want is not uncommon. There have been thousands of products that have flopped after being introduced. Wal-Mart has been able to circumscribe their exposure by offering thousands of products across many different areas. We ranked their response to this a 4.

The final score, 2. 80, that was obtained from the external factor evaluation matrix shows that Wal-Mart is above average when reacting to opportunities and threats. Internal Analysis: Strengths Management Wal-Mart's policies and practices are designed to ensure an environment that is equitable and inclusive. To that end, Wal-Mart solicits feedback from all of their employees, annually, regarding their opinions of their work experience and the company's implementation of Wal-Mart's basic beliefs and values. In addition, they provide training on working with people, leadership skills, equal employment opportunities, diversity and sexual harassment prevention. Wal-Mart is committed to providing all employees state-of-the-art training resources and development time to help achieve career objectives. They have a number of training tools in place that keeps then out in front of the competition, including classroom courses, computer-based learning, distance learning, corporate intranet sites, mentor programs, satellite broadcasts, skills assessments, and job announcements.

These tools are successfully increasing advancement opportunities for women and minorities. Wal-Mart has been ranked among Training Magazine's 'Top Training 100 ' companies for two consecutive years. Respect for the individual, one of Wal-Mart's company's three core values, is reinforced throughout their training process. Wal-Mart is committed to the customers and communities they serve. Wal-Mart hires locally, representing the diversity and uniqueness of everyone's hometown. As the demographics of the nation have changed, so has the family of Wal-Mart's employees.

More than 15 percent of their employees are over the age of 55, and they are the nation's largest employer of Hispanics and African-Americans. Wal-Mart also uses its respectable financial position to attract and retain employees by offering stock ownership and profit-sharing programs. These programs are available to all full-time employees of Wal-Mart and make a significant impact on the earnings of employees. They are allowed to purchase shares of stock at reduced prices, which allows them an immediate appreciation of their portfolio. With the profit-sharing program, the employees receive bonuses at the end of the year based on the success of the overall company. These also provide a significant amount of compensation to their employees.

Wal-Mart also has very strong community-based initiatives. They have continually gave college scholarships for high school seniors, raised funds for nearby children's hospitals through the Children's Miracle Network Telethon, provided money and manpower for fund raisers, school benefits and churches, Boy and Girl Scouts, park projects, police and fire charities, food banks, senior citizen centers, and more. They also educate the public about recycling and other environmental topics with the help of a "Green Coordinator, " a specially trained employee who coordinates efforts to make an environmentally responsible store. Along this same line, Wal-Mart has created Environmental Demonstration Stores in Lawrence, Kansas; Moore, Oklahoma; and City of Industry, California.

These stores serve as a "test tube" for environmentally friendly building materials and experimental methods for conserving energy and water. Finally, the corporate structure of Wal-Mart is very well rounded and managed with three core values: respect for the individual, service to their customers, and striving for excellence. The management of Wal-Mart is the backbone to the entire company and these core-values have propelled Wal-Mart to the top of their industry and have allowed Wal-Mart to be the world's largest company. Marketing The nature of Wal-Mart's marketing is in its Every Day Low Price (EDLP) campaign. This is what makes Wal-Mart successful. Sam Walton devised a system for which price setting was to be followed.

Sam wouldn't allow management to hedge a price at all. If the list price was $ 1. 98, but Wal-Mart had paid only 50 cents, they would mark it up 30 percent, and that's it. Sam's philosophy was "No matter what you pay for it, if we get a great deal, pass it on to the customer. " The other major campaign Wal-Mart employs is the Rollback. This occurs when Wal-Mart lowers the already lowered Every Day Low Prices. This has really been a successful way for Wal-Mart to increase its patrons. When consumers shop, they are always looking for the best deal, since Wal-Mart already offers low prices, when they rollback prices, they are able to out-price all of their competition.

Stemming from the management's core values, Wal-Mart has been known for their customer oriented approach. Wal-Mart maintains one of the best satisfaction guaranteed programs, which promotes customer goodwill. One can return virtually any product to Wal-Mart without any problems. They simply take the product back and promptly refund the price of the product, nearly no questions asked.

They also promote goodwill among consumers by employing a tactic, which Sam created known as the "Ten Foot Rule. " This is simply the idea that if a customer comes within ten feet of an employee, they are required to greet them and ask if they can help them in any way. This is also evident through employees getting to know customers on a first name basis. Finally, perhaps the single most important marketing aspect of Wal-Mart is that they create the ideal one-stop shopping experience. Wal-Mart is organized into ten distinct divisions. These include: Wal-Mart stores, SAM'S CLUBS, Neighborhood Markets, International, walmart. com, Tire & Lube Express, Wal-Mart Optical, Wal-Mart Pharmacy, Wal-Mart Vacations, and Wal-Mart's Used Fixture Auctions.

Through these divisions, Wal-Mart offers thousands of products. The Wal-Mart stores contain groceries, clothes, healthcare products, toys, electronics, bedding, sports and recreation, automotive, among other items. Because of this conglomeration of products, the typical consumer can go into any Wal-Mart and walk out without having to stop at another store for anything that they could need. Finance/Accounting Since 2000, Wal-Mart's revenue has consistently increased.

In 2000, they had revenues of $ 165, 013 billion and in 2002 their revenue had increased 24 % to $ 217, 799 billion. This is astronomical growth in revenues considering the overall size and scope of Wal-Mart. Top be able to consistently grow revenues in such a large organization is simply amazing. The increase in revenues has also been very kind to their cash flow. In 1997, Wal-Mart had a positive cash flow of $ 4, 044 billion and in 2002 this number had increased to a positive $ 9, 961 billion. This growth also had an impact on Wal-Mart's net income, which is to say that they were able to control their expenses while continuing to grow and expand their operations.

In 1997, their net income was a not-so-paltry $ 3, 056 billion, and in 2002, only five years later, Wal-Mart more than doubled their net income to $ 6, 671 billion. The strength of Wal-Mart is also shown through its ratios. Nearly all of Wal-Mart's ratios are strengths when measured against the industry averages. Through our ratio analysis, we have shown that Wal-Mart is the best-equipped company to succeed in the marketplace. (The ratio analysis can be found as Figure 3 in the appendix) Another area of strength is Wal-Mart's stock price. Figure 4 shows the price of Wal-Mart's common stock from October 2000 until the end of 2002.

The price has fluctuated, but it has only fluctuated between $ 45 and $ 65. Including dividends, an investment in Wal-Mart would perform well. Production/Operations Perhaps the strongest aspect of Wal-Mart is in its access to distribution networks. Wal-Mart uses a system known as cross-docking. This is simply the process of continuously delivering goods to warehouses where they are sorted and distributed to their stores within one day. This enables Wal-Mart to take advantage of economies of scale with shipping trucks with full loads.

This also gives Wal-Mart the ability to increase the speed of deliveries, a faster response to market demands, and a low inventory. This system has allowed Wal-Mart to decrease its sales cost by 2 to 3 percent over the industry. This savings is then priced into the products with the earlier discussed EDLP programs. This system is maintained through the most important aspect of Wal-Mart, its employees. With over one million employees worldwide, Wal-Mart definitely has the manpower to move goods. This is also facilitated with a proprietary satellite-based communication system that enables managers and point-of-sale systems real-time information on the needs of each store.

Research and Development Wal-Mart does not engage in any research and development. Computer Information Systems As discussed in the production / operation section, Wal-Mart uses a sophisticated system of satellite-based communications. They also offer a safe, secure and complete website where consumers can purchase all of the same products found in the store. The website is strength because it is not only a means for purchasing products, but is also a very thorough informational site.

Consumers can log onto web and do company financial searches, find employment, learn about the grassroots of Wal-Mart, email the company about problems, and learn about any recalls of products sold through Wal-Mart. Internal Analysis: Weaknesses Management The biggest weakness that Wal-Mart has in the management area is that it does not have a formal mission statement. While they do have core values, they do not explicitly tell their employees or consumers what their business is. This is a fundamental aspect of a company and it provides not definition and direction, but it gives a company a statement on which to rely on to stay strong and focus...


Free research essays on topics related to: employee theft, core values, opportunities and threats, weighted score, wal mart stores

Research essay sample on Wal Mart Stores Opportunities And Threats

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