Decision Making and Strategy Formulation in Wal-mart

Wal-Mart is world’s largest super shop chain which is renowned for offering a wide range of products for a very affordable price to the customers. Being headquartered in Bentonville, Arkansas, the company is currently the leading employer in the United States and has many outlets in different countries as well, making it one of the largest multinational entities in the corporate histories. Wal-Mart over the years have earned their reputation by cutting profit margin, ensuring cheap sourcing of products and nationwide availability of the retail stores in order to ensure customer convenience. The company has one of the strongest supply networks, allowing it to slash costs even more.

However, it is to be mentioned that just like any other company, Wal-Mart also has competitors that are relentlessly trying to securing a cut from its market share. Some of the notable competitors of Wal-Mart include Amazon, Best Buy and Target. However, in comparison with Wal-Mart some of its closest competitors are lagging far behind. In the recent times, Amazon brought revolutionary changes to the world of retailing by introducing virtual shops form where people can buy their products and get them delivered at their door step. Keeping a close eye on the competition, Wal-Mart itself also has come up with its own virtual shop, something from where people can buy their products by using any electronic device including PCs, smart phones, laptops, notebooks, tabs etc.

SWOT Matrix

Strengths

1. Bring able to offer the lowest price than the market.
2. Very strong distribution channels.
3. Strong sourcing of products through vendors.
4. Large workforce to support its services

Weaknesses

1. Lack of virtual presence in comparison to Amazon.
2. Negative image regarding wages and unionization opportunity for the workers.
3. Excessive dependency on the US market.

Opportunities

1. Scope of market expansion in other countries with particular focus on Asia and Africa.
2. Scope to invest in new product opportunities to expand market share.

Threats

1. The threat of worker strikes due to poor working condition.
2. Rejection by the customers for failure to comply with regulations to provide better working environment for the workers who are the main source of Wal-Mart products.
3. Threat of new competitors and ability of innovation by the close competitors.

The strategy formulation analytical framework works with three different stages including the input stage, matching stage and the decision is making stage. In the input stage, mainly the information are gathered and carefully analyzed through the use of CPM, EFE Matrix and IFE Matrix along with other tools. This is followed by the matching stage where these information are used into the development of matrix like SWOT, BCG and Space matrix which allows an organization to come up with the best strategies that can be taken under consideration which is going to help it with the decision making process. And lastly, the decision making stage mainly stresses on the final decision that has to be taken to come up with the best output. This decision is taken based on the careful analysis of the data that has been gathered through their initial stage.

It is important to keep in mind that, when it comes to the strategy formulation there are various factors that had to be taken into account as far as Wal-Mart if concerned. First of all, it was necessary for the company to make sure that it has a very clear idea about the areas where it has strength and the sectors where it is not so strong. From that perspective, it can be said that SWOT Matrix is one of the most effective ones to help Wal-Mart to determine the sectors that needs more investments and those who can continue to operate well without much cash incentive. It is highly empirical to keep in mind that when it comes to strength, identification of strongest points for an organization serves two purposes. First of all, it allows the company to reduce unnecessary investments in that sector since it is already doing well. On the other hand, it also helps the company to utilize the strength to overpower the weaknesses.

In addition to that, the SWOT matrix helps an organization to understand how can expand its business network more efficiently so that it can increase its profitability which can be understood by the analysis of the opportunities. The future threats should also be taken into account so that the company can come up with preemptive measures to safeguard itself. So in a way, it can be said that the analysis of the SWOT matrix is highly empirical to make sure that the company is being able to develop its business strategies in a way that would allow it to grow even bigger with regards to competition.

On the other hand, as far as the BCG Matrix is concerned, it goes deep inside the organization itself in order to identify the few sectors where the company is doing very well. This is very much relevant to the strength and weakness sector of the organization. The only difference is that BCG Matrix focuses more on the internal aspects of an organization, something that allows it to determine which products lines or services it should focus more on and the sectors that are already doing well and may not need excessive investments. The BCG Matrix therefore can be described as a very effective process of implementing business strategies for an organization.

In conclusion, it can be said that as far as decision making for Wal-Mart is concerned, the second stage- the matching stage can be described as the most vital one which helps with the decision making process. This makes way for the organization to have a very clear picture of where it actually stands in the competition and what are the business sectors of the company that are performing better. It is highly empirical to keep in mind that BCG Matrix is the one that makes the best use of the resources to come up with a conclusion regarding the internal affairs. Here we can see that the company is doing well with the international market so there is a good opportunity for Wal-Mart to expand through globalization even more to increase its profit share. On the other hand, the super centers are the star for the organization which the company would like to hold onto. It is the growing neighborhood market that the company may have to focus on since there is great opportunity for increasing revenue share.