Strategic Analysis of Wal-Mart: Organizational Structure and SHRM

This essay provides an in-depth analysis of Wal-Mart's organizational structure, business strategies, and strategic human resource management (SHRM) practices. It examines how Wal-Mart's organizational structure and beliefs contribute to its competitive advantage in the retail market. The analysis considers the interests of external stakeholders, including customers, suppliers, and lenders, and their role in the organization's growth. The essay applies Porter's theory of five forces to assess the intensity of competition and market dynamics, highlighting Wal-Mart's strengths and weaknesses. It also discusses the impact of new market entrants and evolving customer expectations on Wal-Mart's strategies. Furthermore, the essay explores Wal-Mart's SHRM arrangements, focusing on future labor demand, technological adaptation, and cost control measures to maintain market share and customer satisfaction. The document / assignment is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

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Wal-Mart Organization
Name
Institution Affiliation
Date

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Wal-Mart Organization
Retail shops have been in existence for a long time. They bring to the market what the
consumers require and sell the products in smaller quantities as compared to selling in bulk. Wal-
Mart is one of the biggest retail shops which sell its products both in-store and online. It operates
a chain of big discount stores and makes a good return on capital due to its sales. Wal-Mart
stores deal with a wide range of products trying to attend to most of the consumer's demands.
Electronics, furniture, food staff, beddings, clothes, groceries and kitchen equipment are among
the products sold by Wal-Mart stores.
Wal-Mart operates under a slogan of “Save Money. Live Better.” This is displayed in
their shopping bags and store receipts. As history shows, it has been enjoying continuous growth
and success worldwide as they continue to attract a considerable number of new customers all
over. This success can be attributed to the good organizational structure adopted by Wal-Mart
(Brea, Casadesus, and Grifell, 2015, p.22-31). The organizational structure interrelates with the
organization beliefs to uphold the essential competitive benefit of this retail store.
Wal-Mart incorporates the interests of the external stakeholders and understands that they
play a vital role in the growth of the organization (Brem and Viardot, 2015, p.17-27). The
external stakeholders include the customers, suppliers and the lenders. Wal-Mart strategy of
keeping their prices low, offering quality and affordable products are the major reasons why they
have many customers. As it’s obviously known, consumers tend to incline towards retailers who
offer low prices. Wal-Mart stores ensure that its key stakeholders (the customers) Customers are
contented with the services they offer, and this brings a win-win situation for both Wal-Mart and
the customers.

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Suppliers are the least prioritized stakeholder. They have to ensure that they
supply quality products to Wal-Mart. By doing this, they create an opportunity to do business
with Wal-Mart and continue to enjoy their profits. The supplier tends to benefit from the slightest
increase in the prices of the product. Similarly, as the demand increases, they have a chance to
supply a larger quantity. They always hope the business continues so that they can enjoy the
benefits. Lenders are also considered as external stakeholder since the business owes them and
have a duty to repay. Lenders help the organizations to continue with its operations by offering
financial support when the organization is facing operational constraints.
The level of competitiveness in an organization is seen where Wal-Mart is able to carry
its business more effectively and efficiently as compared to its competitors. Porter’s theory of
five forces assists to know the intensity of the competition and desire of the market. It helps to
spot the strongholds of the business as well as the weak areas. There is the supplier power which
depends on the number of people who can supply the same product, whether the product stands
out, the required quantity, the power of the supplier and the expense involved in changing from
one supplier to another. This helps to determine how the suppliers can influence the fluctuating
nature of the products’ prices.
The buyers’ power is determined by the demand for the product in the market. Where a
business has a small number of influential buyers, they can command their terms. On the
contrary, where there are a lot of competitors offering homogeneous products and services, the
market becomes flooded and less appealing. This creates a competitive rivalry in the industry.
The next force in Porter’s theory is the threat of substitute goods (Banker, Mashruwala and
Tripathy, 2014, p.672-696). This gives the consumer an option of using the other product in case

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of changes in pricing. It negatively affects the power of suppliers making the markets less
attractive.
Wal-Mart may experience threats of new entrants to the markets. Exceptional industries
are those with strong and long-lasting barriers like patents, government policies, and others. New
entry will be attracted to the industry where markets prove to be profitable. Trading guidelines,
tax policies, and regulations portray the government as an additional force for many businesses.
These five forces aid the organizations to realize the market dynamics hence influencing
profitability in a given industry. Thus, Wal-Mart can make decisions about suppliers, consumers,
and business strategies.
It has been seen from the past few years that Wal-Mart has incorporated its physical
stores into online shops. Consumers can receive what they have ordered via an online platform at
their stores bringing convenience to their customers. The new competitors (new entrants) are
putting pressure on Wal-Mart, and it has to develop new strategies to respond to the challenge of
product delivery. Customers anticipation regarding the products has become demanding. They
expect high quality, openness and faster delivery and the goods must meet their expectations.
Wal-Mart has no choice other than to continuously meet the consumers’ expectations to maintain
its market share.
Strategic human resource management (SHRM) aims to make explicit decisions relating
to both Wal-Mart and its employees. Wal-Mart business is growing and increasing
internationally. This means that more workforce is required to serve the customers efficiently
(Chadwick, Super, and Kwon, 2015 p.315-343). SHRM arrangements take the situation by
predicting future labour demand, using statistics to plan on the growth in financial situation and

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growth of the business. Considering the unpredictable market behaviors like competitors, market
disparities, and other factors, Wal-Mart business needs to change their strategic plan. This may
end up affecting SHRM plans, and they have to put such issues into consideration in their long-
term strategies. With the continuous creativity and innovation in new technology, Wal-Mart is
challenged to incorporate the new trend while creating an SHRM plan. According to Cascio
(2015, pp.463-477), skilled employees have to be recruited, or the existing ones have to be
undertaken for some training to adapt to the new changes in technology.
The high level of competition in business can be felt by all businesses in the world. This
emanates from being a strong challenge as companies/organizations have to restructure their
strategies to respond to the competition. Wal-Mart SHRM plans involve controlling the cost of
labour by avoiding time wasting and training employees on digital skills to be adopted in the
place of work and make a substantial difference.
Wal-Mart has been able to maintain consistency in their way of doing business and still
realize good profits as well as maintaining customer satisfaction. Their strategy of low pricing
has made it safe for them to survive in the market for a long period beside growing
internationally.

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Reference list
Banker, R., Mashruwala, R. and Tripathy, A., (2014) Does a differentiation strategy lead to more
sustainable financial performance than a cost leadership strategy? Management the
decision, 52(5), pp.872-896.
Brem, A. and Viardot, É., (2015) Adoption of innovation: Balancing internal and external
stakeholders in the marketing of innovation. In Adoption of Innovation. Springer, Cham.
Brea‐Solís, H., Casadesus‐Masanell, R. and Grifell‐Tatjé, E., (2015) Business model evaluation:
Quantifying Walmart's sources of advantage. Strategic Entrepreneurship Journal, 9(1), pp.12-33.
Chadwick, C., Super, J.F. and Kwon, K., (2015) Resource orchestration in practice: CEO
emphasis on SHRM, commitment‐based HR systems, and firm performance. Strategic
Management Journal, 36(3), pp.360-376.
Cascio, W.F., (2015) Strategic HRM: Too important for an insular approach. Human Resource
Management, 54(3), pp.423-426.