Strategic Initiative Planning
Wal-Mart has announced during the release of the company’s 2014 annual SEC Report that several strategic planning initiatives for the company in fiscal year 2015. Team B will focus on Wal-Mart’s planning initiative to successfully integrate e-commerce into the current organizational structure.
Identifying the Planning Initiative
According to Wal-Mart (2014), “We’re also intent on creating transformative growth by adding
capabilities in e-commerce and mobile commerce. When we view our business through the eyes of our customers, we don’t think about our stores, clubs or websites independently. Instead, our goal is to have customers see these channels ...view middle of the document...
The company decided to focus its e-commerce efforts into only four countries; the U.S., United Kingdom, Brazil and China. This allows the company to focus marketing efforts in those regions, which leads to a more effective marketing campaign. The marketing campaign has proven so successful that Wal-Mart’s nine billion estimated e-commerce sales are thirty percent higher than originally anticipated when the initiative began. By choosing to use a slow expansion process for both the e-commerce and the next-generation fulfillment networks that support the e-commerce Wal-Mart is successfully integrating itself into the e-commerce market.
The biggest obstacle for Wal-Mart is Amazon; fortunately for the company Amazon is a more prevalent choice in the United States. “Wal-Mart increased its e-commerce market share in Brazil, China and the U.K., but did include the U.S. on the list” The other three countries included in Wal-Mart’s e-commerce efforts are generally proving more effective that the U.S. e-commerce marketplace. “In the U.K., the Asda supermarket chain that Wal-Mart owns is the country’s second-largest online grocer” (E-Commerce Sales, 2014). “In Brazil, online sales grew more than 40% in the first quarter and Walmart.com.br is now the most heavily visited e-commerce site” (E-Commerce Sales, 2014). Once Wal-Mart has fully established itself in the four launch countries it plans to move into markets such as Japan, Mexico and Canada.
Initiative affects costs and revenues of the supply chain
Wal-Mart’s initiative of expansion and making a bigger presence in urban areas has forced Wal-Mart to look at the high costs of doing business in those markets. Many of these locations are also smaller in size and have also forced Wal-Mart to rethink their product lines in these new locations. There is a price for doing business in urban areas and “retailers are now willing to come into cities on city terms. Wal-Mart will of course have to deal with all the zoning requirements, high rents, taxes and odd architecture of different buildings. The expansions into the cities will of course affect the strategic planning of Wal-Mart. They will now have to consider union wages, new product lines, information systems, and other daily expenses, such as security, rent, and the limitations of the actual footprint of the store. Because Wal-Mart is moving into these urban locations Wal-Mart will also have to consider the cost of learning about their areas customer based needs and will have to cater to individuals to wish to conduct business with. The opening or initial cost of the expansion will be high, however, the urban areas are an untapped resource which can prove to be hugely beneficial for Wal-Mart. The only challenge foreseen would be the challenge of learning about the surrounding culture and having Wal-Mart cater to those locations needs due to the change in environment. Next, there are also many risk factors that must be considered.
Due to today’s...