Saturation strategy Paper
Michael Bergdahl (2004) had mentioned that focusing on providing the right products and outstanding customer service to your targeted customer is really the key to the retail ballgame. “All associates work for the customers who buy our merchandise. In fact, the customers can fire everybody in our company. And they can do it by simply spending their money somewhere else. The greatest measure of our success is how well we please the customer, ‘Our Boss’. ”
Sam Walton, Founder of Wal-Mart Sam had a famous saying: “Please show your customers the eight teeth.”In Sam seems only a smile to reveal the extent of eight teeth, can be called a qualified “service with a smile.” Sam also taught staff: “When customers come from within 10 feet of you, you have to look at the customer’s eyes and gently encourage him to give you advice and help.”This one is summarized as “ten feet attitude,” Wal-Mart employees as guidelines. (Wal-Mart: No secret to success, 2002)
Wal-Mart’s “customer first” principle is famous, it is well known two provisions: the first article: “customer is always right”; the second provides that: “If the customer is just wrong, please refer to the first!” More distinctive, Wal-Mart’s customer relationship philosophy is – the customer is the employee’s “Boss.” (Rahman, 2008) A happy environment for customers in Wal-Mart can be regarded as a marketing perspective strategy which works on the customer’s philosophy. Matt Haig said that the ultimate key to Wal-Mart’s success is scale. Wal-Mart is usually double and sometimes triples the size of its competitors’ stores. This enables Wal-Mart to buy products in very great bulk, and therefore make the prices per item cheaper. The big stores equal big discounts from supplier’s equal low prices for customers.
Wal-Mart’s market saturation strategy is beat one of the business strategy. The so-called market saturation strategy, that is, within a certain time and certain to quickly layout to maximize the number of stores, quickly saturated the market; do not leave any chance to the opponent. Wal-Mart’s approach is to each place to intervals of 20 miles or so, Wal-Mart stores full of dense, so that to the retail market becomes saturated. This will prevent foreign companies to enter, but also give full play to the efficiency of distribution centers, reducing picking costs (Pharmacy business strategy: to Wal-Mart school of business management – pharmacy, medicine, medicine – pharmaceutical industry, nd).
Moreover, Wal-Mart goes to global to expend its scale. Wal-Mart began operations in the world’s most populous nation in 1996, opening a Wal-Mart Supercenter and a Sam’s Club (John Yunker, 2002, p 551). Since 1991, Wal-Mart from the United States to expand overseas, has been vigorously promote globalization. In 1993, Wal-Mart the number of overseas stores only 1% of all stores by the year 2000 has grown to 25%, two years after and increased to 27%.
From 1996 to 2000, the company’s sales grew 27% in overseas business. Even if the global economic downturn in 2001 and 2002, the company operating overseas sales to 17% contribution. (Wal-Mart’s Globalization and Localization, 2003) Now, Wal-Mart which 25% of its stores are located outside the United States, yet were in only nine countries, and Wal-Mart, like most major companies, is just getting started (John Yunker, 2002, p 551).
As globalization is now a not reversible trend, Wal-Mart goes to global scale is a wise investment for its long term success. Conclusion Wal-Mart now is the biggest retailer in the world, the success factor as a marketing perspective strategy includes the price, products, promotion, service, scale. Although Wal-Mart has met problems such as at the beginning of globalization, (In the late 1990s, Wal-Mart decided to open stores in Germany as part of their strategic growth initiative, however it failed because of the different culture (Kyle Lundby, Allen I. Kraut, 2008, p 564).), it came over, which I think is the most important factor for Wal-Mart’s success.
Discuss the management actions you would suggest to Wal-Mart in order for the company to operate more effectively and efficiently. As we know planning is a process that managers use to identify and select appropriate goals and courses of action. There are three steps in planning process: deciding which goals the organization will pursue; deciding what courses of action to adopt to attain those goals; deciding how to allocate organizational resources to attain to those goals (Golding, N, 2009). As one of the world’s largest retailer, Wal-Mart has grown to be an immense success among American consumers. In order to operate the company more effectively and efficiently, Wal-Mart should do more works on their planning.
Firstly, based on the mission of Wal-Mart which is to offer low prices than other retailers with high quality and maximize returns for the benefits of its shareholders and employees, managers should make more strategies to improve on the sides of the quality of their selling products and the returns for the benefits of its shareholders and employees. On the side of high quality of selling products, Wal-Mart should purchase the high quality products from the suppliers.
Nowadays, more and more customers like to purchase things in the international chain stores. They think the international chain stores have higher quality guarantee. So Wal-Mart should not only focus on the low prices, they also should guarantee the quality. Wal-Mart should introduce some goods and services that other retailers do not have. Like the retailer Tesco in the world, they provide many goods and services that other retailers do not have; they now have many supermarkets in the world.
Secondly, Wal-Mart should do more planning on the management of change. There are some problems such as people, structure, or technology in the organization. Then, managers should plan any alterations in them. Depending on the strategies, it requires the use of different structures because a differentiation strategy needs an organic structure for better control. However, after the managers develop the plans, they should do more works on coordinating the activities.
Wal-Mart manager can hold some meetings to discuss the advantages and disadvantages of these plans. The workers should be done carefully because they are the last step to act the plans. With these jobs dome, the managers of War-Mart managers can bring into effect. These management actions with good planning could be strategically utilized or adopted by Wal-Mart so as to improve the operations of the company.