Walmart

Defining Leadership through the Fortune 500 Leadership is a difficult term to define. In literal definition, it means “the action of leading a group of people or an organization”. However, that is a very prosaic definition. What qualities make up “the action of leading a group of people or an organization”? One way to find out is to observe the qualities possessed by leaders themselves. The Fortune 500 is an annual ranking of America’s largest corporations. At the very head of each one of these 500 corporations is a single individual called a Chief Executive Officer, or CEO.

The CEO is in charge of all of the main responsibilities of the corporation. So it is no doubt that CEO’s are leaders; the CEO’s of the Fortune 500 lead millions of employees and large scale business decisions everyday. As number two on the Fortune 500 list, Walmart is regarded as one of the very first “big businesses” to ever go multinational. The statistics on Walmart are astonishing: housing more than two million full-time employees, boasting a whopping $405 billion in revenue last year and owning more than 8,500 stores worldwide.

Beginning as a small business investment, it is no doubt that the Walmart corporation took someone with a vision to develop its domination in the business world. Not only did it take a vision, but someone audacious, reliable and empowering enough to execute such a large dream. In 1962, small business owner Sam Walton opened the very first Walmart in Rogers, Arkansas. The strategy of the business was one the world had not seen yet before: a chain discount store. Within just five years, it had expanded to 24 stores, and by 1968, it had went multistate.

That was just the beginning of the Walmart rise to reign. But what qualities did Sam have to build such an empire? Many claims Walton was very inquisitive and open to criticism of his business in order to improve it; he was constantly concerned about the customer and looking to improve. Walton was also optimistic; his positivity bred grounds for happy employees—gaining the willpower of each individual. Walton was also clever, learning from his competitors and seeing how he could use the skills he had seen to advance his own business.

Today, Walmart is one of the largest corportations in the world thanks to its first CEO, Sam Walton. Walmart also gives back to its community: In 2011, Walmart and the Walmart Foundation gave $958. 9 million in cash and in-kind contributions around the world. Rising above Walmart this year for number one on the list of the Fortune 500 is ExxonMobil. Over the last 125 years, ExxonMobil has went from a kerosene distributor of the US to the largest publicly traded petroleum enterprise of the world. Their leadership strategies date back to its founding, with the Rockefeller’s oil industry.

The Rockefellers were one of the biggest and first U. S. businesses back in the age of the industrial revolution. ExxonMobil has underwent several name changes and through many CEO’s to get to its standing in today’s #1 place in the market. So how does Rex Tillerson handle it all? Many report Tillerson as optimistic, clear and confident. He has been working with ExxonMobil for over thirty years, so it is apparent that he is consistent and persistent with his business as he deals with a fluctuating market.

Communication also plays a major role in Tillerson’s leadership style. “What we support is continued efforts to understand the problem better. We need to work harder on articulating our views, and we’re going to try to do better at that in the future,” Rex has said. Rex understands the importance of communicating within his company with his employees as well as potential investors. Not only is Tillerson a great business titan, but like Walmart, he gives back to his community.

Through the work of Tillerson’s leadership, ExxonMobil is involved with many groups and organizations including his involvement of many organizations including Alpha Phi Omega, the United Negro College Fund, and the Boy Scouts of America. Allergan is ranked #457 on the Fortune 500 list, but do not be fooled by this number: it is by far the fastest growing corporation on the Fortune 500 list with a 155650. 0% change of profits from 2010 to 2011. David Pyott is the CEO of this pharmaceutical corporation and ranked #11 on Forbe’s list of CEO’s.

He joined in late 1998 and reconstructed the business’s strategy on worldwide operations. In June 2006, he was awarded the honor of Commander of the Most Excellent Order of the British Empire (CBE) by Her Majesty the Queen in acknowledgment of Pyott’s contribution to British business excellence and management skills in the United States. Pyott holds leadership in many international boards as well as serves member in many international medical-related councils and organizations. Through this, he gains a keen view of the evolving world around him and applies this to his business.

So it is of no doubt why Allergan can be seen as the fastest Fortune 500 under Pyott’s leadership of just 13 years thus far. Allergan also has significant claims about its companying, stating “Allergan, Inc. is a multi-specialty health care company focused on discovering, developing and commercializing innovative pharmaceuticals, biologics and medical devices that enable people to live life to its greatest potential — to see more clearly, move more freely, express themselves more fully. Tying back directly to this mission statement is their “insight for life” program that gives developing countries access to medicine and healthcare. So what is a leader based on the qualities expressed by three of America’s top CEO’s? Being a leader is being visionary, being communicative, being insightful, being clever, being open-minded, being persistent, being motivating, being smart, being hard-working and most of all, being caring and compassionate to those around you.

As I entered Wal-Mart, the lights were bright but not gleaming. The employees were pleasant and working for the most part. Everything was easily accessible. I was not approached by anyone but if you needed help with finding something or you had a question about a product, there was staff available to assist. There were signs on the top of each isle which gives you an idea of the kind of things you can find in that particular isle. The store decor is not particularly pleasing to the eye but bearable none the less. You can pretty much find everything you need in your daily life and more at this store.

Quality of products is below average and prices reflect the same. You can get a money order, send money to a loved one, or you can cash your check. Your one stop-shop, as they say. I found the shoppers to be average to below average income level. I also saw some who were pretty well off but are still shopping at a discount store to save money. After all, no matter how much money you have, who doesn’t want more? How do you spot a “well off” person? The clothes they wear, the handbag they carry, jewelry and things of that nature.

I would like to point out that, these folks are not buying clothes or jewelry here, they are here for the everyday things such as groceries, diapers, paper products, cleaning supplies, etc. The average to below average income people also but some of the same things but in addition to that, they also bought clothes and shoes and jewelry. Almost all the people bought their things with a credit card or a debit card. Some people had an access card, which is a government funded welfare program for food. I am assuming (and hoping) that the above average income people did not use or have a need for this.

Wal-Mart is a large company that deals with almost all areas of shopping and there are situated in United States and other parts of the world. Wal-Mart is known to have about 100 million customers alone in the United States and earns billions in profits. In  a situation like this there are meant to reach out to those customers in one way or the other to prove to them that they are appreciated thereby nurturing and maintaining the relationship with customers and other people of the world,  these are the reasons why Wal-Mart rolled out their CSR policy to this effect.

As a consumer, going through this policy would encourage them and keep their heart to the store. Whenever they think of shopping, they think of Wal-Mart. There are many superstores around and the once a customer decides to go to, is based on choice. This choice is motivated by the attitude of the store to a particular customer. So this policy should be encouraged so as keep the customer coming back , because this is the only way to kept the business going and growing.

In addition, as an associate supplier, I would encourage this CSR policy in other to increase my sales and put money in my pocket and increase the gross income of Wal-Mart.

I am very much in support of their CSR policy going by the areas, which there go into to affect, change and better the life of people.

CSR PROJECTS OF WALMART

Environment: Wal-Mart is a company that manufactures thousands of junks everyday, and in their quest for a safe environment, for all, I think would go a long way in bringing the heart of people to them.

Community projects: It is also a wonderful idea for Wal-Mart to work with voluntary organizations like Red Cross, Unicef, United Way, Special Olympics. A good collaboration with this organization would be a speedy way to reaching millions of life all over the world and I know thee action is boosting their image worldwide.

People: For a quest to provide better service to customers worldwide, I believe their efforts on staffs and associates to make them effective would help a lot. Offering assistance such as training, scholarships, and many other programs to make them happy and comfortable.

Disaster Relief: Assisting disaster victims like that of flood, earthquake, fire, and disease would is also a good way of exhibiting a kind gesture.

THE MOST SIGNIFICANT COPERATE POLICY.

However, the most significant of all policy carried out by Wal-Mart is their policy on environment. I give kudos to that. Based on the speech made by their executive on their policy on cooperate policy on environment, I am made to understand that they are to begin the manufacturing of 100% recyclable goods and packs. There is also an attempt to reduce their packaging by 5%. This would go a long way in reducing millions of junks in the environment and would be encouraging a healthier one for that matter.

MY OPINION ON WALMART CSR POLICY AS A CUSTOMER

As a consumer who shops constantly with Wal-Mart, the CSR policy is a very lovely one. It makes me feel like I am not shopping in vain. I just have it in mind that any time I shop in Wal-Mart, I am indirectly rendering a help to someone else and it makes me feel good that I am touching the life of someone out there.

But sometimes I seem to wonder how this becomes so possible, after selling at a very cheap price, they still stretch out to lend a help hand, to me, this is heavenly and I will like Wal-Mart to keep up the good work. I also strongly believe that many other consumers out there are feeling the same way. Even as their aid is made public, it makes those that do not know about them to be informed.

Reaching out to customer and letting them know that their patronage is appreciated would make them come back always and working on all means to deliver a quality service just gives the customer the mind set that every thing about Wal-Mart has quality.

In summary, reaching out to customers in every means possible and making them feel and know that their money is worth it, keeps bringing them back.

SURVEY CARRIED OUT ON OTHER CUSTOMERS (BOTH REAL AND POTENTIAL)

Number of surveys carried out                                                   50

Percentage supporters of CSR policy                                        85%

Percentage non-supporters or CSR policy                                 10%

Percentage of undecided                                                              5%

Percentage effect per-customer shopping rate                            20% (increase)

Percentage (potential) increase in customer rate                         45%

DERSCRIPTION OF TABLE

The table shows that they is a positive effect of the CSR policy on both in the rate of shopping and has a very good potential of increasing customers. This is because everyone would like to shop where he/she would get their money’s worth and would also be appreciated.

MY OPINION ON WALMART CSR POLICY AS A SUPPLIER

I, as a supplier to Wal-Mart is supporting their CSR policy. Based on popular demand, I have seen that Wal-Mart is a brand on the heart of millions of people all over the world. In addition, as a successful business venture, there are taking upon themselves some responsibility of the government, putting in lots of money to better the lives of people. I believe this is making them a responsible citizen. With this form of responsibility is supposed to be commended because they are giving back to the people what was given to them. Whatever way used by Wal-Mart to improve their excellence and service to customers would favor me as a supplier. Therefore, I believe that engaging in charity works, eradication of poverty, and assisting disaster victim is a well-directed effort.

SURVEY CARRIED OUT ON OTHER ASSUMED ASSOCIATE SUPPLIERS

Number of surveys carried out                                                       50

Percentage supporters of CSR policy                                             78%

Percentage Non-supporters of CSR policy                                     22%

Percentage positive effects on marketing strategy                          64%

Percentage effect on sales                                                               35%

DESCRIPTION OF TABLE

With this table above, it is seen that with a personal surveys and questionnaires carried out on assumed suppliers, it is discovered that there would be a very positive effect on the total business outfit if the policy were enforced.

The views of about 39 supporters was based on better marketing strategy and the CSR policy would be the best so as to increase the income, reach out to 65% of customers worldwide, increase the awareness of Wal-Mart by 64% and the gross earning could be increased to between 20% to 35%; this I believe would increase dividend per share.

MY DECISION, EFFORTS, AND IDEAS.

As a supplier who is in support of the efforts taken by Wal-Mart, I would seek possible way to improve in the products I supply to them. I would support them also by seeking a better packaging to reduce environment hazard thereby aiding the environmental section of the CSR policy. I would also seek out possible ways to join in the voluntary section. To put in my energy where seems necessary.

Other ideas I would like to put in are by suggesting that Wal-Mart should also get involved with grass root talents. These can be done in the areas of entertainments and sports. Helping upcoming talents in the streets would also be one of the best and fastest way to reach the heart of the ordinary man. This idea is a very important one because in know that entertainment is a way of winning peoples heart.

Programs to this effects could be organizing talent hunt shows, reality TV programs and any other forms of entertainment that you can lay your hands on and you know people loves so much, for examples music, soccer, football, basketball and all the rest of them.

With additional efforts as these, we would be exercising a powerful marketing strategy.

IN SUMMARY: I believe that all these actions being taken by both Wal-Mart and me a as a supplier is all part of the effort to market the company and an increase in come on both their side and mine. This is because I feel that if they grow, I grow, if they lose, I lose, so it is all about teamwork and service to humanity.

EFFECT OF WALMART PRIVATE LABEL ON MY PRODCUT AS A SUPPLIER

I have come to understand that the uses of Walmart private label on my products are very okay and do not harm them at all. It a phenomenon that the Wal-Mart private label is seen as a brand of quality, affordable and certified by customers. Therefore, since I have noticed that according to study and experience that Wal-Mart label is always on the mind of customers, I allowed it and it goes a long way to increase sale.

Therefore, having the private label of Wal-Mart would put more money in the pocket of the supplier.

REFERENCES

1. Biesada, Alex. (2006, October 13). Hoover’s.  “Wal-Mart Stores, Inc.” Retrieved.
2. Frank, T.A. (2006). “A Brief History of Wal-Mart.” The Washington Monthly, Retrieved, July 24, 2006.
3.  Staff Writer. (, 2006, April 17) “Fortune 500.” CNN/Fortune.. Retrieved on July 15, 2007.
4. Staff Writer. (2007, April 16) “Fortune 500.” CNN/Fortune. Retrieved on July 15, 2007.
5. Staff Writer. (2005, October 25) “Is Wal-Mart Going Green?” MSNBC, Retrieved on November 8, 2007.
6.  Koenig, David. (2006, March 22) “Wal-Mart Targeting Upscale Shoppers.” ABC News.
7. Reyes, Sonia. (2006, August 23)”Study: Wal-Mart Private Brands Are Catching On.” Brandweek. August 21, 2006. Retrieved on August 30, 2006.
8. Ortiz, John. (2005, October 26) “Can Kroger Slow Wal-Mart?” Deseret Morning News. Retrieved on July 25, 2006.
9. The Rise of Wal-Mart. Frontline: Is Wal-Mart Good for America? (2004-11-16). Retrieved on 2007-09-19.
10. “Neighborhood Markets.” Wal-Mart (http://walmartstores.com/GlobalWMStoresWeb/navigate.do?catg=504;contId=47). Retrieved on April 19, 2007.

Wal-Mart is the largest retailer in the world. The position Wal-Mart holds gives the company a large responsibility to contribute to the community that supports the stores. As an organization Wal-Mart owes its success to the stake holders of their business. Wal-Mart requires the community to continue business operations, Trevino and Nelson state that “a major stakeholder in business must be the communities of which corporations and other organizations are a part” (2011). Wal-Mart must consider the community happiness with their business decisions to remain profitable.

Wal-Mart gives back to the community in several ways including donations to charitable foundations and by offering affordable grocery good to impoverished areas. According to Feedingamerica. org Wal-Mart gave “$2 million donation to help food banks save money on their energy bills” (2011). The donation allowed 16 food banks to improve their efficiency and provide more services to the community for the same amount of funding. Wal-Mart has also received the “MOWAA Corporate Friend of the Year” (Meals on Wheels Association, 2012) award for its donation to the organization. Wal-Mart has proven that it contributes to the communities it supports.

The contributions, when compared to Wal-Marts yearly profit, of “$16,389 million in FY2011” (Datamonitor, 2011, p. 4) seem miniscule. The true test of adequacy of Wal-Marts contribution to the communities it operates in will be if it can remain in business for the long term. According to “Paymar Communications”, “Wal-Mart also has been going through a major transformation and committing itself to progressive policies in the realm of corporate social responsibility, particularly when it comes to the products it sells and major efforts to promote energy conservation” (2010, paragraph two).

Wal-Mart, as the biggest retail store in the United Sates, has a social responsibility to provide quality products to the customers. In 2010, the company took the initiative to reduce unhealthy levels of salts, fats, and sugars in their products. They also decreased the prices of healthy foods to encourage customer to purchase them. Wal-Mart also developed a seal to place on healthier foods with nutrition information rating the levels of sodium, fat, and sugar content (“Paymar Communications”, 2010). The leading factor in Wal-Mart taking this initiative was to reach customers with an interest in a healthy lifestyle.

With obesity on the rise across the nation people are becoming more conscious about what they eat and offering healthier foods, organic products, and enhanced labels on the foods will give the customer more options to choose from within the store. By reducing the prices of these healthy products Wal-Mart can increase their customer base, specifically those with an interest in a pursuing a healthy life style. Additionally this will ensure Wal-Mart is leading their competition and could be the benchmark for such companies as Target, K-Mart, Sears, and Costco.

The factors influencing the organizations strategies are contingent on the need, not only of the customers, but also Wal-Mart’s increase in sales and profitability. Wal-Mart wants to ensure they not only have healthy customers but also that the organization will garner major gains in sales from these changes. The “Paymar Communications” (2010) website also states that through forging these initiatives, Wal-Mart has figured out a formula to be a good corporate citizen, give consumers superior bargains and still make tons of money; $14. billion in profits in 2009. It is the consummate win-win-win for the organization and customers alike. Wal-Mart’s social initiative is to help stop hunger in the communities in which it operates. Also Wal-Mart is providing healthful products to gain health-conscious customers and to help their customers maintain a healthy lifestyle at a low cost.

References

1. DATAMONITOR: Wal-Mart Stores, Inc. (2011). Wal-Mart Stores, Inc. SWOT Analysis, 1-13.
2. Paymar Communications. (2010). Retrieved from http://paymarcommunications. om/the-united- states-of-wal-mart-and-corporate-social-responsibility/
3. Trevino, L. K. , & Nelson, K. A. (2011). MANAGING BUSINESS ETHICS Straight Talk About How To Do It Right (5th ed. ). Retrieved from The University of Phoenix eBook Collection database.
4. Walmart Foundation Gives $2 Million to Help ‘Green’ Food Banks. (2011). Retrieved from http://feedingamerica. org/press-room/press-releases/walmart-green-initiative-2011. aspx
5. We Are Meals On Wheels Association of America. (2012). Retrieved from http://www. mowaa. org/Page. aspx? pid=600

New York Times reporter David Barstow uncovered a shocking story against retail giant, Wal-Mart. His investigation started after Wal-Mart shut down its internal investigation over the possible bribery of Mexican officials. Wal-Mart used these bribes to accelerate growth in their Mexican zoning areas. These allegations surfaced when a Hipic lawyer contacted Wal-Mart headquarters in Bentonville Arkansas. This lawyer had inside information on Wal-Mart’s bribes, as he represented them in their acts. He was used as a middle man for Wal-Mart’s payoffs to these officials.

Wal-Mart took action in defending its image. In 2005 the company launched an internal investigation that dug into the operations of Wal-Mart de Mexico. The reports put together obvious signs that the company had, in fact been bribing the city officials to open up zoning areas and to swiftly create building permits. These bribes reported to total above $24 million. Wal-Mart’s lead investigator had this to say after the investigation was conducted, “There is reasonable suspicion to believe that Mexican and USA laws have been violated. When Wal-Mart’s leaders were faced with the decision to continue the investigation, they gave it to Wal-Mart de Mexico to investigate; it was shut down. Wal-Mart didn’t notify Mexican or American law enforcement with the information and none of these wrong doings were brought to the public eye until the publication of Barstow’s article. Wal-Mart would obviously face critical examination by the public if the allegations were true; reasoning behind closing the investigation. Wal-Mart told the justice department that the investigation was unnecessary and the cases were minor where they did occur.

The Time’s had a view in their investigation as they found substantial evidence supporting the bribes taking place. It’s believed that these bribes were the jump start Wal-Mart needed to gain its huge standing in Mexican society. 1 in 5 Wal-Mart’s are located in Mexico. The Times interviewed Sergio Cicero Zapata, who resigned from Wal-Mart de Mexico in 2004. Cicero told them of personal instances of him giving lawyers envelopes of money to pay off government officials. Cicero said that he had done these deals for years while working for Wal-Mart. Along with the information they received from Mr.

Cicero, the times also found government documents with evidence of payoffs. These documents showed that within days of the money being given to the lawyers the permits were granted. The Times have published new stories exposing the company further with deeper information that they have gained through their investigation. Some of the information includes: * Wal-Mart pays $341,000 to officials in Mexico City to build a Sam’s club. The building was put in a densely populated area, and was done without a construction license, or an environmental permit or and urban impact assessment, or a traffic permit. Wal-Mart bribes officials to build “a vast refrigerated distribution center in an environmentally fragile flood basin north of Mexico City in an area where electricity is so scarce that many smaller developers turned away. ” The bribe for this case was $765,000. * A zoning situation in Teotihuacan caused Wal-Mart to make a payment of $52,000 to enable them to build a store near a famous pyramid site. The citizens were enraged by the location of the store but the protests were ignored and the Wal-Mart was built.

The mayor of Teotihuacan spent $77,000 buying and renovating a ranch the next year. Unexpected on a $47,000 yearly salary. * There have also been reports of Wal-Mart building on ancient ruin sites. They have been obtaining the permits to do so illegally. Now that the statements have been made public, Wal-Mart de Mexico has been under investigation by the U. S. and Mexican governments. The leadership is questionable within both Wal-Mart and Wal-Mart de Mexico. The high members of Wal-Mart de Mexico made a choice to shut down the investigation to cover up their tracks.

The consequences of being discovered breaking the law to this extreme would put a huge chip on all of the Wal-Mart leaders’ shoulders. The growth of their business is also at stake. Apparently these bribes played a major role in the expansion of Wal-Marts across Mexico. The leaders located in Arkansas will more than likely be held accountable for irresponsible actions as well. If the allegations are true they could be found out for knowing about the illegal bribes. Ethical issues do not look good for leaders; it can dramatically impact the way the company is viewed.

The actions of Wal-Mart making deals in Mexico could greatly affect the way the company is viewed and its overall standing to the public. With the investigation still ongoing it has yet to be clear what leaders at Wal-Mart are tied to the bribes in Mexico but it is undoubted by the New York Times that there are several people accountable for the actions. It is also possible that Wal-Mart has been doing this in other countries as well, but will only be confirmed when and if the government can obtain the information they need to prove wrong doing against Wal-Mart.

Works Cited

1. City. David Barstow; Alejandra Xanic Von Bertrab And James C. Mckinley Jr. Contributed Reporting From Mexico. “Vast Mexico Bribery Case Hushed Up by Wal-Mart After Top-Level Struggle. ” The New York Times. 22 Apr. 2012.
2. The New York Times. 04 Mar. 2013 <http://www. nytimes. com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced. html>. Radcliffe, Dana.
3. “Leadership Lessons From Wal-Mart’s Bribery Scandal. ” The Huffington Post. 16 July 2012. TheHuffingtonPost. com. 04 Mar. 2013 <http://www. huffingtonpost. com/dana-radcliffe/leadership-lessons-from-w_b_1672032. html>.

What drives some companies to succeed while others languish? Successful companies develop a system of a few truly unique capabilities that help them create differentiated value for their chosen customers. Retailers provide many case studies in capabilities-driven success, one of the most compelling of which is the big discounter triad of Walmart, Target and Kmart. And in this fourth-quarter retail season, we thought it would be helpful to take a closer look at what really distinguishes these competitors because they provide valuable insight into the key components of a winning corporate strategy.

We believe that all successful companies — Walmart and Target included — know precisely how they provide value for customers. They make a deliberate choice about their “way to play” in the market, guided primarily by what those companies do uniquely well: their distinctive capabilities. We define capabilities not as “people capabilities,” but as the interconnected people, knowledge, systems, tools and processes that create differentiated value. They then select a set of products and services that best leverage those unique capabilities and optimally suit their chosen way to play.

Most important, they avoid markets, products or services that require new or disparate capabilities, and thus threaten the company’s focus. Focus for us, therefore, is not about picking just one market, but rather about choosing one coherent way of competing. The true story about Walmart’s and Target’s success is that they have gone to great lengths to focus internally on building capabilities and product offerings that suit their way to play. Kmart, by contrast, has failed to develop a unique or differentiated way to play, and all that goes with it. Let’s take a closer look.

Walmart’s success doesn’t just stem from impressive logistics, aggressive vendor management and its position as a low-cost retailer. What really underlies Walmart’s advantage is a coherent and differentiated approach to the market. • Their well-defined way to play focuses on “always low prices” for a wide range of consumer items, from food to prescriptions to electronics. • They support their low-cost way to play with an integrated system of capabilities, including: real estate acquisition; no frills store design; and superior supply chain management involving among others expert point-of-sale data analytics. Their product and service mix is kept tightly aligned with their way to play and capabilities system: avoiding big-ticket items (e. g. , furniture or large appliances) where it has no cost advantage, or where new service capabilities might be required. And it innovates constantly within its chosen constraints: e. g. , tailoring product assortments to local trends.

Target caters to a similar “money-saving” market, but offers a very different value proposition, focuses on different capabilities and has a different product portfolio. Target’s way to play emphasizes design-forward apparel and home decor for image-conscious consumers. Everything from store layout to advertising to inventory conveys an eye for style. • Its capabilities system supports this way to play with image advertising, “mass prestige” sourcing (with the use of private brand and exclusive offerings), pricing, and the management of urban locations. • In product and service mix, Target is similar to Walmart in many ways, but Target satisfies the needs of its younger, image-conscious shoppers by stocking more furniture, clothing and exclusive designer merchandise than Walmart.

Kmart, the least successful of the group, is struggling to define its way to play, describing itself as a “mass merchandising company that offers customers quality products through a portfolio of exclusive brands and labels. ” Yet, that definition could describe just about any retailer. As a Walmart customer, you know you’ll save money and still feel welcome. At Target, you know you’ll get fashionable products at prices that feel reasonable. What, then, is Kmart’s niche? Walk through a Kmart store and you’ll discover designers like Jaclyn Smith in the low-budget ambience of a warehouse.

They carry Kenmore appliances, which may require high-touch sales assistance that many Sears customers expect and many Kmart stores lack. In short, Kmart has not established an identifiable way to play that reflects both customers’ needs and its own capabilities. Harry Cunningham, the founder of Kmart, allegedly admitted that Sam Walton (the founder of Walmart) “not only copied our concepts, he strengthened them. ” The lack of a clear concept about how to reach the market, in our view, is the single most important factor in explaining why Kmart’s fortunes have fallen so far, compared to its two rivals.

Without a clear way to play, and capabilities to support it, a company cannot achieve the coherence it needs to truly excel at what it does, and thus outpace competitors. http://blogs. hbr. org/cs/2010/12/why_cant_kmart_be_successful_w. html Kmart (sometimes stylized as K-Mart), is an American chain of discount stores headquartered in the United States. The chain purchased Sears in 2005, forming a new corporation under the name Sears Holdings Corporation.

The company was founded in 1962 and is the third largest discount store chain in the world, behind Walmart and Target, with stores in the United States, Puerto Rico, the U. S. Virgin Islands, and Guam (which houses the world’s largest Kmart). [2] As of January 29, 2011, Kmart operated a total of 1,307 (6 closing by early 2011) Kmart stores across 49 states, Guam, Puerto Rico, and the U. S. Virgin Islands. This store count included 1,278 discount stores, averaging 93,000 sq ft (8,600 m2), and 29 Super Centers, averaging 169,000 sq ft (15,700 m2). [3]

Kmart became known for its “Blue Light Specials. ” They occurred at surprise moments when a store worker would light up a mobile police light and offer a discount in a specific department of the store. At the height of Kmart’s popularity, the phrase “attention Kmart shoppers” also entered into the American pop psyche, appearing in films and other media such as Troop Beverly Hills, Six Days Seven Nights, Rain Man, Beetlejuice, and Dawn of the Dead. Kmart’s world headquarters was located in Troy, Michigan, but since the purchase of Sears, has been relocated to Hoffman Estates, Illinois.

Kmart also exists in Australia and New Zealand (see Kmart Australia), although it now has no relation to the American stores except in name, after U. S. equity in the Australian business was purchased in the late 1970s. https://en. wikipedia. org/wiki/Kmart As outlined in “Private Equity May Be The Only Way To Save Sears,” as restructuring and turnaround advisers and investors, we here at ACM Partners are often asked about the big retail “stories of the day” (meaning companies on the brink of distress). GAP, Tiffany & Co. and now Sears and Kmart are the most recent “big cases” we’ve received the majority of inquiries about. Here, then, is our take on what’s in store for Kmart (which hedge fund manager Eddie Lampert officially took control of in 2003, post-bankruptcy):

Do we need Kmart anymore? While “during the early years, Kmart was the fastest-growing of the “big three” discounters (Kmart, Wal-Mart and Target), easily outpacing their key competition,” Kmart, like its parent-company Sears (which acquired the discount retailer in 2005), has lost significant market share through a ombination of poor market strategy and by being “squeezed out” by “sexier” (ie Target) or more affordable (ie Wal-Mart) competitors. In short, “Kmart is trapped between Wal-Mart and Target, becoming the merchandiser in the middle — and ultimately, the discounter in the muddle. ” On the consumer side, it’s difficult to say Kmart would be particularly missed – since the retailer provides few unique product or experiential offerings – except in geographic areas particularly dependent on the retailer.

On a personal note, while I worked at a Kmart as a teenager, I don’t believe I’ve stepped foot in one in more than decade (nor would have any particular reason to). I do, however, visit Target almost monthly. If yes, can Kmart be turned around? What does the executive team need to do? Here, then, it’s a question again of “Where did Kmart go wrong? ” Let’s take a look at some core areas in which Kmart could generate a turnaround. Strategy, Strategy, Strategy: Kmart failed to see the writing on the retail wall before initially filing bankruptcy in 2002 (and, some would argue, continues to ignores it). All retailers, even discount ones, must have a coherent pricing-and-product strategy in order to appeal to core consumers. As the brand stands now, Kmart offers very little in terms of “must-have” items for any particular consumer segment. • Management “Expansion”: By all accounts, Kmart is an exceptionally insular company, meaning very few outsiders have been brought in to “refresh” the store’s brand.

Consequently, errors in judgment and purchasing have been magnified by continued mismanagement, while fights and fiefdoms have prevented the company from moving forward into the 21st century. Instead of squeezing every last penny from the dying brand, Lampert must insist on reviving both methods and management if Kmart is to reassert its relevance. • Logistics: As a discount player, Kmart has lost nearly every round of the logistics game, from management of its supply-chain to in-store sku measurements. For instance, because Kmart measured potential profitability by gross margin ercentages rather than by sales-per-square, the retailer has and continues to stock higher-margined goods in place of faster-moving products, leading to a decrease in inventory turn-over. Furthermore, inefficient ordering and supply-chain management means everything’s cost more and arrives later than at Kmart’s competitors. Combine these factors, and you get a dying retailer on the brink of disappearing from the American landscape. Like we outlined in “Private Equity May Be Only Way To Save Sears,” “With a market cap of only $3. 5 billion, it wouldn’t be tough to get the financing for a going-private transaction ” for Sears Holdings Corporate. In short, the market is not going to allow a $40B+ asset-based retailer simply disappear. Ergo, once again, private equity may end up being the only answer for what ails these dying retailers. Margaret Bogenrief is a partner with ACM Partners , a boutique crisis management and distressed investing firm serving companies and municipalities in financial distress. She can be reached at margaret@acm-partners. com.

McDonald’s quality service is very evident in every outlet it has all over the world. Arguably, serving its customers in an apt and courteous manner, each customer whenever not satisfied is aptly attended to. This is one standard protocol which is implemented in each McDonald’s restaurant. Each crew member is trained and oriented by the head store manager and its store area managers, in order to be efficient in handling the needs of its various customers. In able to make speedy service possible and to ensure accuracy and security, many fast food restaurants have incorporated hospitality point of sale systems (Ray Kroc, Grinding it out: The Making of McDonald’s, 1977).

This makes it possible for kitchen crew personnel to screen orders place at front counter and drive through at the actual time. Wireless systems allow orders placed at drive through speakers to be taken by cashiers, as well as kitchen personnel. Drive-through and walk through configurations will allow orders to be taken at one register and paid at the succeeding window. Modern point of sale systems can operate on computer networks using a wide array of software programs. Sales records can be generated and remote access to computer reports can be given to corporate offices, managers, troubleshooters, and some authorized personnel.

With this in mind, quality service at McDonald’s is assumed and secured for the betterment of its loyal customers and the company as well. While fast food restaurants usually have a dining area in which customers can eat the food on the premises, some orders are designed to be taken away, and traditional table service is rare. Orders are generally taken and paid for at a wide counter, with the customer waiting by the counter for a tray or container for their food. A “drive-thru” service can allow customers to order and pick up food from their cars.

Nearly from its inception, fast food has been designed to be eaten “on the go” and often does not require traditional cutlery and is eaten as a finger food (Ray Kroc, Grinding it out: The Making of McDonald’s, 1977). Common menu items at fast food outlets include fish and chips, sandwiches, pitas, hamburgers, fried chicken, french fries, chicken nuggets, tacos, pizza, and ice cream, although many fast-food restaurants offer “slower” foods like chili, mashed potatoes, and salads.

The quality service of McDonald’s doesn’t end there. The company gives a premium on each customer’s health in order to reciprocate the loyalty a customer gives to the company. Some of the large fast food chains are beginning to incorporate healthier alternatives in their menu as well. For instance, white meat, snack wraps, salads and fresh fruits are made available. However, some people see these moves as a tokenistic and commercial measure, rather than an appropriate reaction to ethical concerns about the world ecology and people’s health.

McDonald’s announced that in March of 2006, the chain would include nutritional information on the packaging of all its products. Yet amidst the quality service that the company provides, some customers and lobbyists are not contented with what the prominent fast food chain does to suit the various needs of its customers. Because of commercial emphasis on speed, uniformity and low cost, fast food products are often made with ingredients formulated to achieve a certain flavor or consistency and to preserve freshness. This requires a high degree of food engineering, the use of additives and processing techniques substantially alter the food from its original form and reduce its nutritional value.

Wal-Mart

The Wal-Mart Neighborhood Market is chain of grocery stores launched by Wal-Mart in 1998. These stores are designed to be the opposite of vastly enormous superstores. These smaller stores are supposed to entice shoppers with easier parking, less crowded aisles and faster checkout.  Neighborhood Market stores offer a wide variety of products that includes a full-line of groceries, pharmaceuticals, health and beauty aids, photo developing services, and a limited selection of general merchandise. Generally, located in markets with Wal-Mart Supercenters, they supplement Wal-Mart’s strong food distribution network.

As of May 31, 2007, there were 118 Neighborhood Markets in the United States. Yet customer service has also gone downhill in a big way. For instance, a  customer waited over a half hour for someone to come and assist me in the bicycle department, finally leaving because no one could be bothered. One of the cashiers called and called for assistance to no avail. The woman in the infant department, which she believed to be the department head, that wouldn’t even begin to try to get me a price on an unmarked car seat. She told the customer that it must be the same price as another seat which was nearby that was clearly a better quality, more expensive seat.

The Customer feel like the people of this area are being taken advantage of and being treated poorly because of the fact that places to shop are so limited here. Half of the time some people can’t find what they are supposed to be looking for, simply because it isn’t in stock anymore. You can forget about finding any decent shoes. What has happened to the quality at Wal-Mart? I know many people who share my feelings about the way Wal-Mart has become, and many of us are considering paying a little more elsewhere to get the service and quality that we prefer.

Furthermore, their idea of “merchandising” has increasingly gotten so cheap and sloppy. If you’re looking for let’s say sunglasses, don’t dare imagine that they’d all be in the same logical area — they are scattered on strips hung at end of aisles in practically any department. How do they control their inventory? Now their inventory approach would be confidential and unpredictable, after all it is Wal-Mart, not Nordstrom’s. The apathy at Wal-Mart is not proper. You are then left to “fend for yourself” at the “baggage carousel” and hope that you retrieved all your bags, as the next order is already hot on your heels.

With this in mind, some customer would rather shop on Wal-Mart online. This gives the customers a convenient way of shopping with the use of the internet. It is practical for some people who spent most of their time at home. One simply can browse through the variety of products by choosing a category. For customers, this is a hassle-free and not time consuming at all. The customer spares himself from some obnoxious employees that cannot attend to you whenever you need assistance to find a certain product. Yet this is not a solution to the demands of customers. Quality service must be assured in every Wal-Mart store.

The company must set standard protocols for an employee to perform their job in an objective manner. Perhaps, Wal-Mart is not even considering such yet they have quality assurance with the products that they sell. So, why not imply quality assurance with regards to employee-customer relationships? Wal-Mart is like the “McDonald’s” of department stores because they customer satisfaction and quality service are overlooked and not given proper attention by its company executives.

For the employees to perform their job well, the company executives should not hire them simply for the sake of having personnel at their prominent department store.

References

1. Ray Kroc, Grinding it out: The Making of McDonald’s, 1977
2. Wal-Mart 2006 Annual Report, 2006