Want to know more about Walmart problems and solutions? This essay about Walmart issues describes the current challenges faced by the company and its employees.
Introduction
Walmart is an American retail corporation established in 1962 by Sam Walton. It operates large chains of department stores and warehouses selling products at discounted prices (Kneer 21). It is the third largest publicly owned corporation in the world. It operates in several countries, including the United States, Brazil, Argentina, and Canada. Walmart has been on the receiving end for a long time, mainly because of its menial treatment of employees (Kneer 22).
Reasons such as low wages and low prices have been cited as reasons why Walmart has developed an allegedly negative reputation. However, analysts have argued that Walmart has an overall positive effect on the economy and lives of people despite criticisms (Kneer 53). It employs over 2 million workers and is the largest private employer in the world.
Challenges Faced by Walmart
Walmart encounters several problems that include stiff competition, a negative reputation, constraints in business acquisitions and joint ventures, and stringent cultural values in foreign markets (Kneer 25). There is stiff competition from other retail stores that have adopted a low-price strategy.
For example, they are facing stiff competition in North America, Canada, and Mexico. Their competitors include ShopKo, Giant Tiger, Soriana, Costco, Meijer, Kmart, and Commercial Mexicana, among others (Kneer 27). Small grocery and retail stores have successfully competed with Walmart and established their niche in several regions. In addition, competition in foreign markets is stiff.
For example, it has only been able to dominate 2 % of the German food market owing to stiff competition from other established retailers and grocery stores (Roberts and Berg 29). Stiff competition was the reason that Walmart halted its operations in South Korea. After entering the South Korean market in 1998, Walmart was unable to dominate the market and, as a result, withdrew in 2006.
Walmart has to deal with a negative reputation that stems from its low wages, low prices, and sexual exploitation. Several cases of employee exploitation have been reported. Sex discrimination is rampant in all its stores globally. The issue of sexual exploitation has made it difficult for Walmart to expand to certain countries that have strict cultural values and traditions (Roberts and Berg 33). This issue has caused management problems that have stalled their expansion program.
Moreover, low wages have created a bad reputation for the retailer. Even though they offer employment to millions of people, their wages are so low that they can hardly sustain workers with big families. The corporation’s management has been reluctant to increase wages. Other problems include strict government regulations in foreign markets, strained relationships with suppliers, cultural differences, and difficulties in the acquisition of other businesses (Kneer 31).
Walmart Issues: Strategic Analysis
Walmart adopts a low-cost and high-volume strategy (Roberts and Berg 45). The basic principle of the strategy is to satisfy customers by offering low prices and exceptional customer service.
The retailer is able to offer low prices because its operating costs are lower than the standard industry costs. Its superior distribution channels give it an advantage over its competitors (Roberts and Berg 46). It is able to achieve exceptional customer service because of low prices, a motivated team of employees, and a highly developed data management system.
The management ensures that the corporation gains market advantage by offering a wide range of products to customers (Roberts and Berg 46). Therefore, Walmart gives an opportunity for customers to do their shopping under one roof. Their operational strategy includes offering their services in different countries in the world. For example, it operates approximately 4,000 retail stores in the US alone.
It is changing its operations strategy by converting some of its retail stores into supermarkets to offer a wider range of products (Roberts and Berg 47). In addition, it is expanding its operations by opening small retail stores in urban areas. It has turned to social media and technology to reach more customers and market its stores.
Ethical Challenges Faced by Walmart
Walmart faces several ethical and sustainability issues. There have been cases of sexual and gender discrimination in several stores across the world. In addition, it has been accused of suppressing employees’ efforts to form unions (Roberts and Berg 55). The management is afraid that if it allows the formation of unions, employees will fight to have wages increased. It is unethical to pay low wages despite the high revenue that employees generate for the corporation. Walmart also faces several environmental sustainability issues.
These include offering customers products that support environmental sustainability and conservation and promoting the use of renewable energy (Roberts and Berg 57). It is necessary for the corporation’s management to address these issues in order to guarantee its sustainability in the international market. It has three goals to address its sustainability in the market. These include using renewable energy in its stores, producing zero waste, and selling products that do not pollute the environment (Roberts and Berg 58).
Possible Solutions for Walmart Issues
Walmart should focus its efforts on improving its Human Resources in order to fight the negative image resulting from sexual discrimination. To improve its presence in foreign countries, it should improve its image. An improved image will enable it to enter foreign markets easily.
This will also involve addressing ethical issues that the corporation encounters. For example, it should consider increasing wages and facilitating the formation of unions by employees. Another necessary change would be to focus more on sustainability. Many countries have strict environmental sustainability policies.
The corporation should make sustainability its priority in relation to its operations. Its operations and products should promote environmental conservation and sustainability. Finally, the corporation should consider expanding to smaller regions to reach more customers. This could include opening small retail stores in areas populated by low-income earners. This will grow its customer base, improve productivity, and increase revenue and market presence.
Conclusion
Walmart is one of the largest retail corporations in the world that has been in existence since 1962. It has faced many challenges and has overcome many problems to become the largest private employer in the world. Problems faced by the corporation include a negative reputation, environmental sustainability issues, stiff competition, government regulation in foreign markets, and cultural differences. Its operational strategy has enabled it to dominate the retail market for a long time.
Walmart adopts a low-cost and high-volume strategy. The basic principle of the strategy is to satisfy customers by offering low prices and exceptional customer service. The retailer offers low prices and quality customer service. Walmart should consider increasing wages, encouraging workers’ unions, and promoting environmental sustainability in its operations. This will effectively enhance its stature as a retail giant in the global market.
Walmart Problems & Solutions FAQ
- What Problems Is Walmart Known for?
The key problems of Walmart are those connected to product quality and workforce. Over 2 million Walmart employees face the company’s strong anti-union policies, together with low wages and poor working conditions. - What Ethical Issues Is Walmart Facing?
Being the world’s largest private employer, Walmart still faces a range of ethical issues. Those most current involve the company’s employees: they face exploitation, gender discrimination, poor working conditions, and inadequate healthcare. - How Walmart Overcome Its Cultural Issues?
Being one of the most successful US companies, Walmart didn’t manage to succeed in other countries, like Germany, Japan, and South Korea, due to cultural factors that didn’t let the retailer capture local markets.
Works Cited
Kneer, Christian. The Walmart Success Story. New York: GRIN Verlag, 2009. Print.
Roberts, Bryan, and Berg, Natalie. Wal-Mart: Key Insights and Practical Lessons form the World’s Largest Retailer. New York: Kogan Page Publishers, 2012. Print.