Fin 370 Week 1 Strategic Initiative Paper Fin/370
1
Strategic Initiative Paper
Walmart
FIN/370
2
Strategic Initiative Paper
Companies have to develop a plan both long term and short term. This is necessary for corporations so they are able to budget and know exactly what there goals are and how they plan to achieve them. They set target points and come up with methods to achieve the targets and goals. A company has to know who their competition is and how they plan to beat them and what methods they have to use in order to accomplish this. The company has to also know why it wants to get to a specific goal? What implications will follow? Such planning is called a strategic plan. A strategic plan is the brain of an organization and the voice that creates the company culture. Strategic planning is …show more content…
the “why” in a company that keeps the operations going. Once the
“why” is realized then obtaining the “how” will follow once the outline of the plan is developed.
The “how” is also known as financial planning. This is the step in which a corporation has to outline the details of the strategic plan. These are the details that will determine the company’s success. Details such as financial requirements, staffing needs etc. The allocation of money, employees and equipment is the financial plan needed to obtain the strategic plan. A company decides how much money, employees and equipment is needed by analyzing current performance against past data and estimate such performance on estimated future desires.
Almost every business faces some type of risk, especially when launching new company projects. The risks associated with the initiative of Wal-Mart can derive from internal factors. An internal factor such as having an accountant who makes errors in record keeping can cause WalMart investors to be misled. Another risk is managers who have heavy workloads; these
3
managers are likely to make mistakes that can hurt the success of Wal-Mart. The cost to implement a project that will improve the success of Wal-Mart will affect the company’s revenue and shareholders.
In the year 2014, Wal-Mart started a project that was aimed at enhancing its organization ethics and financial controls. The Wal-Mart Corporation spent $109 million dollars to improve its worldwide anti-corruption training program and financial controls. According to Chapter 13, page 410 of Financial Management, “Forecasts are made by humans who can be either too optimistic or too pessimistic when making their cash flow forecasts.” Nevertheless, the risk of the Wal-Mart organization spending this money ($109 million dollars) is that financial managers may still engage in unethical activities. The revenue that was spent on the worldwide anticorruption training program had an impact on the amount of dividends that was paid to Wal-Mart shareholders. Perhaps, shareholders would have been paid more dividends if Wal-Mart had chosen not to launch the improvement of its anti-corruption training program.
In Wal-Mart’s annual report for last year it shows that they have set forth a plan to be more focused on their customer’s wants and needs. They have decided that they want to look closer at all of the feedback they have been getting from their customers and see what they can implement into the daily workings of the company so that the customers will have a more enjoyable experience when they are dealing with Wal-Mart. “For example, customer insights led the Wal-Mart U.S. team to expand our Black Friday 1-Hour Guarantee program this past year, and innovative systems enabled successful execution and on-time product delivery.”
(McMillon, D. 2014)
When it comes to cost they have had to spend a bit of money in order to adapt certain changes that needed to happen company wide, but the money spent was to benefit the
4
company. They had to invest money in e-commerce not only in the U.S. but also globally to ensure that they can stay competitive in that field. “Global e-commerce saw strong growth in fiscal 2014, with a 30 percent increase in sales.” (Holley, C. 2014) This proves that the money they have invested in growing their e-commerce business is having a positive effect on the company as a whole.
Their total capital expenditures for 2014 was $13,115 this not only included e-commerce but them also building new stores and expanding their business locally and globally.
Being a large company as Wal-Mart, it is extremely important that there are strategic plans in place to keep cost down. Some of the ways in which this can be achieved are as followed: Consider Resource Acquisition: In the event that Wal-Mart as a whole or particular sites made the decision not to expand any further to cut cost it would be wise for them to acquire other businesses. Starting their own distribution system can assist with cost because it will allow them to buy from manufacture directly.
New Policies: Cut cost by coming up with a plan to limit travel reimbursements such as transportation lodging and meals.
Shipping and Freight: Negotiate pricing with multiple carriers. In other words companies that Wal-Mart has done business with for many years, inquire about loyalty rates.
Ask for special seasonal discounts. Using the packaging that is provides by the carriers are sometimes a lot cheaper meaning more money for Wal-Mart to do other things. (In a
Business mind- have the customer absorb more of the
cost).
5
Labor Cost: In an attempt to save on labor, Wal-Mart, can select their tenure associates or selected associates by whatever metrics and train them on different training so that they would not seek sources outside of the company, in which they would have to pay.
Wal-Mart in their 2014 Annual Report and meeting gave many ideas of where they wanted to see the future of the company moving. CEO Doug McMillon stated that in a very competitive world we currently live in it was important to always be focused on what the needs of our customers are and how can we serve them. The four parts that they based their planning on was that of price, assortment, experience and access. McMillon went on to state that the customers experience is important for the customer to have so that they could continue to frequent the store. Price was probably the biggest factor to the customer. In a very changing economic world Wal-Mart will strive for best price on all possible needs of their customers along with a experience that the customer leaves feeling not that they went to the store on the corner but was more of a family outing to acquire the weekly or monthly necessities of the family.
Wal-Mart also believes that the access of brick in mortar stores was important to their customer base but, also that the evolution of technology has grown to develop through social media outlets and internet. This would allow customers to shop online from their offices, homes and get the convenience of not having to miss events or the important meeting while taking care of their family. Wal-Mart believes that by following this simple 4 step plan they can continue to grow the Wal-Mart brand and keeping it in front of the consumer all while providing the service and competitive price that all of us have come to know as “The Lowest
Price Everyday”
6
References
Chapter 13, page 410 of Financial Management; Authors: Sheridan Titman, Arthur J.
Keown, and John D. Martin; 2014
Customer influence. McMillon, Doug. 2014 Annual Report. Retrieved from http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf E-commerce growth. Holley Jr., Charles. 2014 Annual Report. Retrieved from http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf Entrepreneur Media, Inc. (2014, March 2). Retrieved from Entrepreneur Media, Inc.: www.entrepreneur.com walmartstores.com/sustainability
Strategic Initiative Paper
Walmart
FIN/370
2
Strategic Initiative Paper
Companies have to develop a plan both long term and short term. This is necessary for corporations so they are able to budget and know exactly what there goals are and how they plan to achieve them. They set target points and come up with methods to achieve the targets and goals. A company has to know who their competition is and how they plan to beat them and what methods they have to use in order to accomplish this. The company has to also know why it wants to get to a specific goal? What implications will follow? Such planning is called a strategic plan. A strategic plan is the brain of an organization and the voice that creates the company culture. Strategic planning is …show more content…
the “why” in a company that keeps the operations going. Once the
“why” is realized then obtaining the “how” will follow once the outline of the plan is developed.
The “how” is also known as financial planning. This is the step in which a corporation has to outline the details of the strategic plan. These are the details that will determine the company’s success. Details such as financial requirements, staffing needs etc. The allocation of money, employees and equipment is the financial plan needed to obtain the strategic plan. A company decides how much money, employees and equipment is needed by analyzing current performance against past data and estimate such performance on estimated future desires.
Almost every business faces some type of risk, especially when launching new company projects. The risks associated with the initiative of Wal-Mart can derive from internal factors. An internal factor such as having an accountant who makes errors in record keeping can cause WalMart investors to be misled. Another risk is managers who have heavy workloads; these
3
managers are likely to make mistakes that can hurt the success of Wal-Mart. The cost to implement a project that will improve the success of Wal-Mart will affect the company’s revenue and shareholders.
In the year 2014, Wal-Mart started a project that was aimed at enhancing its organization ethics and financial controls. The Wal-Mart Corporation spent $109 million dollars to improve its worldwide anti-corruption training program and financial controls. According to Chapter 13, page 410 of Financial Management, “Forecasts are made by humans who can be either too optimistic or too pessimistic when making their cash flow forecasts.” Nevertheless, the risk of the Wal-Mart organization spending this money ($109 million dollars) is that financial managers may still engage in unethical activities. The revenue that was spent on the worldwide anticorruption training program had an impact on the amount of dividends that was paid to Wal-Mart shareholders. Perhaps, shareholders would have been paid more dividends if Wal-Mart had chosen not to launch the improvement of its anti-corruption training program.
In Wal-Mart’s annual report for last year it shows that they have set forth a plan to be more focused on their customer’s wants and needs. They have decided that they want to look closer at all of the feedback they have been getting from their customers and see what they can implement into the daily workings of the company so that the customers will have a more enjoyable experience when they are dealing with Wal-Mart. “For example, customer insights led the Wal-Mart U.S. team to expand our Black Friday 1-Hour Guarantee program this past year, and innovative systems enabled successful execution and on-time product delivery.”
(McMillon, D. 2014)
When it comes to cost they have had to spend a bit of money in order to adapt certain changes that needed to happen company wide, but the money spent was to benefit the
4
company. They had to invest money in e-commerce not only in the U.S. but also globally to ensure that they can stay competitive in that field. “Global e-commerce saw strong growth in fiscal 2014, with a 30 percent increase in sales.” (Holley, C. 2014) This proves that the money they have invested in growing their e-commerce business is having a positive effect on the company as a whole.
Their total capital expenditures for 2014 was $13,115 this not only included e-commerce but them also building new stores and expanding their business locally and globally.
Being a large company as Wal-Mart, it is extremely important that there are strategic plans in place to keep cost down. Some of the ways in which this can be achieved are as followed: Consider Resource Acquisition: In the event that Wal-Mart as a whole or particular sites made the decision not to expand any further to cut cost it would be wise for them to acquire other businesses. Starting their own distribution system can assist with cost because it will allow them to buy from manufacture directly.
New Policies: Cut cost by coming up with a plan to limit travel reimbursements such as transportation lodging and meals.
Shipping and Freight: Negotiate pricing with multiple carriers. In other words companies that Wal-Mart has done business with for many years, inquire about loyalty rates.
Ask for special seasonal discounts. Using the packaging that is provides by the carriers are sometimes a lot cheaper meaning more money for Wal-Mart to do other things. (In a
Business mind- have the customer absorb more of the
cost).
5
Labor Cost: In an attempt to save on labor, Wal-Mart, can select their tenure associates or selected associates by whatever metrics and train them on different training so that they would not seek sources outside of the company, in which they would have to pay.
Wal-Mart in their 2014 Annual Report and meeting gave many ideas of where they wanted to see the future of the company moving. CEO Doug McMillon stated that in a very competitive world we currently live in it was important to always be focused on what the needs of our customers are and how can we serve them. The four parts that they based their planning on was that of price, assortment, experience and access. McMillon went on to state that the customers experience is important for the customer to have so that they could continue to frequent the store. Price was probably the biggest factor to the customer. In a very changing economic world Wal-Mart will strive for best price on all possible needs of their customers along with a experience that the customer leaves feeling not that they went to the store on the corner but was more of a family outing to acquire the weekly or monthly necessities of the family.
Wal-Mart also believes that the access of brick in mortar stores was important to their customer base but, also that the evolution of technology has grown to develop through social media outlets and internet. This would allow customers to shop online from their offices, homes and get the convenience of not having to miss events or the important meeting while taking care of their family. Wal-Mart believes that by following this simple 4 step plan they can continue to grow the Wal-Mart brand and keeping it in front of the consumer all while providing the service and competitive price that all of us have come to know as “The Lowest
Price Everyday”
6
References
Chapter 13, page 410 of Financial Management; Authors: Sheridan Titman, Arthur J.
Keown, and John D. Martin; 2014
Customer influence. McMillon, Doug. 2014 Annual Report. Retrieved from http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf E-commerce growth. Holley Jr., Charles. 2014 Annual Report. Retrieved from http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf Entrepreneur Media, Inc. (2014, March 2). Retrieved from Entrepreneur Media, Inc.: www.entrepreneur.com walmartstores.com/sustainability