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Introduction

Increasing sales revenue is the core objective of any organization. All the functional and operational
activities of organizations revolve around attaining this objective. Walmart management is facing a
stagnant sales which is their area of consideration. Despite of being the largest retailer in the world,
spending rate of customers need to be enhanced in order to maintain their highest revenue stream
globally. Management of Walmart Stores Inc. has to take serious decisions to overcome this problem and
decisions should be based on proper research to gain the maximum benefits. Only a properly conducted
research can lead management to be accurately decisive in increasing the sales.

Background to the Research Problem


Walmart stores Inc. is vast chain retail brand of discount stores which is working as an American
multinational retailing corporation. Walmart is retaining the top position in the list of global retailing
brands for a long time period. Walmart starts with a single retail store having the concept of selling more
for less and now owns the status of world’s largest retailing brand owning a chain of hypermarkets,
discount department stores and grocery stores. 11,695 stores of Walmart in 28 countries under 59 banners
are being visited by 260 million customers every week. Sam Walton being the owner of the company
founded it in 1962 and the business was made operational on October 31, 1969 and listed on the New
York stock exchange in 1972. It’s headquarter is located in Bentonville, Arkansas. The company is
operating in different countries under different identities like in USA and Canada it operates as Walmart,
as Walmart de México y Centroamérica in Mexico and Central America, as ASDA in the United
Kingdom, as Seiyu group in Japan and known as best price retail stores in India. Walmart Stores Inc. also
proudly owns Sam’s Club retail warehouses.
Sam’s Cub, an entity of Walmart business is involved in serving small businesses. There are supporting
them to strengthen the American economy because small industries are the backbone of the economic
system. Ensuring the success of small businesses will promise the strengthening of economic system.
They are committed to provide excellent quality products and promising and result oriented services to
them. Apart from these, they also provide entrepreneurs an opportunity to display their offerings by using
Sam’s Club as a showcasing platform. Walmart is also operating online having E-Websites in 11
countries providing its dynamic and super amazing online shopping experience to its customers.

Problem Definition
Walmart stores Inc. being the largest giant in the retailing world is struggling in improving their sales
management. They are facing a stagnant sales over a period of time which is an alarming situation for
their continuous growth. Many factors are residing behind this problem which are under the focus of the
company. Proper identification of problem area will lead management to work accordingly to improve it.
Following problems are being defined by the company management.
1. Flat Income Levels
One major reason of no significant increase in customer spending’s is the flat income levels. The
core customers of Walmart are facing the struggle of coping with less income and fulfilling their
core necessities within the constraints of their earnings. Due to the limited income levels of
promising customers, they avoid indulging themselves in the purchase of extra and necessarily
not much important shopping products. The company has also identified that the savings from
lower fuel prices enjoyed by the customers are not seen in their retail spending which highlights
the difficulty of consumers in managing all the living stuff within the domain of their income
level.
2. Product Assortment
Product assortment means a wide variety of product range the business is offering. Lacking of
Walmart Stores Inc. in offering of different kinds of products in general merchandise, grocery,
private labels, fresh products and others is another major problem being faced by the company.
This needs to be overcome by the organization because lacking in the offering of product
assortment will lead the customers to divert to other brands if their demand is not being answered.
Today’s customers demand is an on stop shop where they find whatever they want without any
hassle and Walmart seriously needs to work on this to retain their core customers from diversion
and attracting the maximum market.
3. Deflating Prices
Prices of core commodities are not always same. The up and down in the prices is a major
determinant in accessing the performance of an organization. Deflation in the prices of basic
commodities like home grocery and food products is of major concern for Walmart. Since,
Walmart is an American based company, change in the value of dollar in foreign countries also
effect the pricing of products. Strengthening of the currency of foreign countries relative to dollar
amount will bring relatively less earnings to the home country which is America.
4. Budget / Time Schedule / Other Limitations
Other problems highlighted are the budget constraints in allocating resources to every operational
and functional activity of the organizations, lacking of management in scheduling the time
appropriately and accessing of the needs and demands of customers and limitations include the
change in the economic strength, inflation and deflation are those factors which are beyond the
control of the organization but can be handled sensibly by the management to gain the maximum
out of it. The policies should be designed in such a way to overcome the constraints and
limitations in the best possible way.

These are some of the highlighting issues that the management came up with to cope up with
the issue of stagnant sales which is a resisting factor in reaching the organizational objectives of
maintaining the ever increasing revenue stream. The proposal contains the qualitative data
analysis that what are the issues and why are they hindering in the prospective growth of sales.
From the identification of core issues, the management problem which is being pinpointed is that
should the Walmart management decrease the wages of their employees in order to increase the
sales.

Literature Review
The stagnant sales of goods compels the management to take decision whether to decrease the salaries of
the staff in order to minimize the cost which will help in boosting the sales. This strategy may put the
management in another problem because reduction in salary may elevate the issue of employee turnover.
So now the scenario is that the management of Wal-Mart wants to ensure the job satisfaction of its
employees while reducing their salaries.
Employee motivation for the better performance in any industry, company or sector is important because
an employee is directly get influenced by the motivation to satisfy the esteem and self-actualization level
(Nurun Nabi, 2017). As per the job satisfaction theory of Herzberg: recognition, responsibility and
opportunity are the factors that determines the motivational level of an employee. Sometimes the
monetary factors do not matters a lot because the importance of the monetary factors is defined by two
factors: situational variable (e.g., variability of pay) and individual variable (e.g., level of performance)
(Sara L. Rynes, 2014). The previous researches have shown that there is weak relation between the job
satisfaction and the pay of employees. There is only 2% overlap between pay and employee’s satisfaction
level. If the engagement of workforce is required then money is not the only answer. In fact, if someone
says that for the motivation of an employee, pay is not the answer. In a nutshell: money does not ensure
the 100% engagement of employee. So the company can reduce the salary of its employees by gently
compensating them in different ways (i.e.) annual bonuses, family dinners and medical allowances.

The management of Wal-Mart is also looking for the product assortment to increase their sales. Product
assortment refers to the categories and differentiation of products displayed by the retailer for selling to
consumers on stores and outlets. There are two things in product assortment: the depth of products (how
many variants of a product is available) and the width of product (how many categories of a product a
store carries). Recent studies have shown that the retailers can reduce product assortment with little or no
loss is sales. One of the Food Marketing Institute study found no visible loss is sales after reducing in
SKUs. One of the researcher Dreze et al found that the sales even went up nerdy 3% in eight experimental
categories after the experimenters have eliminated 15% of the slow selling items. The current trend in
consumer behaviors have shown that no change in sales of goods have been occurring by reducing the
product assortment (Sharad Borle, 2005). These studies may have shown little or no effect of reducing the
assortment on sales but at the same time it doesn’t mean that by increasing the product diversification you
cannot attract more customers. Some real life cases in which we have seen a significant increase in sales
after management has implemented the strategy of product diversification. The basic assortment decisions
include issues such as the size, breadth and the depth of available product lines, the category of the item,
the relative properties of the items, pricing strategy and the variety of products available over time
(Chernev, 2012). When the assortment strategy is implemented by the management the consumer may
acquire more information from the more products but the management has to sacrifice over the attributes
of the product. This sacrifice also effect the secondary attributes of the product whereas the primary
attributes remain same. This shows that product assortment has very minor impact over the information
search. The implication of product assortment strategy helps the consumer to make choice rationally as
per their needs and requirements (Krisztina Rita Dornyei, 2015)

The 2nd challenge they are facing is the due to deflation. These price fluctuations are pressurizing the
management in their day to day merchandize (i.e.) food. Deflation impacts the customer in a positive way
in short run as it increases the purchasing power of the consumers as prices falls but foster a negative
impact in the long run. This situation may benefit the consumers but it effects the profit margins of a
retailer adversely. The management of Wal-Mart is now under pressure to handle this situation while they
are already facing an issue of stagnant sales. When the prices are expected to go down the consumer will
often delay purchases, waiting for products to be available at lower rates, so the falling demand cause the
prices to drop further. This also effect the circulation of money in the economy which also hinders the
growth. Deflation becomes a threat when an economy started to experience low levels of growth. The
deflation may affect the variety of prices such as services, energy and non-energy industrial goods. It
normally erupts in the phase of unemployment, stagnant sales and falling labor rates. This high
unemployment phase reduces the buying power of employees and lead the sales of products to decline.
The lower prices and profit margins can result in limited cash flow which then puts a company to reduce
or postpone the hiring process. Deflation arisies when consumers limit their spending as they expect that
prices may continue to fall particularly in the phase of unemployment (Quising, 2002). The problems of
deflation can be countered by making development in monetary system. Deflation effects the debtors and
creditors in opposite way, as the prices of goods and services falls, the real value of money increases.
Consequently, the value of debts and such services rises. Therefore there is a potential favor for the
creditors and a growing real value of debt for the debtors. This situation of the economy is not definitely
bad for the financial structure of a state. However the increasing cost to debtors may increase the level of
loan defaulters as the value of collateral falls, which threatens the stability of an economy.
Getting a firm control over the financial structure can may reduce the fear piled up by the deflation. As
Francis says we cannot control each and everything in our life but we can control what we spend. Setting
specific financial objectives as per the possible alterations in the financial systems can may help you to
manage through the negative impacts of deflation without any considerable loss
Save for specific financial goals by setting up automated transfers from your main bank account to a
second account. Money in the second account can be earmarked for specific goals, such as college funds
for your children, a retirement nest egg or vacation money.
Reference

References
Chernev, A. (2012). Product Assortment and Consumer Choice:. Foundations and Trends In Marketing, 6.

Krisztina Rita Dornyei, A. K. (2015). The impact of product assortment size and attribute quantity on
information searches. Journal of Consumer Marketing, 34, 191-201.

Nurun Nabi, I. M. (2017). Impact of Motivation on Employee Performances. Arabian Journal of Business
and Management Reviews.

Quising, D. H. (2002). Dangers of Inflation.

Sara L. Rynes, B. G. (2014). THE IMPORTANCE OF PAY IN EMPLOYEE. Journal of Human Resource
Management,, 43, 4.

Sharad Borle, P. B. (2005). The Effect of Product Assortment. Journal of Marketing Science, 24, 4.

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