In the present world, knowledge plays a pivotal role in economic processes. Those organizations with enough knowledge have a competitive advantage over those with less. In an economy that is knowledge based, innovation plays an essential and central role. An organization can maintain competitive advantage through quality and price (Francis, Bessant, & Hobday, 2003). Organization does innovation in order to defend and maintain their competitive stand and to seek their competitive advantage (Francis, Bessant, & Hobday, 2003).
Innovation is the heart of economic change; it shapes the momentous changes in the world and fills in the process of change continuously. It turns ideas and knowledge into products and services. The stumbling block of innovation is management innovation. The present management systems that are in place in every firm today develop over the last 160 years. The dynamic business innovation transforms by management innovation and as a result, business models and practices, can meet challenges of change. The ability to spot new opportunities and create new better strategies is the heart of every management innovation (Genus & Cloes, 2006).
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Walmart is the largest stores in the United State of America, and one big chain store the world. It operates more than 4,000 retail store globally. On top of this, company is a dominant retail in Mexico, Canada, and United Kingdom. A survey by Fortune 500 index shows that Walmart is the richest and most powerful corporation in the world. It holds the number one when ranked by its total sales. It is the second most admired company in the world (Vance, Sandra, & Roy, 1994). The company provides diverse merchandise ranging from household needs, electronics, toys, fabrics, jewelery and shoes, crafts, family apparel, lawn and garden. It also runs a pharmacy department and photo processing center (Vance, Sandra, & Roy, 19 Product innovation.
Walmart examine the life cycle of their products and the supply chain try to make products that are sustainable from farm to the shelf. They work with the research consortium who delivers research findings, metrics and reporting system. This assists Walmart to engage suppliers so that they understand the products they sell. In 2011, the company used the metrics from the research firm to develop an index for six products. By engaging research results and integrating them into the core merchandise processes, will help transform their products to better suit customers' needs. In my own view, this is a product innovation process because the company will use research findings to improve on their products.
Furthermore, their supply chain, which is transparent, is also one of the product innovations. Walmart implemented an information system that is transparent. For example, when scanning the band-aid at the register, the information sent Walmart D C and also to suppliers. This will give information to suppliers, and are able to know the amount to ship out. These have reduced time, labor and paper work. The supplier forecast demand and plan production hence greater efficiencies.
2.0 The Wal-marts' Market Management
The success and growth of any organization entirely depends on how the market is penetrated and controlled. An organization may win by producing and delivering product that are of high quality than those of their competitors. Products and services that exceed customer's expectations ought to be delivered. This is because a customer compares the product bought with those of other companies and take into consideration the opportunity cost the will be derived from the product. There are various strategies that Wal-mart employed in the market so as to overcome challenging market environment and be on the top in the industry. These strategies are enumerated below:-
2.1 The employees and customers Expectation
The studies conducted on customer research suggest ideas and concepts that are to be used in order to get the target customers (Lovelock et al, 1996). This is of great importance as it assists in providing essential products and services based on customer's wants and perceptions (Kotler 1999). On the other hand, a good working environment in the workplace enables employees to come up with creative ideas that are brilliant. This will enable them come up with new innovative ideas that will in the long run result in products that are unique. If a leader leads the way and provide and enabling climate in the workplace, employees will bring out a new ideas, thoughts, concepts, designs, or processes that will revolutionize existing products and services. Wal-mart has remained at the top due to the strong beliefs they uphold:
Always on Time
Marked to Standard
Respect: This calls for exercising respect for all individuals who are both the employees of the company and the customers. This has resulted in the attraction of peoples of different economic and social background.
Better services to all: Wal-mart developed the commitment to deliver the best to its customers in which ever store. They uphold this by keeping the pricing policy the same across all branches and to maintain it as low as possible.
Excellence and uniqueness: The strive for excellence have been maintained by expanding, innovating new products that are superior and unique, and reaching further to new markets (Vance, Sandra, & Roy, 1994).
The Sundown Rule: This is a directive from the top management to all employees. The directive requires that any employees must answer the customer request or the supplier within 24 hours. The Ten Foot Rule: This is also another directive that any employee who is at a distance of 10 feet to a customer must welcome, beam, and listen to a customer in a store. This is a hospitality policy that is aggressive and compels staff to engage in cheerfulness. The Wal-mart company develops its staff to flourish in the working environment. Every member of staff stick to the irrespective of ranks they have been given. This gives freedom to staff so that they can have the confidence to challenge, question, and suggest ideas as part of a group with a common objective unconstrained by day-to-day operational environment (Cooper, 2001).
2.3 Market Segmentation
In the every market environment, customer's needs and wants are diverse; therefore an organization will not be able to supply an entire market for a particular product or service. It is therefore compelled to identify division of a market that it can effectively serve (Kotler, 1999). Locally Wal-mart is the largest US retailer. It has over 3,000 stores, and 77 distribution centers serving over 100 million customers. In my own view, I see this as market segmentation because Wal-mart started small but gradually developed with time to what it is today setting up new branches in every part of the globe. In those branches products are unique in that they deal with diverse products. There have been changes in the way in which products produced and supplied to customers. The aim is to occupy every segment of the market so that they can meet all the needs and want of its customers. Its expansion globally has been aggressive and dynamic in the sense that their products are unique in every step of the way. So the process, they undertook to diversify, expand, and innovative as there is no firm that is able to compete with Wal-mart.
When a market segment has been identified, the next step is to put in place the product in the market. The design of the position in the market will have an impact in the customer's minds (Ziethmal et al, 1996). The customers will compare this with the competitors of a particular product in the market. Walmart has an elaborate, efficient supply chain system. They have combined supply chain, technology, and services. This has changed customers' shopping behaviors, suppliers, and employees. Suppliers are able to forecast and the demand of items required and are able to arrange and plan for products in advance. They achieved this through effective positioning strategies; managers had insights of how various attributes of markets are treasured by the existing and potential customers within that division. Wal-mart examination and contribution is successfully situated and has established and maintained a characteristic place for itself in the consumer's mind in relation to competing organization's offerings. If a product is successfully positioned, the declaration of the service will summon up in the customer's psyche an image that is different from descriptions of similar product contributions (Ziethaml et al, 1996).
This is the way of doing business that aims at maintaining and improving current customers and acquiring new ones. The relationship between the customers and the firm is maintained through quality service, commitment, and innovation (Lovelock et al, 1996). The strategy used in Wal-mart is to dominate every sector of the business and sell goods at low process, outsell competitors and expand. Typical Walmart model is to build stores, make existing stores bigger, and dominate its competitors. In every step, the company works hard to make a profit and remain on top of its competitors, to a point of shunning some of them out of business (Francis, Bessant, & Hobday, 2003). The organization uses its size, financial stability, and resources to dominate retail. This transform to effective use of strategy whether operating locally, or acquiring another retail chain in another country. The size and power of the company allows it to achieve its goals (Vance, Sandra, & Roy, 1994).
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Their strategy is clear and direct. Sam Walton on 1960 lay down it and refined over decades. The company is proud of it and incorporates it within its advertisements. The message of the company by the CEO is consistent and has been so over time. Scott Lee in his annual speech repeated the main message of the firm, repeating the culture of the organization as explained by founder Sam Walton. There is an emphasis of selling less, respecting employees and communities, and expanding (Francis, Bessant, & Hobday, 2003). The company manager strives to create and sustain a culture in which innovation can flourish. Whenever they entered into a market, they set up physical and organizational space. We can see that they capture an area by putting up building and making it stands out among the rest (Francis, Bessant, & Hobday, 2003).
3.0 Paradigm innovation.
As the world is changing rapidly, business as usual in organizations is no longer an option. Managers are adopting new approaches that are friendly to the environment and society. They adopt deep, systemic change. Walmart is not an exception. They are developing and selling products that are environmentally friendly. For instance, in one of the stores they sell green light bulbs. This is a product that consumes little energy. By adopting this product, they are promoting the fight against global warming, which is, a great challenge on the globe.
4.0 Competitive Strategy.
The strategy used is to dominate every sector of the business and sell goods at low process, outsell competitors and expand. Typical Walmart model is to build stores, make existing stores bigger, and dominate its competitors. In every step, it takes the company works hard to make a profit and remain on top of its competitors, to a point of shunning some of them out of business (Francis, Bessant, & Hobday, 2003). The organization uses its size, financial stability, and resources to dominate retail. This transform to effective use of strategy whether operating locally, or acquiring another retail chain in another country. The size and power of the company allows it to achieve its goals (Vance, Sandra, & Roy, 1994).
Their strategy is clear and direct. Sam Walton on 1960 lay down it and refined over decades. The company is proud of it and incorporates it within its advertisements. The message of the company by the CEO is consistent and has been so over time. Scott Lee in his annual speech repeated the main message of the firm, repeating the culture of the organization as explained by founder Sam Walton. There is an emphasis of selling less, respecting employees and communities, and expanding (Francis, Bessant, & Hobday, 2003).
The company manager strives to create and sustain a culture in which innovation can flourish. Whenever they entered into a market, they set up physical and organizational space. We can see that they capture an area by putting up building and making it stands out among the rest (Francis, Bessant, & Hobday, 2003).
5.0 Innovation Strategy.
In order to keep at the breast with other competitors in the market, the firm adopted the steady state archetype where the manager guided the organization to take strategic position that highly depended (Francis, Bessant, & Hobday, 2003). They also utilized decision making by allocating resources to the basis of risk management and operate with a set of routine and structures that embedded them (Cooper, 2001). In order to cope up with the innovation change, a wide range of potential targets for innovation set up. They diversify to different, new sectors of the market. Networks put up various parts of the region and expanded globally. In every sector, they encouraged competitiveness within themselves (Tidd & Bessant, 2009). For example, Walmart has a history of exploring future options and driving innovations. Most recently, through research the company assessed the market. This provided a focal point for various, diverse kinds of goods which might form and generate future goods and services (Cooper, 2001).
I think that implementing an innovation strategy ensures that core competencies aligned with organizations' objectives and goals because communication is the core competence, commitments, and dedication. This applies to all organization boundaries. It is also beneficial in accelerating changes, quick acceptance, and new products adoption.
Firms that manage works have a greater chance of succeeding in an aggressive successful business setting. Managerial control in organizations accomplished through the implementation management innovation strategies. Prudent management rules, proper structures of the organization, tools of the project and project techniques that are in line with the project scope and risks must be put in place.
Management novelty though requiring much effort to embrace quickly is a process. Organizations need to react favorably and adopt to change quickly so as to remain relevant in the competitive environment. Managers and its employees need to work together as a team. The manager must create a conducive environment for innovation where every member has freedom. This way, ideas suggested and adopted. Model of innovation leadership must be embraced. This allows building on past work and adding some perspective from the field of change and innovation. Change is inevitable; therefore, managers must respond to change.
In my own view, I see Walmart's innovation strategy as unique and 'SMART'. The reason is that it is specific, measurable, attainable, and timely. It is specific because they venture into a particular market, establishes, and compete. In their innovation strategy, targets that are measureable and attainable are set. We can see this in the way they produce a product for a specific market for example, the green bulb. This is a section dealing with energy saving bulbs. In the present day world where everybody is encouraged to go green so as to curb global warming, Walmart have curved the niche setting measurable and attainable targets. On the other hand, I see it also as real and timely. When I use the same example, the introduction of the green bulbs came in handy with the environmental concerns which everybody young and old are embracing. This in itself is an innovation of responding to change in the environment and at the same time grow in business.
The lesson I can learn from Walmart's innovation strategy is that as an entrepreneur and an innovator, one need to think big, respond to changes rapidly, and travel the road of achievement as a team. The reason is that one need to see a broader perspective of issues, come up with new ideas as a team, and implement them to reality.
My recommendation to Walmart is that besides their supply chain information system that is efficient and effective, they need to focus on online systems where customers are able to inquire, purchase products, and deliver these products to customers at their door steps on within 24 hours. On the other hand, customers are able to pay online with their master card. The information system must be one that can show case all Walmart's products online without jamming. This calls for their own independent and secure information system, competent expert with high integrity virtues.