Strategic Management Concepts Definition And Models Commerce Essay

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Strategic management can be defined as a process or a rule which is enabled for decision making process which is been influenced by the synergy of the market, scope of the market, growth ,opportunities, competitors edge and competitive advantage of the corporation in the market.(Ansoff 1965)

It means a process of action developed by the organisation in order to work collectively towards the goals and by taking qualitative decisions for the betterment for the business. The strategic decision techniques are being influenced by the mission and vision of the organisation which help the organisation to make strategies and motivate them to implement them successfully. It includes the long term strategies as well as short strategies of the organisation.

Strategic Management Process Model

The above figure helps to understand the five main components of Strategic management process

The main component of strategic decision is mission and vision of the company as they are two main fundamentals in which the strategic decision making is been analysed and developed further

A brief analysis of the organisations external competitive environment needs to be analysed to identify the threats and opportunities in the market. It is one of the main factors of the strategic formulation process.

It is necessary to identifying the internal operational process to identify the various opportunities and threats within the company to realize the organisational internal strength as well as weakness for strategic decision process.

The strategic formulation process consists of building up the strategies of the organisation keeping the strength of the organisation and correcting the weakness if any to implement the strategies successfully.

The final process is to implement the selected ways and decisions taken to reach the final goal or objective. Also it is important to remember the continuous evaluation of the implemented strategies to be effective in nature.

The above analysis model has helped to understand the overall idea and concept of strategic management and its importance in a business corporation.

Wal-Mart: A Retail Giant and Its Market Share in the Global Retail Industry


Wal-Mart is been known very commonly in the world largest retail corporation in the global market. It is an American Originated corporation founded by Sam Walton in the year 1962. The company was incorporated in the year 1969 which was later listed in the NYSE in the year 1972. The company is also listen in the worlds largest stock markets like NASDAQ, FTSE 100,etc The group is one of he top corporations of the Fortune 500 companies and Sam Walton is the richest group owner in the Forbes List. It also operates under the brand of Sam Club for a range of warehouses and logistics. The company also have its operation in the other International Market. The company was the largest in comparison with other corporations in the year 2010for highest number of sales and revenue in the entire global market. The company have its headquarters based in Bentonville Arkansas and is also known as the largest employer providing the highest number of job opportunities in the United States of America. In the year 2010 the company recorded sales for worth $408 billion worldwide which includes its chains in the states as well as other International Brands operating under the brand name Wal Mart. (Annual Report 2009-10)

The company operates with 8500 stores in the retail market in 156 different countries worldwide and with different names in almost 55 countries in the global market. The company s have always adopted an aggressive expansion policy and which can be visible from Wal Mex in Mexico, Best Price in India, Asda in United Kingdom and other brand names in Japan , Brazil and a almost all the parts of the world. At times the company's policies have not been successful due to its business strategy failure in countries like Germany and South Korea where the company had to withdraw its dealership due to market influences and competitors strategic plans.

Strategic Management Evaluation: Wal Mart Strategies to Gain International Competitive Advantage

The following analysis is a brief discussion of the strategic decision techniques of WALMART which have been designed by them in the past and implemented to gain sustainable position in the global market.

Targeting Customer Portfolio

The company have taken several steps to attract new customers and gain their trust in various ways. The company have developed various plans in order to grow their customer database as well increase the customer portfolio by various means. These means include free home deliveries, heavy discounts for regular consumers, etc. This helped them to gain the customer trust in the retail market as well pull of new consumers by gaining trust of their loyal customers. This helped the company to gain sustainable competitive advantage in the market and give an edge to heavy competition. This strategy was being used in all most all parts where Wal Mart have its existence in some or the other forms. Thus it helped them to gain their customer portfolio.

Bringing Revolutionary Ideas

Sam Walton, The owner of Wal Mart was highly influenced by revolutionary ideas and innovation being introduced in the organisation to capture the retail market share in the retail segment. The company had tie ups with a number of hospitals and clinics which helped them to open healthcare clinics in almost 7 Wal-Mart Stores which helped to gain customers attention and priority . This also helped the company to gain a good image in the eyes of the consumers and also helped them to gain their trust.

Information System Advancement

Information system form a very important part of the organisations operational process. Wal-Mart tried to bring in the best of the Information system for their daily use. One of them was the use of RFID Technology for the supply chain management which helped the operational experts to locate the position of their goods and make necessary changes or adopt new techniques for the customer demand for specific product in the market. This technology helped the company to gain new heights in the retail segment. The same kind of systems where also used in other subsidiaries or brands of the corporation to integrate the supply chain of the company.

Expansion by Modes of Mergers and Acquisition

The techniques of mergers and acquisition have helped the business a lot to capture the market share of the company. A similar example which highlights the techniques is the acquiring ASDA ,UK retail brand for $10 billion which have helped the company to gain a higher share in their international expansion modes and techniques. The share form Asda is close to 27% of the total revenue of other

International outlet revenues. This shows that the company have used these techniques very effectively and efficiently.

Evaluating Strategic Management in Wal Mart: Current Trends


The report is all about current trends in the strategic management of one of the biggest retail giant and to understand their strategic planning. A proper critical analysis has been undertaken by keeping in mind the objectives and their decisions:

Concept based on quality:

As per Pearce (2008) The main aim or strategy of every business is to concentrate on their quality and to improve it day by day. The company has actually made sure that they would sell the best quality produces to their consumers all round the world or in the regions where they are operating their business. This is considered to be the success factor for the organization like Wal Mart to gain competitive advantage in the market and also for better positioning of their brand. Additionally to it, it would also include the services that they have to proved to their final consumers and how efficient they are when dealing with their consumers. This would normally help in increasing the brand image for the company to a great extent.

Satisfaction of Their Valued Customers:

Every organization has to ensure that the consumers with whom they are dealing are satisfied with their products and also with their services. A consumer or an individual will remain loyal to the company only when, they are able to satisfy or fulfil their needs in terms of serving them with the best quality products, reasonable price and excellent customer services 24*7. They believe that customer is not only a king but a single strategic dictator and so they are ones who would decide which product will be acceptable in the market and accordingly corporate have to actually change their business or operational strategies to serve them in the best possible manner.

Developed employee plan:

The main of the organization should be such that the employees can make use of the company's resources whenever it is required. The company at the same time made sure that the employees who work for them, are satisfied with the type of environment they work within and also they have been trained so as to give the best service to their clients and at the same time, there were different motivational and employee appraisal programmes that were being implemented to stay connected with their employee issues. There was also a development of employee programme, in order to give them appropriate training. Apart from that, employees are being treated as the assets of the organization.

Better coordination with the Suppliers:

It is a well known fact that Wal Mart is considered to be the one of the biggest retailer all round the globe. This organization has been very successful due to good relation with the employees and also due to better linkage and integration with the suppliers. There was also better usage of modern techniques of management. It is observed that suppliers are considered to be the most important part of the distribution process and if they are not managed properly, a business might have to face with severe danger. Apart from that, they have also made sure that the bargaining power of the suppliers has been fulfilled. IF by not doing so, Wal Mart would have to face the problem of products supply and this might affect their business revenues to a great extent.

(Pearce, 2008)

Higher volume and lower cost strategy:

This organization when compared to other in the same industry has low expenses and their operating expenses are also brought down to a low level. This is one the best strategy in today's competitive market if they are keeping their volume high enough and also at the same time, their cost expenditure is considerable low. This seems to the best strategy to cut down the cost and hence their profit margins can be achieved within a short span of time. They seemed to be very successful in their approach.

Sustained level of growth:

It is named as the largest retailer in this globe. This is possible when several factors have been combined to form a single strategy. Their past strategy made their fundamentals quite strong so that they can fight even in the times of recession. Apart from that, for diversifying their business operation and also for better growth in the future they have to strive for other business options. There is a need for strategically planning which is possible when they do proper analysis of their environment. By this they can achieve the sustained level of growth in the market.

Evaluating Strategic Management in Wal Mart: Future Trends

In the above case, it has been observed that the current trends in their strategic planning are quite productive for the company but they have to make necessary changes in their future planning so that they can remain competitive in the market and also for achieving sustainable advantage in the market in times of recession:

To integrate their distribution channels:

As per Soderquist (2005) this organization is one of the biggest retailers in the world and to stay in the number one rank, they have to make sure their business operations are working effectively and efficiently. Apart from that, the main job of the top management of the company is to do analysis if their external environment as and when it is required and also at the same time, they need to make sure that they maintain good relation with their suppliers. As one of the network of the organization in retail industry is their distribution network which needs to be maintained properly. A wider a stronger distribution network would ensure that they do not have any sort of products shortage in their large supermarket stores and also at the same time, they have been filled properly. This would ensure that there is better coordination with the manufacturers, suppliers, different stores at strategic locations.

Development of better technology in their supply chain:

Developing a supply chain for the large retailers like Wal Mart is not that easy task, but if they are implemented properly they would really prove to be very productive in terms of customer satisfaction, quality product, round the clock availability of the products. Supply chain plays an important role in the development of their network on a large scale. So their main focus should be on improving their supply chain by implementing improve technology and also due to effectively communicating with their clients and their suppliers. But there are certain factors which proved that there needs to be a change in their supply chain as company had occurred few losses in the given years. So there is a need to integrate their information systems. They have to install a strong management information system (MIS) which would make their work easier and also it would support them to communicate effectively with their internal employees and also with the outside clients. This type of MIS would help them to understand the needs of the customers and so it would serve them as a reference when they deal with them at a later time.


To acquire and penetrate in the emerging markets:

Still the best and biggest retailer in the whole world, it does not have the control over the emerging markets of the world. It does not have or hardly have their business operation in the countries like China, India, and Russia etc. This are markets where if invested in the right sense, it can prove to be very productive and also it can earn good amount of profits. Apart from that, India can be a good and watchful investment for this organization as the economy is growing at the rate of 9 percent which is good for the company and it has the capability to tap newer markets. But India, Wal Mart has opened their stores in the name of best price but they are not so productive in terms of revenue generation and also the domestic players are better competitors. Their main strategy should be to invest in these emerging markets with the help of some joint ventures and also they would have a support from the government to invest their funds in the form of FDI.

Acquisition and mergers in South Asia pacific region:

Wal mart has been successful in countries like Europe, UK, US and few other countries in the field of retail market, but it was not able to mark its presence in India due to higher competition. But apart from that, India is the land of opportunity and so if they come with the proper strategy to tap the market, it can prove to be very good for the organization due to large population of the country and vast consumption and middle class family who would prefer to buy reasonable but qualitative products. It can also give good experience to the consumers in the way of opening super markets in the country like India where smaller shops dominate the country. They need to merge with the retail companies in India so that they can have strong presence and can get ready made distribution network. This would cost them much less and also government is also very cooperative to open up their doors. This type of strategy would surely help them in building up the business operation in the country like India.

Improved Work Culture:

This organization has to focus on developing the type of culture which would serve as an ingredient in the success of their business functions. They need o train their workforce efficiently and keep recruiting the best talented workforce from the market. This is possible when they offer them better compensation packages and also other benefits which the other competitors have been failed to do. Work Culture can be improved when an employee's feels to be the part of the company and for this they need to be trained properly and also try to sort out their individual issues. They have to give them more and more responsibility and authority when it comes to take decisions.(Soderquist, 2005)


So from the above given report, it has been observed that strategic planning is the essence of every organization. We can conclude that Wal Mart is one of the best retailers when it comes in consumer satisfaction and the type of strategy they have implemented to gain increased market share and competitive advantage. They have kept on changing as per the market conditions. But there are times, when company might have taken a wrong step or delayed in implementing new business policies, so that needs to be sorted out as soon as possible. This would help them to diversify their business activities and also can start their business operation in the emerging markets like India, where there is lots of opportunities.


Ansoff, H.I., 1965, Corporate Strategy: An Analytical Approach to Business Policy for Growth and Expansion, McGraw-Hill, New York., assessed on 04.01.2011

Pearce, (2008), "Strategic Management", 1st edition, Published by McGraw Hill, New Delhi.

Don Soderquist, (2005), "The Wal Mart Way", 1st edition, Published by Thomas Nelson Inc, Tennessee., assessed on 04.01.2011

Company Annual Report for the year 2009-10