1/10/2020 0 Comments
Threats and Challenges of Walmart - Essay Example When Mike Duke took over as Chief Executive Officer in 2009, he faced more challenges from the inside and the outside. In 2009, Lee Scott announced his retirement from the company he had reined for years. During Leeâ€™s stint, he overcame internal and external foes by transforming the company and dragged it â€œinto the 21st century from its clannish rootsâ€ (Kapner, 2009). Under Mike Duke, Wal-Mart has a new strategy of doing business with the public and with its suppliers: it wants to sell and deliver environmentally friendly products and serve the public with the least environmental impact that it could have and do. Moreover, Wal-Mart wants to transport the products from suppliers so that it could cut costs and save more for its stores (Burritt, et al., 2010). Vice-president for corporate transportation, Kelly Abney, says that with lower costs they would have increased sales. The strategy is to take over transportation service from companies that produce the goods â€“ Wal-Mart believes it could do it more efficiently while allowing the companies just to produce the goods for them. In this sense, manufacturers would pay Wal-Mart for the transportation through lower wholesale prices. More savings means more sales for Wal-Mart and low prices for the customers. Wal-Mart had done this before and saved $200 million by packing and scheduling efficiently its fleet of trucks (Burritt, et al., 2010). With the new strategy, Wal-Mart can use contractors and its own vehicles in picking up products directly from manufacturersâ€™ facilities. Wal-Mart can save more time in delivery with this new strategy. The problem in this new strategy is the economies of scale that it will create. According to Randy Huffman, a former Wal-Mart executive, the move will have an adverse reaction on other manufacturers, but this will be beneficial on the part of the customers.