Essay on SBU Fundamentals: Macroeconomic Dimensions for Business Strategy

Introduction

Strategic business unit (SBU) fundamental refers to aspects that contribute to profit-making in an organization and emphasizes on the provision of quality products and market environment. Implementation of a strategy requires a choice on the most suitable strategic business unit since SBU has a discrete marketing approach, an analysis of the competitive nature of the market, and marketing promotion (Rothaermel, 2016). Macroeconomic dimensions comprise of aspects above. Business strategy involves the employment of frameworks or effective decisions geared towards ensuring that a company realizes its specific business goals.

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Scholars assert that business strategy refers to a grand approach to secure a market advantage against competitors, sustain its operations, and build consumer loyalty and satisfaction to achieve their end outcome (Rothaermel, 2016).The purpose of this paper is to restate Walmart's strategy, identify the markets to be served according to an SBU preferred, and examine the allocation of resources (financial and human). Furthermore, this paper intends to explore the operational strategies of Walmart (marketing, operations, R&D, finance, HR, IT/MIS, its organizational structure, and recommend the best strategic implementation plan.

Levels of Business Strategy

Business strategy defines a company's lasting brand, direction, and future. Managers use business strategy to attain effectiveness, identify and utilize prospects, and assemble resources. It also provides companies with market advantage, solve issues, and streamline operations. Business strategy falls under three categories, such as the corporate, business, and functional levels (Rothaermel, 2016). The corporate level strategy consists of a lasting, action-plan, cohesive, and complete scheme designed by senior executives.

Companies use the approach for various reasons such as secure business spaces, expansion and progress, acquisitions and mergers, and diversification, among others. Business level, on the other hand, involves a specific business. Business strategy refers to the general business outline of the company and is developed by general managers who incorporate the company's mission and vision into a framework (Rothaermel, 2016).The functional level strategy consists of a company's operational regulations that line managers develop to streamline the company's activities. The strategy guides operations such as human resources, research and development, marketing development, and finance, among other functions.

Restating Business Strategy for Walmart Inc.

Walmart Inc. continues to retain top position among multinational companies for decades. The company's low priced products continue to sustain the business through an increased customer base. The introduction of technology in its operations has also enhanced its profit margin (Heller, 2017). Technological employment in its marketing strategy ensures that customers shop anywhere anytime across the globe, thereby increasing customer loyalty and contentment.

Corporate and Business Level of Walmart's SBU

Walmart is among the leading multinational corporations regarding the purchasing power and vendor relationship in the global market. Walmart's competitive advantage depends on its ability to reduce the costs of suppliers and its strategy against dependence on suppliers (Rothaermel, 2016). However, increasing product prices and the introduction of supplier engagement safeguards may make the company pay more than other organizations. Walmart's procuring power is sustainable due to its single volume.

The company has a robust warehousing (distribution) system in which most of the procured products are shipped directly to the distribution centers. The distribution centers operate 24 hours and support many stores near the warehouses (Rothaermel, 2016). Besides, the company purchases directly from the suppliers and has a local delivery framework. However, other competing firms may imitate the system, thus reduces the company's advantage regarding its effective method of warehousing. The warehousing system is sustainable unless another competing company copies the system.

Walmart has effective and efficient in-store operations that involve investment in quality brands, products designed to satisfy the domestic market, and independence provided to store managers (Martinez et al., 2017). The store managers can set their prices without having to use quotations from headquarters. The strategy is sustainable as the exclusive culture expertly maintains the store operations. The company's corporate strategy focuses on customer satisfaction-the company cost-cut on expenses that arise from the advertisement. The company has a robust CSR (corporate social responsibility), committed to community values, and patriotism (Rothaermel, 2016). However, bad publicity and conflict with some communities across the globe affect the business operations of Walmart. The marketing strategy is only sustainable through a robust CSR and vital community culture.

The company has deployed inventory control systems, EDI, and massive investment in the satellite. Besides, the company employs data mining in projecting its sales and mitigating external factors such as weather. The IT systems deployed by the company ensures fast response to logistics and distribution channels. If another competing company imitates the system, then the company's market advantage is jeopardized. However, since the company has great innovation and invention regarding IT, the strategy is sustainable (Heller, 2017).

The human resource department motivates its employees through active participation in their plan called 'Walmart cheer and squiggly' and through fringe benefits that workers enjoy at the company. Besides, the company rewards innovative employees. However, high costs due to lawsuits, high employee turnover, and low wages impede the desired outcome of the strategy (Rothaermel, 2016). Better organization and management styles enhance the success of most companies. The company has a framework that involves product ideologies and values. The company employs a strategy that incorporates a fast response management approach relating stores and headquarters. Statistics on sales and management plans get organized. The management style at the company has a unique culture that drives the businesses of the organization across the globe.

Markets Suitable for the SBU and Functional Strategies

There are several markets that the strategic business unit can serve. States like Brazil, Mexico, Puerto Rico, Britain, Germany, South Korea, and Argentina offer potential trade that the strategic business unit can serve. The company operates. Scholars suggest that consumers prefer one-stop shopping a strategy that the SBU proposes (Rothaermel, 2016). Grocery, entertainment, and sporting merchandise require one-stop shopping. The procedure involves providing platforms such as online shopping platforms like Walmart.com, mobile apps platform, and a store. The strategy offers low-priced commodities through various forms, including Walmart's Supercenters, Discount Store, and Neighborhood Market.

The outlets such as the Walmart Supercenters provides a one-stop shopping experience by incorporating a grocery store with bakery, fresh produce, deli and dairy products, with electronics, toys, apparel, and home furnishings (Rothaermel, 2016). Most of the Supercenters also combine banks, restaurants, hair and nail salons, and vision centers. Discount stores offer various products such as electronics, apparel, toys, home furnishings, health and beauty products, and hardware products that link well with most consumers. Due to demand for products that emphasize on environment and health concerns, Walmart has a category of an outlet called the Walmart Neighborhood Market that offers health services, affordable groceries and merchandise, and healthy food products.

The SBU provides easy access to services through a strategy that involves adequate and efficient retail and distribution (R&D) system. To reach the markets, Walmart's R&D service stores, clubs, and provide direct delivery to consumers. Since Walmart applies international strategy, Walmart global offers various services to its consumers across the globe (Rothaermel, 2016). SBU proposed enhanced information technology as a strategy. The employment of Walmart US e-commerce ensures that the company reaches a vast number of consumers (Heller, 2017). The possibility of ensuring customer satisfaction, which is one of the business strategies, includes formulating innovative programs. Information technology ensures that the company taps on emerging markets across the globe.

Allocation of Resources

Walmart ensures that its human resource department receives adequate support in realizing its business objectives and desires. The company's internal organizational functions assist its human resource department. Walmart's strategies support the enhancement of its workforce and management processes. Aspects such as minimal employee turnover and increased employee motivation can improve the productivity of Walmart in the changing and competitive market environment (Rothaermel, 2016). Executives at Walmart decided to slow growth of the company's physical store space, and thereby reducing new development drastically. The company reduced spending on the store and club development in the year 2017.

However, the company increased spending on store remodeling during the same year. Besides, the company increased spending on e-commerce that included technology and supply chain programs (Heller, 2017). The managers at Walmart assert that such a shift in spending can boost sales and provide a higher return on assets through increased spending on e-commerce policies while improving general physical stores. The e-commerce is double as customary retail outlets and as distribution centers for e-commerce sales.

Organizational Structure

Walmart's corporate structure executes limits on how the company addresses its challenges. Structural attributes assist in facilitating the company's framework executions in capturing the market share. The organizational structure of Walmart determines the way individuals respond to issues in the workplace (Galpin et al., 2015). The lasting success of Walmart indicates that the organizational structure and culture bring competitive advantage and prosperity to the company. Walmart has a hierarchical functional organizational structure.

The structure consists of two aspects that include hierarchy and function-based definition. The hierarchy aspects relate to the vertical lines of command and governance in the entire organizational structure. Besides, the function-based definition aspect of the company's corporate structure comprises of workers who complete specific functions. The function-based definitions include departments such as human resources, finance, marketing, and information technology, among other departments (Heller, 2017). The organizational structure allows managers to make decisions and take appropriate actions quickly.

Walmart's corporate culture consists of four aspects that include service to consumers, respect, strive for excellence, and work with integrity. These aspects govern workers' behavior, which highlights organizational abilities to increase economic worth in the delivery of retail service and associated services to customers Galpin et al., 2015). Walmart can enhance its organizational structure through the incorporation of its beliefs in the context of its corporate culture. Addressing the issue of employee's wages is essential for the improvement of the company's structure.

Strategy Implementation

Walmart should enhance the productivity of its human resource department through pro...