If the strategic plan is properly prepared and understood, then the company will continue to grow and thrive. Wall-Mart is a multimillion dollar empire that provides goods and services to communities all over the world. They are able to do this is because they are constantly looking for new ways to keep their business growing while keeping their customers satisfied and coming back for more. In this paper, Team C has developed a strategic planning initiative that will help Wall-Mart appeal In the local community.
The strategic plan will help readers understand how financial planning plays a large part in the success and failure of a business by looking at costs and sales in the community, and finally ascribing the risks that are associated with the strategic planning initiative and financial effects they may have on the company. Strategic Planning Initiative Financial planning is about finding out how the business is going to financially in the future. This means that reports from accounting and other departments have to be correct or else the forecasting will not be accurate.
When a business is working on their financial planning they need to prepare a cash budget. Financial planning helps a business to know how the profits will look in the future which In turn will help them plan on other things. This is where the strategic planning comes Into play. The company can plan how much merchandise to receive for parts of ten year. I nee can also Tugged Tort Dulling expansions, malfeasance, Ana toner necessary things. By knowing how much they can spend on certain projects with the amount they have received from the financial forecasting they can budget properly.
They can take the time to plan smart and know what they can do for the company and what they cannot do. Wall-Mart is planning on getting their supplies and merchandise from responsible sources. They want to make sure that the products that they sell to their nonusers are safe to eat and that with our busy lives they want the products to stand the wear and tear. With the help of the safer and stronger merchandise, Wall- Mart is planning on increasing sales and make sure that they are making the importance of their values known.
With this said from the annual report, Wall-Mart is also working with Michelle Obama to make their food products healthier and their produce cheaper. (womb. Anytime. Com) Mrs.. Obama is helping to reduce obesity in children and trying to make foods healthier. Wall-Mart has been meeting with the first dad and are going to take their brand, Great Value, and make it to where it has less fats, sugars, and unhealthy salts. They are going to come out with healthier soups, salad dressings, rice and snacks.
Wall-Mart is also trying to get Kraft to follow their examples and produces healthier products. Initiative Affects on Costs The new initiative will not have a major effect on cost for Wall-Mart. Wall-Mart will continue to use its current manufacturers to be able to provide their consumers with the most economical prices. Some things that have caused a change in cost for Wall- Mart would be the improvement of labor productivity and also organizational changes that have been made.
There may be several changes that may occur in the upcoming year, but with their past experience Wall-Mart is fully prepared to embrace the changes in the most efficient way possible. They will continue to provide better health benefits to their employees and will be more strategic in their advertising. Also, with the Wall-Mart website they are cutting cost by not having so many items to ship and stock in their stores. It also provides their consumers to have easy access to he products which will expand their clientele.
Initiative Affects on Sales Wall-Mart’s two initiatives that our team focused on are not only driven by expectations of rising sales, but are thoughtful of improving society in small ways. The initiatives focus on improving the health of consumers, helping them to make smarter choices when doing the food shopping. Very aware of the effects of the economy, Wall-Mart is also finding ways to make these healthy choices affordable and realistic. Quality and values are what they are aiming to reveal, being responsible ND thoughtful so that buying Wall-Mart products is an easy and smart solution for better everyday living.
With such a strong platform, these initiatives should easily lure American’s into one of their 3,804 stores, targeting the common need to live smart and healthy lives on a budget, in order to accommodate the current state of ten economy. “We are expanding our assortment, re-allocating selling space Ana enhancing productivity initiatives to reduce costs” (Wall-Mart, 2011). By working with suppliers Wall-Mart is aiming to expand assortment in all categories and make the assortment more relevant. We continue to implement productivity initiatives throughout the stores, supply chain and logistics to improve returns. As we see top- line sales increase through our focus on IDLE (everyday low prices) and from operational and merchandising improvements, we can further enhance our ability to drive expense leverage” (Wall-Mart, 2011). With cost reduction and commitment to the focus at the core of the Wall-Mart organization, everyday low prices, sales will continue to rise, and the trust and loyalty consumers already show will grow even trotter.
Risks Associated with Initiative and Financial Effects As with any business it is important to assess the risks and the financial affects of a business initiative. For Wall-Mart, three initiatives have been identified. The first is purchasing supplies from a responsible supplier. The second is to produce healthier food products in conjunction with the support of Michelle Obama. The third is to promote cheaper produce which will encourage families to eat healthier. The identified associated risks are the possibility of limited resources from so-called expansible suppliers causing Wall-Mart to limit goods that they sell.
In addition, there is the possibility of higher cost associated with responsible supplier which will then be trickled down to consumers. Lastly, there is definite risk of botulism or reduced sales associated with purchasing lower quality produce in order to meet their initiative of cheaper produce. With any risk there are also potential financial affects which are the effect of the associated risks. For Wall-Mart they may find that they have to pay more for goods that are form responsible manufacturers and appliers which in turn which trickle down to the consumers causing them to pay more for goods.
In turn, causes Wall-Mart to lose customers due to higher pricing. On the other hand if Wall-Mart is able to budget for the absorption of the additional costs and see no price rise to their consumers then they may actually see a financial benefit. Wall-Mart envisions cheaper produce as a potential benefit to its customers and it can be but the key to this success will be purchasing cheaper produce that is still quality produce and offering it at an everyday low price to consumers.
On the other hand if Wall-Mart offers cheap produce that is not quality produce they may see a reduction in revenue and a loss of customers in this area. Conclusion Wall-mart has over 3,804 stores worldwide, and is the largest leader in retail sales. Wall-mart is able to do this by expanding their business into other countries and providing great quality items to their customers at low prices. The best way for Wall-mart to grow even bigger than they already are is to create a strategic initiative plan that is firm and reliable.