Walmat and Wegman Stores Analysis
WALMAT AND WEGMAN STORES ANALYSIS 8
Innovation at Walmat and Wegman
Comparison between innovation at Walmat and Wegman
These stores use both internally generated innovation and externallyacquired. Walmat uses internal innovation to design its productdisplay, structure its management and implement business strategies.Every store of the company is designed in a way that integrates theculture of the people in that region and shows the values of thecompany. The store emphasises on innovative display methods whichwill be appealing to the customers. This innovation is good to thecompany as it helps the company to create high customer loyalty andmake the customers satisfaction is guaranteed. Walmat stores keep itsmerchandise in a way that can easily access by the customers. The wayin which the products are displayed in the store is determined by thecreativity of the store management. Like Walmat, Wegman store hasbuilt a lot in internally generated innovation in the display of itsproducts. However, Wegman stores do not have as high displaycreativity as it is shown by the Walmat store. Most of the stores ofWegman use the same way of displaying which does not factor in thevalues and the culture of the area in which the store is located(Duhigg, 2013).
The Walmat Company has invested much in externally acquiredtechnological innovations. Walmat uses technology to maintain itsinventory and facilitate the smooth flow of its supply chain. In eachstore, the company uses merchandise scanners to record and keep dataof every item. The electronic record ensures that that the purchaseditems removed from the list. When the stock reaches the re-orderlevel, the system sends a signal to the supply for replenishment(Massengill, 2013).The Walmat Company has also invested in checkingtechnology. The company has technologically adopted a check out timethat helps to reduce waiting time. The company ensures faster serviceto the customers because customers can use smartphones to scan themerchandise into customers’ registries. As a plan, the companyintends to include external checkout counters where customers can payfor their goods after scanning them. Walmat uses both continuous anddiscontinuous innovation. Continuous innovations used in thecompany’s strategy and restructuring, while discontinuousinnovation in used in technological operating systems.
Wegman Company has also invested a lot in technological innovation.The company acquires the technological innovation from the companiesthat deal with producing the information technology systems. Thecompany uses the electronic records in for its stock. The record isintegrated with the customers’ electronic registry which allows thesystem to automatically deduct any item that is to the customers fromthe stock. Wegman store has not embraced the use of smartphone`sscanners like the Walmat Company. The late entry in thistechnological innovation is meant to overcome the risks that accruefrom this technology. The company has been adopting the externallyacquired innovation late (Marquard & Birchard, 2007). Thecustomer scanners and electronic data registry is used to facilitatethe supply chain within the company. The system liaises with thesuppliers end system to ensure that the company does not run out ofstock.
Wegman store emphasises innovation from its suppliers and employees.The new company strategy comprises working with customers who haveinnovative and creative products which can amaze the customers.Wegman has embraced internally acquired innovation in largedimension. In the year 2013, the company announced a partnership withthe University of Cornel in a pilot programme that will teachstudents to make hands-on cheese. This innovative idea will lead tohigh support to the local cheese industry, and create job andeconomic opportunities in the region (New York) (Plunkett, 2014). Themove will lead to low cost in the supply of cheese and increase itsefficiency that will benefit customers.
Wegman is in the process of adopting new packaging techniques. Thecompany intends to have its products packaged in an environmentallyfriendly way and away that can differentiate its products from othercompetitors. This innovation in packaging will ensure that thecompany has a sustainable plan. Wegman has innovated many productssuch as refrigerated window displays, vaporized water store,cafeteria lounge and homemade candy shop (Plunkett, 2014). Since itwas founded, the company has changed its customer service to include24 hours services, inclusion of pharmaceutical department and giftcards.
Despite the rising call from the regulators and the environmentgroup[s for the stores to come with creative ways of packaging theiritems without degrading the environment, Walmat still uses thepolythene packaging materials. The store shifts the burden ofpackaging innovation to the suppliers of its products. Walmat doesnot have much in internal innovation, and it uses other storesinnovation to remain in business, for example, the stores havestarted to use the vaporized water store and refrigerated windowdisplay, which was innovated by the Wegman stores.
Both Wegman and Walmat stores have used both continuous anddiscontinuous technological innovation. Continuous technologicalinnovation is used in the planning, display, management strategy anddevelopment of company structure and long-term strategy. Thediscontinuous innovation is used by both stores in externallyacquired innovation such as electronic stocktaking. Before theinnovation, the two companies used to have the manual record whichwas replaced by electronic data. However, in spite of the advancementin the technology, it is difficult to technologically lock inmerchandise stores. This is because the stores do not produce theirown products and can rely on the innovation of their suppliers tosell quality goods. Much of the innovation that is emphasised in themerchandise stores is service innovation.
Organization design at Walmat and Wegman
The mission of the Walmat is to lower the cost living and encouragesaving on its customers. The store deals with a selection ofgroceries and general merchandise. Regional vice president, whooversees district managers, each store management and otheremployees, operates each retail store. Store management includesco-managers, store managers, management trainees and assistantmanagers. Walmat has a bureaucratic structure which was changedslightly in the year 2010. The store is operated in three divisionsthat is, store operations and real estate (that have been put underone leadership) and logistics division. The store has divided itsoperations geographically into South, North and West business unitstherefore, Walmat is geographically departmentalized rather than thefunctional departmentalization. In the hierarchy of power, Walmat isheaded by the group CEO, the board of governors (which comprise thecompany’s CFO, COO, CIO and board chairperson) and the three CEO’sof Wal-Mart United States, Sam’s Club and Walmat international.Major decisions (such as merchandise price and supply chainmanagement) with the stores are made by the store management whichreduces the span of control. The store has a well-established chainof command (Massengill, 2013).
The bureaucratic hierarchy facilitates the communication andharmonization of the strategy in all the stores of Walmat Company.Walmat has stores in many regions around the world. All the storesare operating using the same values and have a common objective whichis to cater for the interest of all the stakeholders of the company(Holtom, B. C., Mitchell & Lee 2006).. The division of thecompanies into three main operation units helps each unit to focus onits area. The top management streamlines the operations off all thedepartments to the attaining the common goal of the organization.However, the long bureaucracy in the organization has somedisadvantages which include breakdown of communication, the poorrelation between the management and the employees, dissatisfaction tothe customers and low rate of innovation (Hornblower, 2004).
On the hand, Wegman was established under the mission of offeringquality products and services and providing a positive workingenvironment. The company is overseeing by the board of governors.Unlike, Walmat, Wegman board of governors is made up of externalmembers except the group CEO. The CEO of Wegman acts as the linkbetween the board of governors and the company. The CEO of thecompany oversees the three five major divisions of the company, thatis finance and accounting department, consumer affairs department,legal department and store operations department (Plunkett, 2014).Each division has the head management. The top management comprisethe group CEO, the Stores president, Chief finance officer, head oflegal and secretary to the company, head of consumer affairs and thehead of stores operations.
Wegman has 83 stores located in various regions. Every store isoverseeing by the store manager. The store manager makes the decisionin liaison with the top management. The company has a good flow ofcommand but is operations are more decentralised than Walmat.Difference in the organization design of the two stores is determinedby the size of each store. Walmat has many branches that are morediverse than Wegman. Walmat operates under different names and somestores are franchised. On the other hand, Wegman does not focus onfranchising its stores and, therefore, it has a very short chain ofcommand (Plunkett, 2014).
The short bureaucracy in Wegman Company helps to overcome thedisadvantages of communication breakdown and other shortcomings ofthe long bureaucracy. The short bureaucracy in its structural designensures that its more than 83 stores are coordinated. Both Walmat andWegman use proper display and designing of the stores to ensure thatthe customers are able to access all the materials that they needeasily. When designing the stores, Wegman and Walmat ensures that,the consumer and home products are the first to be accessed (Manners,2004). Proper designing of the store ensure customer satisfaction.Both stores have also ensured that all jobs are designed as per therequirement of each business unit.
Walmat and Wegman have used job, structure, store and productsdesign to ensure that their values and missions are attained. Walmathas a long bureaucratic structure, good job designing and hasinvested much in internal design of it stores. This design has helpedthe company to differentiate itself and position itself properly inthe market. On the other hand, Wegman has a short bureaucracy andservices departmentation. The store embraces excellent display anddesigning of its stores. The design has helped the store to pursueits mission and offer quality services. In brief, organizationaldesign has played a big role in positioning and differentiating thebusiness of Walmat and Wegman.
Duhigg, C. (2013). Thepower of habit : why we do what we do and how to change.London England: Random House.
Holtom, B. C., Mitchell, T. R., & Lee, T. W. (2006). Increasinghuman and social capital by applying job embeddedness theory.Organizational Dynamics, 35(4), 316-331.
Hornblower,S. (2004). Is WalMart good for America. PublicBroadcasting Service, (November 23).
Manners, T.(2004). CoolNews about Retail: From Warhol to Wal-Mart.iUniverse.
Marquard, W. & Birchard, B.(2007). Wal-smart: what it really takes to profit in a Wal-mart world.New York: McGraw-Hill.
Massengill, R. (2013). Wal-Mart wars: moral populism in thetwenty-first century. New York: New York University Press
Plunkett, J. (2014). Plunkett`s retail industry almanac 2013:retail industry market research, statistics, trends. S.l:Plunkett Research.
Williams, C. (2009). Management. Mason, OH: South-WesternCengage Learninggg