Why and how the material is important and relevant to the course content; and * what practical managerial implications the material has. Business strategy, it is something that Wal-Mart has had success in since it is the nation’s largest retailer at $250 billion in revenues. Now Wal-Mart is taking a different approach to their business strategy. They announced the changes are going to be made to the way they source produce, train, and operate. All of this in an effort to ensure the quality and freshness of the fruits and vegetables that it offers customers.
They plan to cut out the middleman and source their produce from local growers. They are also bringing in produce experts that will guide the purchasing of produce from the local growers. Wal-Mart wants to get away from the use of wholesalers because customers have not been happy about the quality or freshness of the produce offered. The plan also calls for the training of over 70,000 employees through “Fresh Produce Schools”. Those included in the training are also store managers, market managers, and produce department managers. They will be taught how to better handle fruits and vegetables.
Although Wal-Mart is already the leading retailer, this new strategy is going to be a threat to other grocery stores. There is Safeway and Kroger which will have to compete with the already low prices and now the promise of fresh produce. Whole Foods which is another grocery chain is not really threatened by Wal-Mart’s new strategy because they cater to a different clientele than that of Wal-Mart. In addition to offering fresh produce, Wal-Mart will now be offering a 100% money back guarantee. If the customer is not happy with the quality of the fruit they can take the receipt back to the store and they will be given a refund without asking any questions. The goal is to stock all of their produce from local farmers.
This type of strategy change is relevant to what we are studying because it is a prime example of implementing a strategy that will ultimately increase profits. Wal-Mart has done their research and realized that the concept of offering the most fresh produce can indeed become a reality. They have thought of where they are going to get it and how they will implement the change. The dissipation of information of how to handle the new change will begin with upper management and will end up with Wal-Mart employees in the many stores across the United States.