Operational Planning

Operational Planning

I. Introduction

Operational planning is setting up procedures and processes at the lower level of the company in order to meet the overall goal of the company. There are different factors for each company that affects the operational plan and how it is laid out. The operational plan can also greatly influence the success of a company. There is a direct correlation between the operational plan and a company's strengths and weaknesses. The operational plan must also take into consideration the various opportunities open to the company as well as current trends and threats in the market. All of these factors are very apparent in the way Wal-Mart has set up its operational plan.

II. Factors that Influence Operational Planning

There are many factors that go into the day to day operational planning at Wal-Mart. Wal-Mart's goal is to provide quality goods at low prices to its customers. This goal is reflected in its operational plan. There are four key factors that influence Wal-Mart's operational plan and they are the customer, finance, the processes, and adaptability. The customer is the driving force at Wal-Mart. As its goal states, the customer is the primary importance to the company above all other things. Finance is also very important. In order to provide low cost quality items, Wal-Mart must keep its overhead low and ensure that it really does pay less for items to be sold. Wal-Mart has many different processes which help it attain its goals. Whether it be the process of motivating its employees or the process used to collect data on market trends. Finally, Wal-Mart's operational plan is adaptable. It must be in order to adapt to changes in the market, customer likes and dislikes, or changes in financial status for the company.

III. Strengths and Weaknesses

Organizations such as Wal-Mart pursue competitive advantage through low-cost strategies. Their large size allows them to sell their products and services at a lower price, which leads to higher market share, volume, and, ultimately, profits. Wal-Mart is the cost leader in its industry and market segment. However, even a cost leader must offer a product that is acceptable to customers compared to competitors' products. Wal-Mart has a competitive advantage because they can offer the customer products and services that are beneficial to the customer at a low cost. For example, Wal-Mart's computerized inventory control system helps make certain that products are on the shelves and that inventory costs are minimized. In this case, Wal-Mart's information technology is clearly a valuable resource.

Wal-Mart seems to have total control over its future. With its larger then life warehouse stores, low prices, and little competition one would think that Wal-Mart will go down in history as one of the best if not the best planned organization in the past 75 years. In the past year a few weaknesses have surfaced and unfortunately for Wal-Mart no level of planning could have stopped the troubles this Fortune 500 Company is facing.

In a small inner city of Southern California a new Wal-Mart was proposed. This Wal-Mart was to be the saving force of the community, offering jobs and much needed revenue; this was the argument of the Wal-Mart supporters including some of the cities local government. This small city, with little more then 100,000 residents, rallied together its minimal resources and did what no other city has been able to do. Inglewood, California blocked the construction of the Wal-Mart Supercenter.

Not just a regular Wal-Mart where most of the items sold aren't inclusive of groceries. A supercenter includes a full service grocery store. Inglewood's labor leaders and other opponents complained that the nonunion stores depress wages, drive out existing businesses and create traffic problems for the city. With less then a 1/3 of the residents voting Wal-Mart was defeated with 7,000 voting against Wal-Mart and 4,500 for it.

With the public viewing Wal-Mart as a taking not a giving company, there may be future opportunities were other communities protest the company invading their city without the company making some changes to the way that business is done.

Solutions for Wal-Mart's image problem are possible but may also be costly to incorporate. Offering health insurance to its employees may be a start. If Wal-Mart shows the communities that they are willing to give a little more people maybe willing to consider allowing a Wal-Mart to be built without any resistance.

The planning executives for Wal-Mart may want to take from this experience a very expensive but valuable lesson. If the reasons why Wal-Mart wasn't welcomed into the community are focused on and possibly changed, Wal-Mart may just live up to the prediction of being 20% of California's total grocery revenue. If the communities' reaction is ignored Wal-Mart will be faced with challenges when potential stores are planned for various communities.

IV. Opportunities

On January 21, 2005, on Wal-Mart.com, Wal-Mart announced that it will be launching a new credit card. The new card, Wal-Mart Discover, will be issued by GE Consumer