Business Studies (10)
Research indicates that there is the positive link between the development of human capital and organizational performance. Human capital does make a significant impact on performance. Today, the most important human capital challenges involve engagement, retention, and providing strong benefits and compensation. In this annotated bibliography, it focuses on the research done on human capital and how to deal with the challenges.
Fitzenz, J & Bontis, N (2002). Intellectual capital ROI: causal map of human capital antecedents and consequents. Journal of intellectual capital, 3(3)
In this study, the researchers examined the antecedents and consequents of effective human capital management by integration of the qualitative and quantitative measures. In this study, the study used a sample of 76 senior executives from 25 companies in the financial industry. The researchers developed a holistic causal map on the ground of integrated constructs from fields of knowledge management, human resources, intellectual capital, accounting, information technology, and organizational behavior. The study was effective as it provides the driving factors which determine the effectiveness of the human capital capabilities.
Hooper, D & McCrindle, M (2006). Generation Y, attracting, engaging and leading the new generation at work. Drake International White Paper, 3(1)
The report is based on a survey conducted by Drake International of 3000 Australians, and it focuses on the group studies of Generation Ys to help the businesses in understanding how to approach generation diversity in the organization. The authors tend to outline the biggest shifts in the workforce that include transitioning generations and call for employers to meet the needs of the multi-generational workplace, aging population, redefined work life of a new multi-career generation, and increasing the employment options. The authors claim that so at to manage Generation Y, employers must advertise in the right places and use language that appeals to this generation. As a way of retaining these employees, businesses should continue providing continual training, flexible working conditions, promotion opportunities, and rewards and recognitions.
Ahmed, Z Roy, H & Huang, Z (2002). Benchmarking human capital strategies of MNCs in Singapore Benchmarking an International Journal 9(4)
The researchers aimed at exploring the role of human capital strategies in survival and growth of promising local enterprises and the existing multinational corporations in Singapore. In the study, the researchers aimed at benchmarking the human capital practices of the multinational corporations to the degree of if promising local enterprises are learning from human resource strategies of multinational corporations. The results of the study indicate that many promising local enterprises can learn from the human capital strategies of multinational corporations in certain areas. They include the broadening focus of training and selection methods to include teamwork, leadership, and critical thinking, developing different methods to enhance the value of human capital, align organization culture with new values of teamwork, leadership, and learning, and also expand the reward system apart from extrinsic incentives.
Fox A (2014). Keep your top talent, HR Magazine 59(4).
In the article, it looks at employee retention through focusing on high-level, top-performing employees. Based on the researchers, most employees usually report low levels of engagement with their employers, but the article provided recommendations for how the HR department can participate in making sure that key employees are retained. The article does suggest that training the managers to hold recruitment conversations with the valuable employees can encourage them to stay long in the company. According to the author, employee engagement is a crucial piece of the retention puzzle and employees tend to feel engaged when they do have a solid relationship with managers. In this study, it cites some examples from different companies that have used the strategy and have observed positive results. The author recommends that by using stay interviews and survey on employee engagement, it can provide the company with an idea of intended employee turnover.
Shuck, A Twyford, D & Reio, T (2014). Human resources development practices and employee engagement. Human resource development quarterly, 25(2)
While using the social exchange theory, the study aimed at understanding the possible linkage of the human resource department practices and employee engagement to the turnover intentions. The researchers used the Internet-based self-report survey as the primary tool of data collection. The results of the study suggested that the participating in the human resource development practices and the emotional, cognitive, and behavioral engagement negatively relate to the turnover intent. The study indicated that engagement partly mediated the relation between the turnover intent and the HRD practices. Based on the findings of this research, it supports the value of supporting employee participation in the HRD practices so as to improve the employee engagement and also reduce the turnover intent.
Adeosun, O Ogunyomi, O & Akindipe, O(2013). Effective reward system and worker’s productivity under dynamic socio-cultural and legal environment in selected Nigerian insurance industry. Alleviation, income redistribution & rural development in developing countries. 402-421
The authors tend to summarize the study on the effect of the reward system on the productivity of workers in certain insurance companies in Nigeria. From the study, the results show a positive form of relationship that does exist between an effective reward system and the productivity of the worker.
Deckop, R. & Cirka, C. (2000). The Risk and Reward of a Double-Edged Sword: Effects of a Merit Pay Program on Intrinsic Motivation. Nonprofit and Voluntary Sector Quarterly, 29(3)
Deckop and Cirka tend to examine the wide-spread merit pay programs that are usually used in non-profit organizations and then discuss the risks. According to the authors, one of the risks is the possible negative impact of the program on the personal motivation of employees. In the study, the researchers present a study on employee motivation in the non-profit organization before and after implementation of the merit pay system. Based on the results of a study, the merit pay program caused a decrease in employee’s personal motivation. Factors that relate to justice also have an influence on employees who initially supported the merit pay plan after the implementation believed of being assessed unfairly and showed a significant fall in the intrinsic motivation. The study concluded that the merit pays produced decrease in intrinsic motivation for employees.
Mathauer, I. & Imhoff, I. (2006). Health worker motivation in Africa. Human Resource for Health. 4(24)
The study tends to assess the role of non-financial incentives for motivation in cases in Benin and Kenya. The study uses semi-structured qualitative interviews with nurses and doctors from NGO, public, and private facilities. From the study results, health workers are strongly guided by the professional conscience and aspects related to professional ethos. The authors found that many health workers are frustrated and demotivated because they are not able to satisfy their professional conscience and hindered from pursuing their vocation because of lack of supplies and means and also due to inappropriately applied HRM tools.
Human Capital: Dealing with Challenges
Name: alex peterson
Human capital is a collection of skills, knowledge and any other intangible assets of individuals that can be used to create economic value. Organizations depend on their human capital so as to realize their overall objective. In an organization, employees are the source of human capital thus making them the most critical assets for any organization. Human capital provides organizations with the information, knowledge, and skills needed to remain competitive in the market. However, the most organization continues to grapple with the problem of retention, engagement and the provision of benefits and compensation to the employees. When the needs of the human capital in any organization are not addressed, the organization is bound to record high turnover rates, low motivation, and low production. Human resource management participates in the acquisition, cultivation, and retention of human capital. The human resource departments strive to find, recruit and select people with the right set of skills and knowledge that fit the needs of the company. However, it is one thing to recruit and select the best capital, but it’s another task to retain them and ensure they remained dedicated and focused on the organization’s objective.
Benchmarking of human resources strategies has been found to be an effective way of enhancing human capital and improving the overall organizational performance. Specifically, human capital benchmarking strategies have been effective in identifying exemplary practices for human resource practitioners. According to a study by Huang (2002), there are several human resource practices that an organization can adopt including training, participation, and empowerment. Participation and empowerment are considered extensions of job design as they enable employees to perform their jobs. Participation is all about giving employees a voice. Employees must be allowed to voice their opinions and suggestions concerning organizational matters. Instead of managers telling their employees how to do their jobs, the management can encourage employees to participate in addressing issues about their jobs. Employees can pose questions and make decisions on how they can do their job. Such decisions can be made based on the employee’s experience and expertise. Participation also entails engaging employees in decision-making on administrative matters. On the other hand, empowerment is a process of enabling employees to set their work goals, make decisions and solve problems within their spheres of responsibility and authority. In short, employees should have an enabling environment that is flexible enough to allow them make their individual decisions and take responsibility for their actions.
Training is another critical element that organizations can embrace so as to motivate and ensure a productive human capital. Training enables employees to learn specific knowledge and skills so as to improve their current roles. Training occurs based on the training needs of the organization. The management must be in a position to identify the skill gap within the organization. The skill gap is determined by measuring the skills that the company enjoys against the skills that the company expects to have so as to achieve a certain goal. The training initiative is then developed based on the identified gap. Later, the effectiveness of the training is assessed based on the outcomes of initiatives aimed at achieving organizational objectives. The provision of high-impact employee training reduces employee turnover as the employee appreciates the organization’s effort to improve their career growth (Fitzenz, &Bontis, 2002). Training also increases employee motivation which in turn increases production thus enabling the organization to attain its goals. Effective training also improves engagement and speed of employee competency. In short, employees are motivated to stay and work for an organization that demonstrates its genuine interest in the growth and development of its employees through the provision of training opportunities.
The provision of good reward systems can also enhance retention and the performance of employees. According to Akindipe et al. (2013), providing employees with a good reward system helps in improving employee performance. Employees are motivated to work when they are assured that their efforts will be rewarded. Employees leave their employment if they perceive that there is nothing that is compelling them to stay. The presence of an attractive reward system can motivate employees to stay with the company and participate in realizing its overall objective. Rewarding employees after they have achieved their goals and set targets are a critical management tool that most manager and HR practitioners overlook. There is a need for the effective adoption of an effective reward system that can guarantee the presence of a highly motivated workforce that genuinely is working towards the prosperity of the organization.
Organizations can also work towards acquiring generation diversity. Hooper & McCrindle (2006) conducted a study where they provide insights on handling Generation Y employees and generation diversity. Generation Y is confident and has high standards of self-esteem. They have the self-belief, and they believe they can handle any hurdles thrown to them. The Generation Y employee also seeks a workplace that is challenging, fun and financially rewarding. The Generation Y employee is also multicultural, and they perceive diversity as the norm. An organization that desires for excellence must be ready to integrate all generations as part of its human capital. The differences between the practices and ideologies of generation X, baby boomers, and millennials can cause friction unless the management intervenes. For instance, baby boomers are hands-on and like doing things the old-fashioned way. In contrast, millennial is tech-savvy and eager to adopt the latest technologies and strategies to improve their work. The two generations can collide especially if one group desires to retain the status quo while the another group of employees is pushing for change. Differences related to attitude towards, and loyalty towards the employer can also cause conflict and impede organizational performance.
The organization can establish top-bottom and bottom-up communication channels so as to encourage employee engagement. The management must eliminate the wall that puts the management away from the employees. Activities such as decision making on employee roles can involve the employee themselves. It is the employees who interact with each other, different work processes, as well machinery and equipment. The employees are thus well equipped to give suggestions on areas that need improvement. The involvement of employees can also help the organization see and resolve potential problems that would have interfered with the workflow. Similarly, the organization can engage employees in the creation of policies by receiving suggestions, considering them and implementing those that are feasible.
The organization can embrace work teams thus allowing employees to form teams comprising of individuals with different skills and talents. The work teams would work as a unit towards achieving a common goal. After embracing work teams, the organization would allow the employees to plan, organize, direct and control their work. The supervisors will then take the role of a coach rather than a dominating boss. The management must ensure that the supervisors of the various department transition from the role of bosses to coaches. The first step in the shift from bosses to coaches is delegation. The supervisors can learn to delegate responsibilities to employees thus assigning them greater responsibilities. The senior management must also be willing to lead from the top by ensuring that they adopt the coaching form of leadership and abandon the “boss” attitude.
The organization can embrace training and development as a strategy for retaining and developing their human capital. The company can adopt in-house training methods such as coaching, mentoring and job rotations. In strategies such as mentoring and coaching, the older and more experienced employees can work with the younger employees. The old employees can share details and elements of their work experience while the young and freshly-graduated employees can share insights on the latest developments on matters related to their job. Alternatively, the organization can consider off-the-job training methods such as workshops and academic advancement (Fitzenz, &Bontis, 2002). Off-the-job training methods require the organization to finance the training of some of the employees. The employees will have to be away from their work so as to complete the training session.
The organization can adopt a reward system that will guarantee the improvement motivation and performance among employees. The steps to the effective development of a reward program entail the consideration of the goals that the reward program will be supporting. The organization must also highlight the desired employee performance and or behaviors that will reinforce the existing organizational goals. Thirdly, the organization must determine the key measurement of the performance and or behaviors. Fourth, the organization must determine the appropriate rewards that the can provide to performing employees. Lastly, the organization must ensure that they communicate the reward program to its employees so that the employees are aware of it. In fact, the existence of an effective monetary program can improve motivation and enhance performance as the employees work hard to attain and surpass set targets. There are two types of reward packages that the organization can consider. Monetary reward packages are compensations that involve money such as profit sharing and bonuses. Non-monetary awards include organizational recognitions for efforts, flexible work schedules, employee discounts, healthcare insurance benefits, financial advising services, etc.
The organization can work towards overcoming generational differences by encouraging awareness and appreciation of differences that exists across generation. The senior management can create awareness and encourage employees to work towards learning from each other rather than finding faults and differences. The organization can also establish policies that emphasize on respect for each other with emphasis on finding a ground that fosters the spirit of teamwork and working towards the same goal. The organization can adopt strategies such as team building initiatives where the organization takes employees away from the work environment and encourage interaction that is away from the formalities of the office. Team building can foster rapport building as well as trust. Similarly, it can encourage a change of perception as employees begin to appreciate each other. The employees will begin to see each other as an opportunity to learn rather than a threat or competition.
The meeting with the organizational representatives took place on 29th November 2009. Having made previous calls and booked an appointment, I arrived at the organization at 9 am as agreed. The meeting was held at the organization’s boardroom, and those present included the Human resource manager and his assistant, the chief executive officer as well as the secretary. I was confident of my presentation although I was a bit nervous because of the seniority of the management I was engaging within the meeting. Initially, I was to meet with the human resource director and his assistant. However, last minute inclusion of the chief executive officer was made as after he was informed of my meeting. My nervousness disappeared when I joined the executives in the boardroom. There were very friendly and will to listen to my findings and suggestions on pushing the organization forward. After a brief introduction, the meeting began.
The company was particularly impressed with the recommendation to improve communication and opening up channels of management-employee communication. The company believed that by establishing an effective communication platform, they should be able to handle issues before they get out of hand. The company admitted that in the past they had been caught unawares when employees went on strike or go-slows due to problems that the management was unaware of. The management also admitted that poor communication also contributed to high employee turnover. They agreed that the presence of an effective communication platform would allow employees to air their issues and grievance before they affect the organization, negatively. The management agreed that they would begin to involve employee representatives when making critical organizational decisions so as to eliminate the element of surprise when execute decisions are made.
The company also appreciated and promised to integrate intensive training and development initiatives. The acknowledged that their training and development strategies have not been aggressive since they perceive the initiative as expensive and a detraction from the purpose of the employee i.e. to work. They appreciated the demonstration of the relationship between training and development initiatives and employee productivity. I was able to demonstrate to them that a training session may be expensive at the initial start, but it has significant returns since the trained employee bring new knowledge and skills into the company. The management also appreciated the insights that the old employees can offer training to new employees. The presence of cheaper training alternatives such as mentorship and coaching can be adopted and remain significant as comprehensive and costly training initiatives. The management appreciated that training does not have to be costly and dent the budget (Akhter, & Aslam, 2016).
The management also appreciated the recommendation to increase awareness and appreciation of generational difference. The management admitted that generational differences had been a cause of conflict in the organization. The management also admitted that it has been slow to hire millennial because they find them to be disruptive of the status quo. The millennial comes up with grandiose ideas that the management sometimes finds to be unrealistic. They appreciated that the older and more experienced employees prefer to uphold existing laws and policies of the organization without question. The management appreciated that the awareness initiative might be effective in curtailing conflict and generational differences within the organization. Moreover, intensive awareness and sensitization may eliminate the stereotypical tendencies that the employees have against each other.
However, the management was skeptical on the need to revise their reward system. The management acknowledged that an attractive reward package motivates employees and increases productivity and retention. However, the management felt that the organization did not have the financial capability to provide most of the incentives suggested. For instance, the management acknowledged that their profit margins are low and thus it would be unrealistic to give employees of the company’s share. They also acknowledged that the company is not in a position to provide regular salary increases unless the financial health of the company improves. The management argued that increases the employee’s salary would mean that their operational costs would increase the company’s profits. In the end, the company will be spending more on employee salaries that any other expenses in the organization. In the long-term, the organization believes that such a strategy would leave the organization in the precarious position of laying off some employees so as to cut costs. The management, however, agreed to adopt non-monetary incentives before foreseen financial improvements in the future.
The management also found the adoption of work teams to be tricky for several reasons. First, the management was concerned that some employees may take advantage of the team spirit and relaxes at the workplace. They indicated that it is possible for an employee to take advantage of a group initiative to underperform but still enjoy the benefits of success. The management questioned how they would tell apart hardworking employees and employees that are unable to meet their job instructions. The management also demonstrated concern over the effectiveness of work teams in a scenario where the management wants to recognize individual effort. The organization indicated that they engage in individual appraisal thus their concern over how they shall access work teams. The management argued that they can embrace work teams when they are specific projects that require the pooling together of employees from different departments.
The meeting went well, and I believe it was a success. First, the management was eager to hear about my proposal in light with the challenges that the organization is experiencing. Moreover, the management was engaging, and the meeting was more of a dialogue and discussion rather than a presentation. The management was also impressed with the extensive research and facts that I used to support my recommendations. They realized that the recommendations that I provided them were not based on hearsay but facts and evidence of best practices. The presentation was also a step by step process where I provided them with evidence and insights to an issue and provided the recommendation. The management then engaged me in discussions as they shed light on the position of the organization. From our discussion, it was possible to determine the feasibility of a suggestion. For instance, the adoption of an aggressive reward system may be ideal as a retention strategy for human capital. However, the financial position of the company dictates that the management cuts down on its expenses.
During the presentation, I realized that the extent of generational differences in the organization is extensive. I also realized that the generational differences could be one of the reasons why the organization is performing poorly regardless of effective planning. The stereotypical nature of the senior management influences the recruitment and selection process as the selection team opts for older candidates. What the organization fails to realize is that the millennial brings fresh ideas and fresh perspectives to issues within the organization. Millenials are in touch with the changes in the market and thus will have a better understanding of the approach that the organization can adopt (Tolbize, 2008). It is indeed true that millennials are a handful to handle since they crave for a challenge and changes but they provide organizations with the jumpstart they need to move towards success. Millenials are aggressive and more conscious of their competition and thus will be willing to take risks so as to stay ahead of their competitors.
Employees are the assets that are critical for any organization and thus the need for organizations to focus on ensuring they are satisfied. Employees that are dissatisfied with the job and their role in their organization will leave at the slightest opportunity. Dissatisfied employees will also be on the lookout for better employment opportunities and thus will never be productive. Employees provide the human capital necessary for the success of the organization. Organizations must, therefore, work toward retaining their employees. Some of the strategies that organizations can adopt include the establishment of a seamless communication network within the organization. There should be no barrier to communication between the management and the employees. Employees should not feel intimidated by the management. Communication must be open and honest. Strategies such as involving employees in critical organizational and administrative decisions give the employee the feeling of importance. Employees appreciate when the management seeks their input before making critical decisions. The management does not have to engage all its employees, but they can have representatives who present employee opinion, suggestions, and ideas. The retention of human capital can also be effective with the adoption of aggressive reward packages. It is critical for an organization to adopt a reward package that matches and also surpasses those of the competitors. An attractive reward package comprises of monetary and non-monetary incentives that demonstrate the management appreciation for the employee’s efforts.
Employees are motivated to remain productive if they realize that their employer is watching and appreciating their efforts. Training and development initiatives are also critical in ensuring that the human capital is retained at any organization. Employees appreciate an organization where they can grow beyond what they had at the start of their careers. The provision of training and development opportunities provide employees an opportunity for growth and career advancement. An employee acquires new knowledge and skills while at the workplace and thus acquire consideration for promotions. The provision of training and career opportunities increases job satisfaction and morale among employees. It also enhances employee motivation thus fostering productivity and the ability of the organization to attain its overall objectives. Training and development initiatives also enhance employee innovation as they engage in the development of new products and services. Training and development initiatives also reduce employee turnover and thus ensuring that the organization has adequate human capital. Employees who believe that their employers have the best interest in them work are motivated to remain in the company and see it succeed.
Adeosun, O Ogunyomi, O & Akindipe, O. (2013). Effective reward system and worker’s productivity under dynamic socio-cultural and legal environment in selected Nigerian insurance industry. Alleviation, income redistribution & rural development in developing countries.402-421
Akhter, N., & Aslam, N. (2016). Impact of Training and Deveolpment, Performance Appraisal and Reward System on Job Satisfaction. International Review of Management and Business Research, 5(2), 561
Fitzenz, J &Bontis, N (2002). Intellectual capital ROI: causal map of human capital antecedents and consequents. Journal of intellectual capital, 3(3)
Hooper, D &McCrindle, M (2006).Generation Y, attracting, engaging and leading the new generation at work.Drake International White Paper, 3(1)
Huang, G. et al. (2002). Benchmarking the human capital strategies of MNCs in Singapore. An international journal. Vol. 9(4)
Tolbize, A. (2008). Generational differences in the workplace. University of Minnesota
Name: alex peterson
Table of Contents
Comprehensive capabilities 7
Brand power 8
Financial performance 8
Apple Retail locations 8
Tailored software and hardware systems 9
Competitive strategy 10
Premium pricing 11
Blue ocean strategy 12
Executive summary 15
Apple is a global company in the field of innovation and electronics. Apple Inc is the first American multinational successful personal computer firm that was established in 1976 by Steven Wozniak and Steve Jobs (Apple, Inc, 2012). The company manufactures, designs, and markets personal computers, computer hardware computer software, and mobile devices such as iPod and Iphone. It also sells different accessories and peripherals such as a speaker, printers, headphones, and storage devices. Apple has been leading in the technology industry, and it manages to win its competitors through being an innovator in the technology market. In the past ten years, Apple Inc has been experiencing a dramatic increase in demands for its products and services (Jinjin, 2013). The main factor that helps the company to gain a competitive advantage is that the company usually continuously strives a new way of offering innovative products to its consumers and also tries to increase their market share. Due to several success factors, Apple has become an outstanding company in the technology sector.
In the past five years, Apple’s shares soared 255% and most investors attribute the growth to the popularity of the IPad and Iphone (Apple, Inc 2015). The company has managed to become a diversified design powerhouse that focuses on innovating products that revolutionize and define industries and also reshape the customer’s perception of the products and functionality. Regarding profit, market capitalization, consumer cachet and revenue, Apple tends to rank top. The Iphone in its seventh generation and the ninth year is seen as the company’s golden goose that tends to be generating about two-thirds of the company’s revenue (Jinjin, 2013). Some familiar Apple products such as Mac Book computers and IPad tablets tend to account for 10% of the company’s sales and the services that the company offers like App Store, iTunes, and Apple music does add about 10% to the sales.
The main market of Apple Inc is located in the western countries. The countries include United Kingdom, France, United States, Italy, Germany, Canada, China, Australia, and Netherlands. Most of the markets where the company operates are usually located in the developing countries. Among the products that the company produces, Iphone tends to be the most popular product in the developing and developed countries. The main products sold in the developing countries are usually more expensive, and they have higher technology than the main products sold in the developing countries (Apple, Inc, 2012).
Apple’s target group is people between the age of 15 and 45 who are in the high and middle living standards (Jinjin, 2013). The main products that include iPod, iPhone, and iPad are on the middle level. Their prices tend to be fit with the living level of then developing countries (Burrows, 2010). The developing countries tend to have bigger populations than the developed countries and by Apple expanding the market in the developing countries; it is a good way of increasing the company’s sales.
Apple normally operates through five operating segments which are Europe, Japan, Americans, and Retail (O’Grady, 2009). With the use of online stores and the retail stores, Apple sells its products across the world to different consumers, government, enterprises, and customers. The company does distribute its products through resellers, national and regional retailers, and wholesalers. Apple also sells most of its products and third-party products directly to customers using its sales force in its retail and online stores (Apple, Inc, 2012). This strategy as used by Apple benefits the company in several ways. The firm makes a lot of money on direct sales, and it does not have to compete against the marked-down prices that are offered by its resellers (Bajarin, 2014). Because Apple’s retail operations are the most profitable in the world, undercutting the prices for the sake of a wider distribution networking will be counterproductive.
Apple has been very important to the growth of the economic market regarding technological competitiveness. Apple has been very good to American’s competitiveness regarding the global technology leadership. The iPod kicked off the trend; however, the Iphone has managed to set it in stone. Some of the most desired consumer technology products that are bought by many people come from Apple (Burrows, 2010). Apple has managed to achieve success in the market due to developing products using unique features and a command premium price (Jinjin, 2013). During the introduction of iPod, the company was considered to be a digital company instead of a computer manufacturer. With the invention of iPod, it has resulted in a great change in the portable music technology. The competitive advantage that enables the iPod to dominate the market was the sleek design, large storage capacity, and simple user interface (Apple, Inc 2015). Each new product that Apple usually produces tends to be a new form, function, and feature.
As an organization that specializes in the design, the company has sought to redefine the boundaries of the industry through innovating products that look different from what the competitors are offering and also design products that are easy to use and are consumer friendly (Bajarin, 2014). When Apple launched its first generation of iPhone in 2007, it applied the differentiation strategy as the main strategy when the company was making a bold entry into the smartphone industry.
Apple has been able to increase its growth through expansion. With the increase in technology, Apple Inc has expanded into global markets, which have helped the company to record unprecedented levels of revenue and profits (O’Grady, 2009). One of the strategies that the company uses for international expansion is Joint venture. Apple did file for a trademark Joint Venture in China. The Joint Venture is an agreement between two or more parties to take a particular business, where the parties share the loss and profits of the enterprise. Using the Joint Venture trademark, Apple offers technical support, maintenance support, consulting services, and training services (Bajarin, 2014). The acquisition is also another strategy that Apple uses in expanding in other markets. The use of acquisition has provided the company with a competitive advantage. As Apple acquires different companies, it manages to increase the sales growth of its products through diversifying its customer’s need. In 2010, Apple acquired Siri that was a software company, which developed a voice-command technology (Apple, Inc 2015). With this technology, the company uses it in its Iphone to make a conversational interface, which greatly helped Apple to capture the attention of Iphone customers.
Apple provides a broad range of products and services, and the company tends to be a fierce competitor in several industries. The products and services that Apple Inc offers are highly competitive and Apple tends to be confronted by aggressive competition in all business areas (Apple, Inc 2015). The markets are normally characterized by frequent product introduction and the rapid technological advances that do have increased capabilities and also the use of mobile communications and media devices and personal computers.
The smartphone industry tends to be dominated by Samsung and Apple that over the last six years have taken together 88.1% of $215 billion profit generated. When comparing these two leaders, Apple took away around 62% of profits while Samsung stood with 26.1% (Jinjin, 2013). Samsung tends to be the main competitor of Apple; however, Google, which is the developer of Android software, is also a major competitor of Apple in the smartphone operating system market. Google tend to be a major competitor in several platforms including cloud storage with the Google drive against the iCloud service of Apple.
HP is also a major competitor. The firm provides hardware and software services to medium, large, and small-sized businesses across industries. HP does have an extensive range of IT products to provide, and it is Apple’s competitor in regards to computers (Burrows, 2010). As a competitor of Apple, HP does control the largest segment of the business market, but it does not provide other products other than personal computers and accessories. Microsoft is also an Apple competitor that tends to control about 94% of the operating systems (Apple, Inc 2015). The company usually makes products that last a long time and its OS is compatible with everything.
Apple Inc has been a leader in innovation for a very long time. Apple may not be the first to introduce a product; however, in most times, they are usually the first to lower the price of a product and mass produce a product (O’Grady, 2009). Some of Apples competitive capabilities include high-quality customer service, innovation in mobile device technology, strong marketing team, strong brand reputation, and a strong financial performance. By focusing on these competitive capabilities, Apple has managed to create a range of core products that not only perform as a means of fulfilling a need, but also a representation of a lifestyle.
Apple has a very powerful and a good reputation. With the super-eminent customer-focused services strategy and its aggressive advertising strategy, the excellent reputation and image have been built up among consumers. Forbes has listed Apple’s brand as the most valuable in the world (Apple, Inc 2015). Apple’s brand is the most reputable and recognizes across the world. It I the leading position in the smartphone marketplace and its wide ecosystem of products has led to the brand awareness that any other technology company cannot match.
Another capability of the company is its strong financial performance. From 2012 to 2015, Apple’s revenue grew on average by 16.44%, and during the time, the profits of the company grew by 27.94%. The company has been observing a successful growth, and it has managed to maintain a high profit margin (Zylla-Woellner, 2013). Both the high profit margin and the revenue growth indicate the ability of the company to manage its operations efficiently.
Apple Retail locations
The introduction of the Apple stores has offered the company with a significant physical present to act as a sales location and an advertisement. These stores usually allow Apple to tightly control the image of its brand and also offer excellent customer service. Apple tends to top most of the retailers in the in-store sales. The Apple stores are of great value to the company and success, which tend to be a relative rarity in the industry (Jinjin, 2013). The retail stores aim to ensure that the Apple personnel offer valuable services of advice to consumers and consumers also have a real touch of the products resulting in a unique consumer experience and also a direct reach to the end consumers. With the use of this channel, Apple is capable of controlling the customer experience including sales support, shelf placement, and customer service.
Tailored software and hardware systems
A major capability of Apple is its ability to develop and build highly integrative systems with software that are designed specifically for the hardware that it runs on (Jinjin, 2013). The Apple’s closed system style is normally unique in this industry, and this typically relies on the third party software. Such a capability originates from the combination of the software development teams, design teams, and hardware engineers that are employed by Apple Inc. there tend to be no other company in the industry that has a system like that of Apples, and it is likely to cost billions of dollars so as to imitate it.
Apple does focus so much on creating an innovative product that has a unique design and of high quality. Some of the innovative products from Apple are Iphone, Imac, IPad, and Ipod. The innovative aspect of the company has enabled it to gain a powerful brand name and to emerge into the electronic market (Zylla-Woellner, 2013). Such innovative spirit has greatly contributed a lot to the creation of the Apple chain of world class online, retail stores and the revolutionary iTunes Stores. As a leading innovative company, Apple has approved its capability of offering high-quality products with outstanding design.
A competitive strategy that Apple uses is product differentiation. Apple uses differentiation to separate its products from those of other electronic manufacturers. Apple employs a differentiation strategy so as to be able to target the section of the consumer market and also send a powerful message that its produces are unique. Apple does a very good job of creating products and services, which are special and unique (Meyer, 2016). The Apple brand tends to be very strong that even when the competitors catch up regarding the product performance, people still think that the Apple product is unique and different. The differentiation strategy that Apple uses helps the company to drive down costs.
With differentiation strategy, Apple products are always designed to be ahead of the market compared to its peers (O’Grady, 2009). Irrespective of high competition in the industry, Apple always succeeds in creating demand for its products and give the company power over prices through innovative advertising, product differentiation, the hype around the launch of new products, and ensured brand loyalty (Zylla-Woellner, 2013). Through focusing on the customers who are willing to buy more and maintain a premium price, Apple has been able to set an artificial entry barrier to the competitors. The differentiation strategy means that Apple is always seeking to set itself apart from competitors through features that are beneficial to the customers.
The differentiation strategy used by Apple tends to be a major strength for the company. Apple’s products are normally designed with the aim of addressing the concerns about the lifestyle of consumers that make the graphic system and design of Apple’s products to be superior to its rivals’ products in the same market segment (Meyer, 2016). Apple’s Inc software is different from other competitors, and its product’s hardware is also in the upper class. All of the products produced by Apple are made using high-quality materials such as aluminum combined with comfortable designs. All the features considered when making the products tend to make consumers feel that they have a valuable and unique product when they have an Apple product (Apple, Inc 2015). The company’s ability to differentiate its products has helped to generate a competitive advantage. The company’s ability to think differently in its design of products has helped it to keep its competitors following Apple rather than truly leading the market forward by themselves.
Apple has always been a leader in the market, and its premium pricing strategy has contributed to the success of the company. The products sold by Apple are relatively expensive when compared with similar products from other companies. For instance, an Iphone may be three times or more expensive than the flagship Android smartphone of other competitors. Apple has been charging a premium price without losing sales, and still its customers love their products. Apple does not compete on equal playing ground with its competitors. Because of its differentiation, Apple normally writes its rules and come up with innovative ideas that no one dreamed of the year in year out (Zylla-Woellner, 2013). Due to the innovative capability of Apple, they have been able to charge a premium price for all of its products and the company has been enjoying remarkable sales growth and margin for a very long time. It is possible to recognize an Apple computer in the middle of hundred others because of their distinctive casing and the signature logo (O’Grady, 2009). When the computer makers are fighting for sales with low prices, Apple Inc tends to hold its ground and command premium. The pricing strategy that is used by the company tends to be effective as it prevents retailers from competing directly with the Apple’ stores (Meyer, 2016). The strategy also ensures that no one reseller do have an advantage over another. With this strategy, Apple can keep its distribution channels clean and also make more money using direct sales.
Some of the cheapest products by Apple are usually in the mid range; however, they ensure a high-quality user experience with their features. The user interface and hardware are designed to offer a lot of value for the price that ensures that profits are always high (O’Grady, 2009). The premium pricing used by the company has enabled Apple to promote and maintain a favorable perception among its loyal customers. Some Apple customers do not show any concern about the price because most of them believe that expensive products tend to enjoy exceptional reputation or it represents an exceptional quality (Zylla-Woellner, 2013). Thus, Apple usually positions its products as superior over those of its competitors. The premium pricing strategy used by the company completes its reputation of offering more innovative and superior products.
Blue ocean strategy
The blue ocean strategy tends to be a development tool that most companies use so as to gain competitive advantage and also to sustain their market position. In many cases, businesses usually succeed through focusing on the activities of competitors. However, the blue ocean strategy is commonly used by companies so as to help identify the uncontested market space (Alumair, 2016). Considering the competition in the industry, the Blue Ocean strategy used by Apple has enabled the company to increase its market cap. The blue ocean strategy has helped Apple, Inc to improve its innovative strengths (Alumair, 2016). In the case of Apple, the company has ventured in blue oceans to improve its internal processes. When using this strategy, instead of competing for head on with the market leader, the strategy does define a new market and drafts the boundaries of the space showing usability and applications.
Apple has used the blue ocean strategy to remain relevant in the digital industry. The company has experienced a problem with trading down through free file sharing network and the subscription based services (Alumair, 2016). In this situation, Apple looked across the strategic groups and realized that there was untapped demand in the channeling of digital music. Apple aimed at maximizing the opportunity through offering an extensive selection of music at an affordable price (Meyer, 2016). With iTunes music store, Apple managed to attract the potential buyers. When using the blue ocean strategy, Apple has been able to identify its pace, where it can design, sell, and increase profits using exceptional products in the potential new markets. With the blue ocean strategy, Apple, Inc has continued to introduce groundbreaking new products that are perfectly timed so as to achieve a first-mover advantage (Alumair, 2016). Apple also uses the strategy to continually reinvent itself to enter new product categories and also avoid being obsolete in the competition of maturing product markets. Apple continues applying the blue strategy, and it is always seeking to create and capture new demand instead of just competing in the market for traditional products.
Apple’s competitive strategy has focused on building strong customer loyalty through meeting the needs of the customer more effectively with their unique designs and product innovations. The strategy has been of significant advantage to the company and has kept Apple in front of the competition in the new product introduction and updates of the existing products (O’Grady, 2009). The business strategy used by Apple enables the company to control its unique ability to design and developing its operating system, application software, hardware, and services. A recommendation for Apple that can help the company improve its comprehensive capabilities is to consider developing a close relationship with suppliers.
Apple needs to know that there are few suppliers of key components needed in the personal computer manufacturing; hence, developing close relationships with the suppliers is of significant importance. Instead of searching for suppliers of a lower cost, maintaining an exclusive and collaborative business relationship can help to mitigate the power of suppliers and also lock in attractive component prices (Brassington & Pettitt 2007). Apple should also seek exclusivity arrangement with third parties. As the company continues to build a relationship with third parties and enter into exclusive arrangements with them, it will help to lock out competitors; thus, enabling Apple to gain favorable business deals.
Apple has to continue innovating so as to maintain a competitive advantage because its business is highly dependent on rapidly changing technologies. The company operates in an industry that experiences high levels of completion and because there is a high presence of well-established players, for Apple to survive, it cannot afford to be complacent (O’Grady, 2009). Apple is usually known for developing products that are unique and user-friendly. Therefore, a recommendation for the company is to continue tailoring their products in simpler ways so as to make it easy for users of other platforms to build a comfort level that will attract them to the Apple products. Such an incident is very common in the PC industry where the traditional users of Microsoft tend to have difficulties adjusting to Mac. Therefore, Apple should consider a better way that will make the transition from PC to Mac easier.
Another recommendation for Apple is to continually invest in research and development so as to stay ahead of and lead the radical product and technology discoveries. As Apple Inc is following the blue ocean strategy, the future of the company tends to be highly dependent on its ability to continue developing improvements in the products and technology (Zylla-Woellner, 2013). Therefore, if Apple happens to fail to produce commercially viable innovations to enter the market as a fast mover, it should consider expanding its range of products and intellectual property through the acquisition of businesses, licensing, or joint development projects. Another way of improving the firm’s comprehensive capabilities is through continuing with the wise expansion of Apple stores. The Apple retail stores have been very successful and Apple can further this success through establishing new locations in the United States and abroad. With implementing the expansion, Apple needs to be very careful so as to avoid over-saturation so as to maintain their status as being a destination.
Apple is an innovative company that serves different industries including computer hardware, consumer electronics, computer software, and digital distribution. Apple Inc operates in more than 120 countries around the world. Apple has opened retail stores in more than 18 countries around the world. The primary competitors of Apple are Amazon.com, Samsung, Dell, Microsoft, Google, and many others (Zylla-Woellner, 2013). Irrespective of the competition, Apple has remained relevant to its customers and has emerged as a market leader in the industry. The company continues developing new products and technologies, and it also enhances the existing products that tend to expand the range of its product offering and the intellectual property through acquisition and licensing. Based on this analysis, it is clear that the main idea used by Apple revolves around the highest value deliver for its consumers. The competitive strategies used by the company has enabled the firm to provide high-end products as luxury technological advancement items for its consumers who are willing to pay a relatively high margin. Apple's competitive capability is that it maintains a close relationship with its mass customer segment and through the stand-alone retail store that tends to provide for value added (Zylla-Woellner, 2013). Apple has set apart from its competition by the combination of innovative idea, successful retail strategy, premium pricing strategy, strong brand image, product differentiation, and its financial performance. While there are several other factors that provide the company its competitive advantage, these factors tend to lead to its astounding success. For Apple to continue leading in this industry, it’s competitive strategy need to evolve.
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There are various frameworks proposed by scholars and consultants for analyzing strategic situations. Strategy in business is a catch term that to present various meanings. Executives of a business use terms like acquisition strategy, branding strategy, and services strategy to mean various aspects they are explaining at a given time. Generally strategy by the CEOs means an overreaching and integrated concept of how a business will achieve its goals. A unified strategy of a business should have various elements.
There are five main elements that a strategy should have. These are; 1.) Vehicles; meaning how the business will reach its final goal. 2.) The second is arena, which means the areas where the business will be active. 3.) The differentiators that determine how a business will win in the marketplace. 4.) Staging. This so the sequences and speed of moves. 5.) Economic logic meaning the way a business will attain its returns. The first section of this paper will evaluate these five elements of Home Depot strategy. The second part will be on Home Depot SWOT analysis and give recommendations on a strategy to enhance strengths and opportunities for Home Depot. The last part is on a plan for Home Deport to deal with its threats and weaknesses.
The elements of strategy
The strategy of Home Depot has various important elements. First are the Low prices. The company offers competitive and low price, which is a central feature in the concept of warehouse retailing. The company’s strategy is to be a low cost provider. Home Depot strategy has the arena through enhancing its main retail network via unique and innovative merchandise. Home Depot aims to change needs by focusing on home improvement market. The company taps into the market of residential builders through acquiring three top ten providers in 2002 through installed flooring (Annual Report, 2012). Through the "customer-back" initiative for decision making, Home Depot is dedicated to establishing a positive relationship with its customers. This is through the do-it-for-me (DIFM), the professional, do-it-yourselfers (DIY), to many existing and emerging segments of customers (Annual Report, 2012). Home Depot aims to offer the best products and services (Annual Report, 2012). These are the areas of the business strategy that Home Depot aims to be active.
Vehicles are the means that assist company how will we get there. Home Depot has a unique culture that is based on commitment and dedication to the entrepreneurial spirit. The company through its entrepreneurial spirit is a vehicle of attaining its goals. The elements of this entrepreneurial spirit involve caring for the people, being connected to communities, providing excellent customer service, doing the right thing, building relationship, creating of value to shareholders, and respecting all people.
Attaining a compelling marketplace does not mean that the organization has to be at the extreme end in differentiating. However, it means having the best differentiators combination that confer with the given marketplace advantage. This is a philosophy that Home Deport uses so as to gain competitive advantage. Home Depot has presented a challenge on traditional retailing assumptions. Unlike other retailers, the company has managed to attain its success through differentiation. The traditional approach in retail marketing is based on the idea that, since the inventories of products is identical, and then differentiation in its meaningful sense has to be built through location convenience and price advantages. However, for Home Depot this is a wrong assumption. The accessibility of products and low prices is within their concern, but differentiation for Home Depot is based on the people. The employees of the company exhibit powerful loyalty, and this enables them be the main resource of the company. These employees have trades expertise and work in building trades (Galup Business Journal, 2000).
Staging is a strategic element that is determined by the resources of a company. Staffing and funding of an initiative at any given level is determined by a strategic campaign and its urgency. Credibility and the pursuit of early winning do also impact on staging. Home Depot has tactics of gaining early footholds. The initial strategy is placing emphasis on low prices as a competitive strategy that has allowed the company to attain the strongest foothold in the industry that it is enjoying today. With the increased and stiffening competition, Home Depot has introduced new services that aim at differentiation. This is not simply with the aim of appealing to the masses, but tailoring more specific and individual products to fit individual segments of customer base. Home depot has, therefore, used low cost as its strategic staging and has made major efforts in differentiation of its products so as to further hold the market (Thodore, 2012). Through staging, Home Depot has managed to get new diversifications in the industry and gained international markets.
Home Depot, just like other major Fortune 500 companies, has established high bred cash balance plans and contribution plans. Due to the economic downturn, the company is expecting to gain a large share in its professional market through providing line products that are slightly below the high end lines. In the recent few months, Home Depot has managed to attain its profit and growth despite the volatile market. Since January 2013, Home Depot has bounced back its moving average by establishing a buy zone. The housing market rebound has significantly contributed to the market growth by delivering 285 in the rise of profits and 7% sales gain (Investors. Com, 2013).
General External environment
Home Depot is well known for the creation of opportunities through charitable contributions and community awareness. The company has undertaken strenuous efforts of impacting the community and being able to present to the community its good image. Though this can be seen as something out of the company’s goodness, business minded people see this as a way through which the company is developing its opportunities. In the company’s effort to help out people, the company has maintained constant business even at times of major economic recessions. This is by allowing its customers to pay low process to fix problems and buy materials.
This in the end gives Home Depot and opportunity that is not earned by industries and competitors. The company has over the recent years been increasing its earnings, and it is an amazing aspect at the times of recession. The company has managed to benefit from the construction of real estate expansion. This has resulted to reduced interests rate. Home owners through the low prices offered by Home Depot are able to save money and refinance their homes by putting money back to their homes (Home Depot, 2013). Most of this money goes to the various stores belonging to Home Depot.
The company bases its stores in various demographic studies. In 2002, the company increased its stores to more than 1000 as an effort of its opportunity. The stores are situated in highly populated areas close to the competitors. For example, in most of the southern areas, there is the “Do It Yourself,” stores. The customers living in the Southern region do have a culture of appreciating quality. The company has further explored the global market such as opening stores in Canada, Mexico and China (Yahoo Finance, 2002).
The main threats facing Home Depot is the down spiral economy in the United States. Every industry is affected by the economic downfall. Despite the fact that Home Depot has managed to maintain stable numbers during this period. It cannot render it safe, and there is a constant worry on how to maintain growth, expansion profitability. At the times of recessions, businesses worry about the customer’s spending.
Home Depot is also faced with the threat of completion. The main competition comes from Lowes since it competes at a national level at a consistent basis. Lowe and Home Depot have almost expanded at an equal rate. This poses a threat to Home Depot because the company will consistently have to differentiate its products and services. Home Depot due to the stiff competition with Low has to ensure that it does not have to sell almost identical products and at the same price as that of its rival. If Lowe will continue to grow in the same rate as Home Depot, then this is a vital aspect to watch out.
The organizational structure of the company is one which has established various stores in a single market. This is with the goal of having multiple units to serve a single market. This move is a weakness that the company has. The sales of the third quarter fell because of this strategy. Therefore, there is a need for Home Depot to taking the move of locating these stores apart and also to diversify the location of the stores. The decline of stock prices is a major weakness that Home Depot has to deal. This is because it will lead to shareholder dissatisfaction. There is also the challenge of lack of training, characterized by slow recruitments and training of new workers. Finally there is the challenge of Depot overload for it results to clustering and reduced earnings.
The company has topped with the implementation of modern day technologies in every store. The company has extended the amount spent on Research and development so as to lead to better systems. Implementation of digital business systems and condense operations.
Home Depot provides SPI (Service Performance Improvement) service that aim at providing customers with an enjoyable shopping experience. This reduces the culture of goods in shelves. The company introduced the self-checkout registers and this gives them a sense of control.
There are minimal chances of new entrants since the industry has attained its maturity. In cases where a new competitor aims to enter the market, it is put off by the popularity of Lowe and Home Depot
These two companies at the end of the day go home with most of the business. Therefore, there are minimal chances for a new company to enter the market so as to compete with the giant companies in the industry. The companies have already established their brand names and companies will always remain faithful and loyal to them. Home Depot has also managed to reduce its costs, and this has given Home Depot a chance to sell its products at the least price possible.
Rivalry among firms
Home Depot has to compete with 10 competitors, but Lowe Cos Inc is the main one since it competes with Home Depot at a national level. The other competitors are; Home base Inc, ACE Hardware, Woolham Lumber, Hughes Supply and True Value. The competition facing Home Depot is above the pace set by the industry. It has no equal competitor (Home Depot, 2012).
The industry has grown with regard to the competitors. However, there is no any other company that has a similar size as that of Home Depot. This enables the company to sell low price products compared to the smaller companies. The company provides customers with a diversified line of products because of its major resources and large corporate size. Customers are aware of the products offered by Home Depot and will prefer them than those of Ace Hardware. The industry does not have a fixed cost. Home Depot and other companies in the industry do not work on the same set and restricted schedules. Home Depot enjoys its option of buying resources and goods as needed. Via logistics the company is able to decide how much, where and when questions should be related to the demand of its products and its supply.
The increasing of market share for Home Depot has been through the opening of many stores in various parts of the country. The new property and growing real estate’s gives the company an opportunity for growth in future (Home Depot, 2013).
Fear of substitute
The industry does not create substitute services. Companies can only develop substitute services via lumbar sell and deliver them at a lowered cost to customers. Such places are not known among competitors, and this poses a major pain in the provision of substitute service that can be offered at a much lower price compared to that of Home Depot.
Buyer bargaining power
Buyers can decline the price of a product. Home Depot sells numerous products at a much lower costs that that of the competitors. The selling price for Home Depot is, therefore, one which customers are comfortable with. This makes the buyers buy products from Home Depot. There are no many negotiations with customers before agreeing on a price.
The stakeholders for Home Depot are companies which have contracts for the products to be sold by Home Depots’ stores. There are state regulations and city regulations that Home Depot has to abide. These shareholders have a minimal share when compared to other large companies.
Home Depot sets its price levels with the suppliers. The large quantity of products makes up the profit of each product. The main competitive advantage that Home Depot has been the large number of suppliers.
Value chain impact
Home Depot can provide products at a low price because it is able to eliminate distributors. Home Depot has its line of distributors and this result into a reduction of costs
Addressing weakness and threats
Home Depot has to have innovative and new ways of differentiating its products so as to deal with the competitors, mainly from Lowe. The company should not simply focus on reduced prices since this is an economic issue that may contribute to stagnant growth and low profitability. The company has to focus on maintenance costs. This is to prevent union organizational issues.
This paper has presented the five elements of that define Home Depot’s strategy. These are staging, vehicle, economic logic, differentiation, and arena of the strategies used by Home Depot for achieving its objectives. The paper has further presented the strength, weakness, opportunities and threats faced by Home Depot. The SWOT analysis has presented the internal environment, industry environment, and the overall industry that Home Depot is in. This includes a plan on how to deal with the mentioned strengths and weakness within the value chain.
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Research Topic: How does the scarcity of a resource such as oil or computer technology, affect your daily life?
Impact of the Scarcity of Resources on the Daily Life
Attaining sustainability in the availability of scarce resources is the principal objective of economic activities. Excessive dependence on oil energy is a primary cause of degradation of natural resources. Resources are components of production; they are used to produce goods (Blinder & Baumol, 2012). Scarcity is the lack of enough resources to produce goods sufficient to satisfy human wants. Scarcity is a fundamental problem of economics (Frank & Bernanke, 2000). The scarcity of key resources affects the production possibilities through its effect on the factors of production including land, capital, entrepreneurship, and labor. The key questions in economics are what, how, and for whom to produce goods and services. Land as a factor of production encompasses all natural resources, including agricultural land, minerals, water, and wildlife. Water, oil, natural gas, phosphorus, coal, and rare earth elements such as scandium are natural land resources that are most drained by the human population. Oil is a scarce natural resource, and hence, is a critical economic resource.
In line with the outlook of the demand side of natural resources, the projections of the increase in global population suggest a rise of 32% from the current 6.9 billion to 9.1 billion in 2050. In addition to population explosion, there is also the effect of the emerging economies such as china, India, and Brazil, which harbor an increasing number of affluent consumers. These emerging economies are heightening the effect of the scarcity of natural resources particularly the demand for energy and protein-rich diets including meat and dairy products. In terms of production, diets that are rich in meat and dairy products are more resource-intensive than other diets. The rising demand for energy creates an arbitrage relationship between food and fuel (Frank & Bernanke, 2000). In line with the relationships discussed, the rising demand for key resources is expected to emerge by the year 2030. For instance, the World Bank projects that the demand for food products will increase by approximately 50% by 2030. In particular, meat-based products will have their demand rising by 85% by the same year. In its 2009 World Energy Outlook, the International Energy Agency projects an annual 1% increase in the demand for oil between now and 2030. The current demand for oil is 85 million barrels per day. Adjusting this for the annual increase in demand, the daily demand for oil in 2030 will be 105 million barrels. Due to its scarcity and its significance in production, oil has an immense impact on the production and prices of basic human needs such as food (Blinder & Baumol, 2012).
Purpose of the Study
This paper examines the impact of scarce resources on the daily life of a person, using oil as a sample scarce resource. The study also explores the solution that has been proposed an alternative source of fuel.
Results and Findings
Experts in the energy industry believe that is on the verge of reaching the peak of global oil extraction (Frank & Bernanke, 2000). Once the world attains the peak of oil production, the world will witness a decline in the easily available supply of oil. The price of fuel will increase drastically. Unprecedented high social, economic, and political costs will result. The increase in the global prices of oil suggests that the energy market has entered a critical period of scarcity. The implications of the scarcity of oil could be significant and far-reaching (Hamilton, 2008). Oil is a critical factor of production. In addition to being a widely utilized consumption product, significance of the use of oil includes transportation and production of other commodities. Oil is a highly traded commodity. In the period between 2007 and 2009, its annual exports averaged USD 1.8 trillion. This translated to almost 10% of the total world exports. The significance of oil in the global trade implies that shifts in the oil market conditions have both a direct and indirect impact on human life through its consequences on inflation, poverty, and external imbalances. A decline in the availability of affordable energy will cause a significant impact on food production and, the cost of transportation of products (Friedman, 2002). The scarcity of oil affects the daily life of a person in the following ways.
Production of Consumer Goods
The rising scarcity of oil will lead to an increase in its price (Hamilton, 2008). Manufacturing costs and distribution of manufactured consumer goods particularly food products are subject to the level of the price of oil (Frank & Bernanke, 2000). This drives up the cost of food production. Food production companies transfer this cost to the consumer. In this respect, the scarcity of products such as oil is felt in the daily life because you have to cope with the rising cost of food, which is a daily need.
Home and Business Energy Use
Many households use gas for their cooking and home heating. Propane gas is used primarily to heat homes. It is a by-product obtained through refinery of oil. Therefore, its price is likely to rise alongside the rise in the price of crude oil.
When gasoline prices increase, commuters, tourism industries, and freight companies all feel the impact (Hamilton, 2008). They start using public transit, taking few road trips in summer vacation, and downsizing vehicles in favor of economy cars. The imminent attainment of the peak in oil production will have a long-term effect on both personal and commercial transport. People will reduce the use of automobiles and seek alternative modes of transportation for their transport needs. People whose localities do not have affordable transport options spend a significant proportion of their disposable income due to the high travel costs incurred (Friedman, 2002).
The principal cause of climate change and global warming is the rising amount of carbon dioxide released through the burning of fossil fuels including natural gas and fuels (Hamilton, 2008). Therefore, global reduction in the production of carbon dioxide involves decreasing the magnitude of petroleum and natural gas usage. From a micro-economic perspective, an individual should make choices among alternatives influenced by the consideration of the shortages in oil supply and sharp increases in price (Blinder & Baumol, 2012). The declining supply of oil causes an individual to reduce usage of oil and gas. Solar energy is an option because it costs less and is under the control of the country that invests in it (Hamilton, 2008). In addition, it produces clean energy and offers a solution to the environmental problem of pollution. However, the problem in developing new sources of energy is that it takes time to develop and may be impossible to accomplish in the near future.
Tremendous costs have already been incurred by means of investment in infrastructure including mining, pipeline, distribution, and transportation. Therefore, coping with the consequences such as high prices of food and transportation requires making individual choices. For instance, it is less costly to travel by train rather than by aircraft. In addition, it is necessary to restrict the frequency of using a personal car, in order to add to the lessening of global carbon emissions (Hamilton, 2008).
In terms of increasing costs of transportation, people may relocate to places that have easy access to efficient public transport services or may move to places which are close to workplaces. Therefore, people may incur high costs of housing because real estate prices may increase to reflect the changes in preference for housing. An alternative may be to use electricity-powered automobiles or those that use energy from biofuels, natural gas, or liquids from goal, but they may have expensive initial cost of purchase. In relation to the problem of food production, it may be fundamental for government authorities through encourage local processing of food products through investment in processing equipment.
The fundamental problem of economics is that resources are scarce while human wants are not (Blinder & Baumol, 2012). Oil is a vital natural resource whose scarcity has a significant impact (Hamilton, 2008). Scarcity has an effect on everyone. First, people have to make choices between alternatives because they cannot access or afford everything they want. Human wants are unlimited, but natural resources are limited. This means that some wants may go unsatisfied. Second, scarcity necessitates a rationing device. This is a mechanism that decides who gets the available quantity of goods. Price is a rationing device. The person that pays the required price gets the resource. Third, due to scarcity, people compete to purchase resources.
Scarce resources affect the daily life of a person through their impact on the factors of production including capital, land, entrepreneurship, and labor. The consequent negative impact on the cost of life necessitates the need to make choices among potential alternatives. This affects transportation, food choices, and home energy use, among other activities that utilize energy from oil. Hydroelectric power and biofuels provide alternative sources of energy that is affordable and environmentally friendly. Therefore, the choice of an alternative to oil-energy must ensure little impact on the environment and affordability. Further research must investigate and quantify the impact of introducing solar energy and other green energy sources that supplement hydro-electric power, in terms of cost reduction and availability of energy.
Blinder, A.S. & Baumol, W.J. “Microeconomics: Principles and Policy (12th ed.)”, Mason, OH: Cengage, 2012
Frank, R & Bernanke, B, “Principles of Microeconomics”, New York, NY: McGraw Hill, 2000
Friedman, L.S. “Microeconomics of Public Policy Analysis”. Princeton, NJ: Princeton University Press, 2002, Retried from http://press.princeton.edu/chapters/s7309.html
Hamilton, JD, “Understanding Crude Oil Prices”, National Bureau of Energy Research, NBER Working Paper No. 14492, 2008. Retrieved from http://www.nber.org/papers/w14492
Motivation is a process that is indicated to initiate and maintain goal oriented behaviors. In a business organization, motivation of employees is important because it makes them much productive. Several strategies are used with an aim of motivating employees of an organization, and these motivational factors are normally rewards that are given to the employees in order to encourage their productivity. Money has been viewed as a reward for at least so many people, and this is more important than anything else that an organization can give to the employees. Perhaps, many organizations have several strategies of rewarding their employees. American express is one of the organizations that reward its customer service agents through incentives. These incentives are awarded based on the influence that American express’s employees have on their customers. This paper observes American Express motivational strategies towards the customer care employees.
Business organizations normally give incentives to their employees based on their performance. American Express has a pay for performance system that awards customer service agents who deliver satisfactory services. These rewards are based on the level at, which customers recommend American Express services to their friends. Therefore, a significant part of employees’ bonuses are tied to the customers’ willingness to recommend the company to their friends. This idea is motivational to the customer care employees because they are able to earn according to the quality of work that they deliver. It, therefore, means that the customer care employees need to work hard for clients to get satisfactory services.
The advantage that is associated with this form of incentive is that an employee will be able to be rewarded any time that he/she delivers quality service to the client. The employee, therefore, will benefit from the extra earning that are generated from delivering satisfactory services, an idea that will make such an individual work harder for excellent recommendations. However, on a condition that an employee is not able to meet customer’s expectation, it means that such employee will not get any reward. Lack of reward may be discouraging on the employee’s part and may lead to laxity in service provision eventually making the business organization perform poor.
Perhaps, American express provides several relationship care strategies.
The most motivational strategy that this organization provides to the customer care employees is the additional training and coaching from supervisors that are experts in this area. This is because this idea has made many customer care employees gain interpersonal skills, in addition to their technical skills. When customer care employees have adequate interpersonal employees, they are eventually able to deliver quality services since they know how to adequately handle their clients. This improve on their general performance, therefore, meaning increased rewards.
Several motivational theories apply to the case of American Express. The theories that are most applicable here, therefore, include expectancy theory, psychological empowerment, and goal setting theory. There are goals that have been set for the customer care agents (to influence clients to recommend American Express to their friends). The employees are also expected to meet certain target in order to get the reward. Additionally employees are psychologically empowered through interpersonal training and incentives. Equity theory is the least present in this case because employees are rewarded based on their performance. Therefore, this company need to ensure that there are other parameters used to give rewards in addition to the “ability to make clients recommend friends,” in order to motivate all customer care employees.
Inkling, (2013). Case: American Express. Retrieved From, https://www.inkling.com/read/organizational-behavior-colquitt-3rd/chapter-6/case-american-express On June 4, 2013.
Manufacturing is an essential process because, through it, raw materials can be converted into finished goods products. Finished goods are part of the essential assets of an organization because they generate cash through sales. Manufacturing as a technical process employs machinery and labor force. In a large manufacturing organization, man-machine setup with division of labor exists in order to effectively enhance large scale production. However, effective operations of the manufacturing process cannot occur without the director of operations/ Manufacturing.
The director of manufacturing an organization, therefore, plays a set of roles that enhance effective production of goods. This paper, therefore, observe the characteristics of a career as a director of manufacturing.
Director of manufacturing is one of the executives of a production business organization. A director of manufacturing, therefore, has enormous duties in an organization, which include coordination of the workers and use of machines in the production process, quality control of the production process, process improvement, and administration (Executives, (2013).
The director of manufacturing ensures that machines and workers working in the production department are in the acceptable conditions in order to enhance efficiency in production. The director of operations, therefore, supervise workers by being attentive of the production process, implements quality control programs so as to ensure that the finished products meet the acceptable standards, analyze the production process for efficiency to enhance improved output, and make an update of the costs of labor, raw materials, and equipment to the leaders of the organization, thereby performing an administrative function (eHow, 2013).
An effective director of manufacturing needs to possess both technical and functional skills. The abilities of concern in this career include effective communication, understanding, quick identification of situations, and problem solvability. A director of operations must be interest in enterprising and conventional occupations, and conversant with the certification requirements and programs. The appropriate educational requirements, therefore, must be a degree in the line relevant with the production together with graduate studies in administration. Training and experience are also important factors to consider.
Role of Operations Manager. Retrieved From, http://www.executivesontheweb.com/manufacturing-director-jobs On June 22, 2013.
eHow, (2013). Duties of Manufacturing Manager. Retrieved From, http://www.ehow.com/list_7544212_duties-manufacturing-manager.html On June 22, 2013.
Jobs, (2012). Career Guide for Industrial Manager. Retrieved From, http://jobs.virginia.gov/careerguides/IndustrialProMgr.htm On June 22, 2013.
Wal-Mart is a multinational retail store recognized for its many discount stores and warehouses across the world. Customers throng the stores due to the incredibly low prices that the company fixes on its commodities. Wal-Mart has remained profitable since it was established in 1962 (Wal-Mart Store, 2012). The store maintains a centralized system of management allowing managers to be in control of their branches. The continued success of the company has enabled the company to keep its competitors at bay, though its faces a tough challenge of keeping its prices low. The paper analyses Wal-Mart Stores in relation to the salient factors affecting the business as well as issues that can interfere with organizational performance.
Organizational environment refers to forces that surround an organization and its ability to function properly. Wal-Mart boasts of strong tangible resources. The store has remained financially stable regardless of the harsh economic time felt worldwide (Gereffi, & Christian, 2009). In 2012, Wal-Mart reported an increase in sales of 11%. Wal-Mart also has a strong leadership at the helm of the company with leadership structured on a regional basis. The decentralized system of leadership has seen managers have the authority to manage their own staff. Wal-Mart also has adequate human and innovative resources that have enables the company remain ahead of its rivals. From the technological perspective, Wal-Mart has remained technological savvy thus able to manage its own logistics using a central hub-and-spoke system (Wal-Mart Store, 2012).
Organizational relationships refer to the networks that an organization forms to ascertain the success of the organization. Wal-Mart strive to do business with companies that they can relate with, for instance Wal-Mart and protector and gamble have worked together in sharing data across their mutual supply chain. Such company relationships have enabled Wal-Mart to sell products that customers need. Wal-Mart is also preferred by customers due to the company’s ability to lower its prices (Basker, 2005). Wal-Mart has also engaged in efforts to provide its customers with a one-stop-shop where customers can access all that they need less than one roof.
The competitive environment is the market structure under which a company operates. Wal-Mart’s competitive environment is unique as it competes against physical companies such as Target, but also online companies such as Kindle. However, Wal-Mart has to-date emerged victorious having beaten most competitors hands down. Wal-Mart operates with the mantra “pile it high, sells it cheap” and is thus able to attract high numbers of customers throughout a financial year (Gereffi, & Christian, 2009). Wal-Mart remains unmatched on pricing due to its incredibly cheap prices that its competitors cannot match. Wal-Mart also offers a wide range of commodities hence attracting customers to its stores compared to their rivals.
Strategic challenges refer to the pressures that influence an organizations decisions and the drive towards future success. Wal-Mart main strategic challenge is keeping the prices of its commodities low despite the economic crunch and raises prices of raw materials. Companies and individuals are all affected by economic strains hence the tendency to shop less (customers) or to hike commodity prices (organization) (Tillquist, 2002).
Performance Improvement System
Performance improvement systems are the strategies that a company adopts so as to enhance their efficiency. In Wal-Mart, the store strives to establish efficient ways to improve performance. In 2011, for instance, the store achieved 69% improvement in fleet efficiency thus reducing transportation time. Wal-Mart has embraced fleet technology that focuses on improving the efficiency of heavy duty trucks that the store uses to transport its products.
Issue affecting employee performance
Optimal employee performance is paramount for any organization that desire to be successful and remain competitive. The management has to invent effective strategies that ensure employee are satisfied with the working environment provided. Employees must be motivated to work thus ensure productivity and efficiency in their job posts. Wal-Mart is faced with numerous issues that affect employee performance. One of these issues is low wages and long working hours. Wal-Mart has faced persistent complaints that it exposes its employees to long working hours, yet pays them very little.
A 2006 study by the Los Angeles alliance for the new economy revealed that Wal-Mart has one of the poorest payment structures. Wal-Mart pays its employees and average of &10 dollars per hour, yet the employees work for 34 hours per week (Gereffi, & Christian, 2009). Wal-Mart stores have also been accused of exposing its employee to off the clock working without the surety of overtime payment. The low pay by Wal-Mart towards its employees is so severe that most of its employees depend on government aid to survive. Some employees use food stamps to access free food rations from the government.
The issue of low pay affects employee performance significantly. Salaries and benefit packages are used as incentives, and motivation strategies to encourage employees to work hard in their respective assignments. Unfortunately, Wal-Mart employees work so as to survive (Tillquist, 2002). Job opportunities are available at Wal-Mart; however, the incentive to work for the store is nonexistent due to poor pay. The theory of motivation indicates that positive human behavior can be reinforced through rewards. The payment of salaries and benefits are some of the rewards that employers can accord to employees so as to encourage performance and efficiency at their work stations. Poor pay demoralizes employees who then focus on finding alternative employment opportunities.
Mission Statement: Wal-Mart Store
Wal-Mart has a direct mission statement that reads “we help people save money so they can live better”. The issues of low pay and poor working conditions do not represent the overall mission of Wal-Mart store. Most of the employees at Wal-Mart live in deplorable conditions due to meager salaries. The company earns a lot of proﬁt but performs poorly in terms of salaries and employee compensation packages. With the economic crunch still biting many citizens, the Wal-Mart employee suffers as his salary cannot afford him the basic commodities. The otherwise cheap, and customer friendly products offered by Wal-Mart stores are expensive for the Wal-Mart employee (Gereffi, & Christian, 2009).
From the employee perspective, Wal-Mart saves money, but its employees are living in poor states. The salaries paid by Wal-Mart are so meager that employees hardly have any left for purposes of savings. The low wage tendency by Wal-Mart has also been found to affect the American taxpayer. Employees cannot afford basic needs such as healthcare and thus sign up for publicly funded health programs that are supported by American taxes. With this in mind, Wal-Mart appears to be complicating the lives of its employees and customers rather than save. Employees cannot afford basic amenities for survival and the ordinary American has to foot these expenses through taxation (Basker, 2005).
Organizational Assessment Model
An organizational assessment model is used to determine the performance of an organization thus establish areas of weakness and strength. There are numerous types of organizational assessment model. The first is the causal model that analyzes the organizational and environmental dimensions within an organization. A company can use the causal model to determine how each function within its organization affect another hence ensures effective performance. The main advantage with the causal model is that it allows managers to make a critical review of the internal and external factors that affect performance in an organization (Fox, 2013).
Factors such as mission and strategy of the company, existing systems, motivation and organizational culture are considered. The main disadvantage with this model is that it is complex hence managers tend to avoid it. The second model that can be considered is the 7s framework model that analyzes the seven organizational variable that must be considered in any company. This model allows managers to look at the hardware and software of the organizations. The hardware represents the organization strategy and structure, whereas the software represents the organizational management style, existing systems, staff, existing skills and values within the organization. This model is excellent for resolving internal issues but fails in handling external issues of an organization. The third model is the organizational intelligence model that looks at the cause and effect of different issues affecting the organization (Basker, 2005). The model analyzes the external and internal inputs that affect performance and employee engagement within an organization. The organizational intelligence model is simple hence easy to follow. However, it fails to capture the intricate internal and external environment of an organization thus risk missing essential factors.
The causal model of organizational performance and change can best be used to analyze and resolve the issue of low pay and long working hours. This model illustrates how internal and external factors affect performance within an organization. As mentioned, low pay results to poor performance in which customers at Wal-Mart fail to attain set sales targets (Gereffi, & Christian, 2009). There is also high employee turnover as employees strive to seek other alternative opportunities that guarantee improved pays and better working conditions (Fox, 2013). The diagnosis process to resolve the problem affecting employees at Wal-Mart will entail analyzing the mission and strategy of the company and establishing whether the current issues is reflected in the missions
. Analysis will also focus on the work unit climate determining the reason why employees work for long hours. Analysis will also focus on task, and individual skills of employees. This will ensure that work is assigned according to skills that employees demonstrate. The work that an individual does will also reflect the amount of wage that he, or she receives.
Wal-Mart Stores is a multinational company that has proven to be a company to revere with regards to its outstanding performance and success in the face of the economic crisis. Wal-Mart continues to enjoy increased retail market growth as it ventures into other continents. The cheap cost of its commodities also gives Wal-Mart a competitive advantage as its competitors cannot lower their prices to Wal-Mart’s level. Wal-Mart has also been successful in retaining a strong customer base due to brand loyalty. Customers pleased with services offered at Wal-Mart have remained loyal to the store hence enabling the company realize profits. However, the store continues to face several problems. High employee turnover due to low pay and poor working conditions is one of the issues that are bound to affect performance. The store can use the causal model of organizational performance and change to determine how to handle and resolve the issue.
Basker E. (2005). Job creation or destruction? Labor market effects of Wal-Mart expansion. Rev. Econ. Stat. 87(1):174–83
Fox, E. (2013). Wal-Mart’s low wages cost tax payers. Retrieved from http://money.cnn.com/2013/06/04/news/companies/walmart-medicaid/index.html
Gereffi, G. & Christian, M. (2009). The impacts of Wal-Mart. Annual reviews of sociology. Vol. 35: 573-591
Tillquist, J. (2002). Strategic connectivity in extended enterprise networks. Journal of electronic commerce research. Vol. 3(2):77
Wal-Mart Store (2012). Our company. http://www.walmartstores.com/sites/responsibility-report/2012/ourCompany.aspx
Security in Wal-Mart
Date of Submission
|buyer Name:||hemanth varma bhupathiraju|
Ship-to address - Confirmed
21 CAPANO DRIVE APT C1
NEWARK, DE 19702
Table of Contents
Businesses achieve security through the everyday actions of employee’s right across the company. The business world is constantly changing forcing businesses to adapt new strategies to survive and thrive. One of these strategies is shifting from prioritizing prospecting of risks to creating sturdy safety and security measures to create customer loyalty. The purpose of this paper is to discuss solutions to the problems of our current security state. The study discusses the details about security in Wal-Mart. It covers the security policy of Wal-Mart and the measures set up by Wal-Mart to solve the problems of our current security state.
Businesses function to offer high-quality products and services to clients at a controlled cost of operations (Cravens et al., 2011). The security of a client is also part of the provision of high quality of goods and services. There are numerous issues impacting the current security state of the world ranging from terrorist attacks to cyber crimes (Cravens et al., 2011). Wal-Mart is no exception of these issues. Wal-Mart’s position in the global charts places it at a higher risk of attacks. Just like any other organization Wal-Mart thrives secure the assets and information of the stakeholders of an organization. The state of security is changing with new and more powerful threats that place the clients at risk that subsequently affects the performance of the company (Cravens et al., 2011). The company should have an explicit and constant effort to evaluate the current trends in security to update its security system (Cravens et al., 2011).
One of the principles driving forces for Wal-Mart’s security policy is the fact that Wal-Mart values the trust that stakeholders place in the company’s ability to secure their information. Personal information is information that identifies, or can relate to the client (Stankevičiūtė et al., 2012).
The company believes that privacy transcends the issue of compliance and endeavor to manage personal information following the ethical and moral standards. Wal-Mart’s policy not only considers securing the company and its information assets as picking and choosing technical security controls important but also the management and configuration of these devices (Stankevičiūtė et al., 2012).
- The details about the collection of client’s personal information
- The details about the use and protection of client’s personal information
- The details about sharing client’s personal information
- The choices clients can make about how Wal-Mart collects, uses, and shares their personal information.
The motive of these guidelines is to make sure the company’s associates, business partners, and service providers to manage your personal information properly.
The security policy at Wal-Mart is a security guideline that defines security domains flocking specific functional aspects ranging from governance and compliance to virtualization and identity management (Stankevičiūtė et al., 2012). The policy applies to customer information collected through different sources like;
- Information customers give the company during transactions, customer service operations, surveys, and online registrations,
- Information from other sources, such as companies that help Wal-Mart to update its records
- Information automatically collected when clients visit the company’s websites.
Statement of Guidelines
- Wal-Mart does not sell or rent your personal information.
- Wal-Mart uses clientele information to provide products and services and to support core business functions.
- The administration can combine all the information it collects. Therefore, it can disclose client information within its corporate family of companies.
- Wal-Mart can disclose client’s personal information to other third parties under the following limited circumstances:
- With service providers or suppliers that help with our business operations or joint products.
- With the client’s consent.
- To protect the safety, property, or other rights of Wal-Mart, customers, or associates
- When permitted by law
- If a client is a victim of identity theft, use the company page to request copies of application and business records in Wal-Mart's control
- Learn how to recognize various online scams that are not from Wal-Mart
Organization of Wal-Mart’s information security
The information Wal-Mart receives help it the company supplement its records, improve the personalization of our service to you, and detect fraud. Wal-Mart Security policy follows the following outline to organize information security (Stankevičiūtė et al., 2012).
Wal-Mart has an intricate security policy that seeks to protect the stakeholders of the company by protecting the privacy of the information they share with the company. The company’s security policy mainly focuses on protecting stakeholder information (Stankevičiūtė et al., 2012).
Information Wal-Mart Collects
This section describes the type of information Wal-Mart collects. The primary target of collecting information is to limit the information Wal-Mart collects to the information needed to support its operations. There are two types of information Wal-Mart collects (Stankevičiūtė et al., 2012).
- Information received from clients: Information clients share with Wal-Mart and information clients provide to Wal-Mart through technology.
- The information we receive from others: Information from family corporate and information from associated businesses.
How Wal-Mart Uses and Discloses Client’s Personal Information
Wal-Mart uses personal client information to provide them with better products and services. The company also uses client’s personal information support its business functions. Wal-Mart does not sell or rent client’s personal information. The company may share client’s personal information in limited circumstances and under strict supervision (Stankevičiūtė et al., 2012).
Wal-Mart offers clients choices about the various ways it collects, uses, and shares your personal information. Wal-Mart also offers clients the option of market preferences. The company communicates with the client in the manner they desire (Stankevičiūtė et al., 2012).
How to Contact Wal-Mart
This section of the security policy guides the clients on how to communicate with Wal-Mart in case of any event. There are two methods of communicating with Wal-Mart: customer service options and email privacy office (Stankevičiūtė et al., 2012).
This section emphasizes on the important sections of the security policy that clients should be aware of when engaging with the company. It also appreciates the importance of the security policy.
Information system acquisition
Wal-Mart is a global organization that requires an intricate and secure information system. One of the mistakes made by Wal-Mart when it started globalizing is sending information systems that were functional in the United States out to other countries (Stankevičiūtė et al., 2012). The company intended to run the world centrally from an IS perspective. The organization created a model of decentralized decisions, but centralized systems and controls to solve this problem (Stankevičiūtė et al., 2012). The organization created a centralized information system for its operations across the globe (in Arkansas) (Stankevičiūtė et al., 2012). The company also has common systems and common platforms. Nonetheless, the processes and the systems are the same regardless of the positioning of a store (Stankevičiūtė et al., 2012). This strategy allows a great deal of flexibility in Wal-Mart’s systems so that the people in those local markets can perform proficiently (Herold, 2010).
Development and maintenance
When Wal-Mart acquires a business, it starts the process of information acquisition by defining success with the customer. The next step is to eliminate any activity like keystrokes and reports before the organization automates (Herold, 2010). There are two major reasons why Wal-Mart eliminates activities. First, the organization will eventually build a better system (Herold, 2010). Secondly, invariably the information system of the business will offer better solutions that are fit for clients (Herold, 2010). The next step is to do a business process overview that reveals the physical layout from a business process point of view (Herold, 2010). Wal-Mart confirms with best business process experts in the company before beginning the design (Herold, 2010). Wal-Mart pilots the information system with its best and toughest stakeholders to test its proficiency (Herold, 2010).
Physical and environmental security
Wal-Mart considers the safety and security of its stakeholders and their assets a critical matter. It applies exemplary retail industry matters in situations involving safety and security to prove its commitment to the safety and security of stakeholders (Cravens et al., 2011). Wal-Mart acknowledges that there isn’t a single security package that can work for every location; therefore, it translates the best practices across the chain (Cravens et al., 2011). The administration also empowers facility managers and asset protection managers to identify, create and execute procedures appropriate for their facility (Cravens et al., 2011). The administration of each facilities security program is the primary function of the asset protection coordinator. The asset protection coordinator selects assesses and maintains the functions of security gadgets in the company (Cravens et al., 2011).
Wal-Mart deploys the best and up to date safety technology like closed circuit camera system and RFID tracking and location technology (Shih et al., 2005). Wal-Mart also has other measures set up to ensure the safety and security of its clients. The design and building of every faculty follow the crime prevention through environmental design standards (Stankevičiūtė et al., 2012). These standards provide guidelines for the lighting, landscaping, access control, security signage and surveillance (Stankevičiūtė et al., 2012). Wal-Mart also trains its employees on effective methods of monitoring and handling security situations (Walby et al 2014). Wal-Mart also performs an expansive background check on the employees to make sure they do not have a drug or criminal backgrounds. Wal-Mart adopts a fire alarm system as stipulated by the fire prevention code and NFPA 72 (Walby et al 2014). Moreover, each facility has an interior Facility-wide intercom system to provide direction to personnel in the event of a fire or a natural calamity (Walby et al 2014). The management of Wal-Mart stores both corporately or locally endeavors to work closely with local communities and authorities to identify the best safety and security plan for Wal-Mart (Walby et al 2014).
Access Control of Wal-Mart
Wal-Mart has adopted up to date access control technology and protocols that allow it monitor and control and restrict access to the organization’s assets and systems. Wal-Mart’s online service technology allows the company to receive information about the individual accessing the site (Walby et al 2014). The information received by the organization may include MAC address, IP address, and the unique device identifier (Walby et al 2014). The technology at Wal-Mart also allows the company to receive the real-time information of the individual trying to access the systems. Wal-Mart also requests for personal information of stakeholders for some transactions. Clients create accounts where they share their personal information with Wal-Mart. Wal-Mart uses IP Network access control protocols to protect client’s accounts by restricting and controlling access (Walby et al 2014). The accounts use a username and password authentication and authorization system to restrict access of unauthorized individual (Walby et al 2014).
Wal-Mart also uses Online Web-Based Access Control systems to protect the information system. It hosts online customer relationship management (CRM) systems and other applications online as a service to the clients (Walby et al 2014). These applications improve the efficiency of the security system of Wal-Mart (Walby et al 2014). Wal-Mart also uses Alerts and Notification Systems. These systems help improve the response times while reducing overall operation costs. They include an add-on to access control or as a stand-alone system among other measures. These measures provide security alerts and notifications in the event of a forced entry, open doors, or panic alarms sent to handheld devices, email, or monitoring stations (Shih et al., 2005). Wal-Mart has terms and conditions that regulate the use of its gadgets and service.
The terms and conditions for use of devices provided by the organization demand clients create a username and password they can remember. The terms and conditions also dictate that a client is fully responsible for the device they use to access the Services they perform using that device while it is accessing or using the service (Stankevičiūtė et al., 2012). If the customers encounter issues with the account, they consult with customer care (Stankevičiūtė et al., 2012).
Businesses are using security as a competitive strategy rather that prospecting business risks. Similarly, Wal-Mart uses the security and safety of its clients to create high customer retention rates. The security plan used by Wal-Mart covers the broad variety of security issues affecting businesses. Security risks are becoming more complex. Moreover most of the threats are asymmetric and networked, making them harder to manage. Wal-Mart uses an elaborate security policy to direct the manner in which it performs business operations and handles stakeholders. Wal-Mart understands that the challenge for corporate security is no different from that of any other function; therefore, it keeps pace with the company’s changing business environment. The measures make sure that the safety and security measures set up to protect the assets and information of stakeholders reflects the current security state.
Cravens, D., Le, H., & Piercy, N. (2011). The Oxford handbook of strategic sales and sales management. Oxford: Oxford University Press.
Herold, R. (2010). Managing an information security and privacy awareness and training program. CRC press.
Shih, D., Lin, C., & Lin, B. (2005). RFID tags: privacy and security aspects. International Journal of Mobile Communications, 3(3), 214-230.
Stankevičiūtė, E., Grunda, R., & Bartkus, E. V. (2012). Pursuing a Cost Leadership Strategy and Business Sustainability Objectives: Walmart Case Study. Economics and Management, 17(3), 1200-1206.
Walby, K., Lippert, R., & Palgrave Connect (Online service). (2014). Corporate security in the 21st century: Theory and practice in international perspective. Palgrave Macmillan.
It is possible to bring about satisfactory change in an organization through action research. It can be achieved through effective monitoring and evaluation to address problems of significance to the organization. Toward the end of the 1990s, Information Technology sector saw a beginning in growing popularity for application in scholarly investigations of information systems. (McLaughlin & Ayubayeva, 2015)The use of Action research in information system has evidently produced highly relevant research results given that it is grounded in practical action, aimed at solving an immediate problem situation and informing theory.
The particular task will be IS action research project in regards to a semantic database prototyping. The research setting will involve one organization. The immediate problem situation concerns the failure to complete a systems analysis. The organization has undergone two unhappy and failed attempts at analysis of their information requirements. A complicated analysis requirement and the database have puzzled two earlier attempts. (McLaughlin & Ayubayeva, 2015)These failures have further complicated requirements analysis since the users have grown hostile and suspicious of analysts and designers. The purpose of the action research will solve the IS design problems. The task will intentionally seek to achieve valuable goals for the organization.
Action researchers believe that complex social systems should not be reduced for meaningful study. Thus, human organizations can be understood as whole entities due to the context that interacts with information technologies. A key implication of the use of this assumption is that factoring of a social setting such as an organization and its IT into components cannot lead to useful knowledge about the whole organization. Then, how can a researcher develop an understanding of the interaction of organizations and their information systems? It can happen by the action researcher introducing changes into these processes and analyzing the effects of these changes. This change-oriented contention will profoundly shape the proposed action research approach. The action research project will involve various activities from the beginning.
The Action Research Cycle (Burns, 2014).
A period of data collection will in the organization give the researchers insights into the day-to-day functioning of the organization information system. The method of data collection will allow for the collection of a greater amount of data to test research hypotheses. A period of experimental implementation will then follow on the feedback of data. The choice of the information system will be made in consultation with departmental management and staff. However, Action research is typically cyclical. Action failures are as important as action successes. Action will continue until the immediate problem situation is relieved. Actions that relieve an immediate problem setting will be a powerful evidence of the practical effectiveness of an underlying theory.
Methodology: Action research
In the mid-1940s, Kurt Lewin, came up with a theory of action research describing action research as scheduled in several steps, comprising of planning, action, and the evaluation. According to Lewin, to effectively "comprehend and alter diverse social practices, researchers have to involve practitioners who experience the social practices in all the whole process of inquiry. The coining of the theory of action research made it a widely used method of acceptable inquiry. Accordingly, Action research is a disciplined process of inquiry conducted to improve the quality of an organization and its performance. The practitioner designs and conducts action research and analyzes the data to improve his or her practice. Action research can also be carried out by teams. Practitioners engage in action research in order to improve and refine their actions
The action research model (Hansen& Brady, 2011)
The figure clearly shows the fundamental difference between other types of research models and action research. First, the research is problem-focused. Secondly, defining the problems is a collaborative process involving researchers and practitioners. Thirdly, the application and evaluation point is built in through the experimental innovation stage. Action research is presented as a type of organizational problem-solving where the role of the consultant is played by the external researcher.
Practitioners, who engage in Action research as an inquiry or research in the context of focused efforts, find it to be an empowering experience. This method of research has different positive impacts for many reasons. Evidently, the most important reason it is that always relevant to participants. Relevance is guaranteed given that the focus of the research project is determined by the researcher who is also the primary consumer of the findings. Even more important is that the method assists the researcher to bring about change in a program or organization while increasing the understanding on the part of the participant. At the extreme, the findings may take the form of increased understanding on the part of those directly involved.
Action research is known as collaborative inquiry, participatory research, emancipatory research, contextual action research, and action learning. All these variations are based on a theme. Put simply, action research involves "learning by doing." A researcher identifies a problem, takes steps to resolve it, observes how successful his or her effort was, and if not satisfied, tries again. While the essence of the action research approach is to engage the researcher in the identification and formulation of problem and solution, there are various key attributes that differentiate it from other problem-solving activities. In general, action research aims to contribute to the practical concerns of people in an immediate problematic situation while furthering the goals of social science simultaneously. Thus, there exists a dual commitment to the methodology to study a system and at the same time collaborating with members of the system in changing it. Achieving the two goals requires the active teamwork of researcher and client, and hence it emphasizes the importance of co-learning as a primary aspect of the research process.
What separates action research from general problem-solving or professional practices is the emphasis on scientific study. It is to say that the researcher studies the problem scientifically and ascertains that the intervention is based on theoretical considerations. A considerable amount of the researcher's time is spent refining methodological tools to go with the demands of the situation. The researcher also collects, analyzes, and presents data on an ongoing, cyclical basis.
Why use action research
There are various reasons why action research methodology was selected for this project. The first one is based on its primary focus on turning the people involved into researchers. The nature of the methodology thus ensures people learn best, and more freely apply the lesson, when they do it themselves. Action research also has a social dimension - it is carried out in real-world situations and aims to solve real problems. Additionally, the methodology allows the researcher remain objective by openly acknowledging biases to other participants. The approach in action research collaborative, however, it is achieved through the critically examined action of individual members of the group. (Wood and Avison, 1985) Practitioners who employ action research certainly find it to be an empowering experience with a positive effect for various reasons. The most outstanding is that the practice is all the time relevant to the participants. The focus of action research is determined by members who also the primary consumers of the findings hence are guaranteed the relevance.
Additionally, it is possible to achieve validity in action research. Some Important strategies used in achieving validity are a cyclic process and creation of dialectic. The cyclic process helps the researcher to get early interpretations can be challenged and refined. The creation of dialectic happens between two different sources of information or perspectives on them.
Types of action research approaches
There are different types of recognized approaches in action research. Accordingly, action research may be divided largely into three types: emancipator, practical and technical. However, different researchers have grouped action research into different groups. The Technical approach involves the testing of certain intervention on the basis of an existing theoretical framework. The practitioner engages in the process of implementation after the researcher identifies a particular problem and recommends a specific intervention. The practical approach involves a mutual understanding normally reached between the practitioner and researcher. Action research is purposely undertaken to improve practice through personal application of the participant’s wisdom. The critical approach focuses on bridging the gap existing in the specific setting. (Aakhus & Teeni, 2014)
There are various forms of action research within this class of action research approaches. As concerns the information systems, these forms are inventoried and analyzed from different perspectives. One perspective recognizes ten distinct forms of action research in information systems, with four individual. The characteristics of IS action research include process model, structure, typical involvement and primary goals.
Domains of Action Research
The type of learning created by action research represents promotes the understanding of a complex organizational problem. The domain of action research is clearest where the human organization interacts with participants. The domain includes one where a contingent value can be attached to the findings. The research should address a particular social setting. However, the knowledge generated knowledge should enhance the Development of the general theory. The researcher must be valued by those being researched, and both parties should successfully negotiate their goals. (Warmington, 1980) Otherwise, tension might destroy the participative validity of the research. The proposed sets of goals must be satisfied in the study
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