Business Systems in an Organization, Term Paper Example

Businesses best exist and perform through the use of systems. Investing in systems rather than people is an excellent idea for largescale firms (Gerber, 2021). They utilize the systems acquired to harness different opportunities while hedging risks and threats towards achieving the desired outcomes. These systems can be implemented across different stages and levels of an organization depending on other variables such as the scale of operations. The performance of an entity from the use of the same is determined by how well an organization implements and follows the use of the same systems. This paper explores the various business systems that Klynveld Peat Marwick Goerdeler (KPMG) can institute, having checked the best from Walmart.

P1 Overall Business Context and Environment

A business exists as a connection of functions, systems, and processes that lead to achieving the targeted outcome when individually and collectively handled. Taking the case of Walmart, it is possible to understand the context or environment within which an organization exists through understanding what each of these concepts implies. A business function is an activity undertaken by an organization that yields income. Walmart engages in various income-generating parts divided into core and support functions. Among the core functions undertaken by Walmart include purchasing, productivity, distribution, and accounting. It also engages in support functions such as marketing. Business systems are interdependent elements through which an entity achieves its objectives. Walmart incorporates many systems, including sales, marketing, operations, and human resource management. A business process is a flow of steps undertaken by an organization aiming to achieve specific goals and objectives.

Business processes are interlinked and divided into stages, where each step identifies a particular achievement. Walmart accomplishes its goals through several techniques, including operational processes through sourcing products, marketing the products offered for sale, and customer management. It also has support processes serving to drive the core functions even though they do not generate any income. Walmart also divides its operations into management processes tailored towards the coordination of operations and systems.

P2 Evaluation of Various Types of Business Systems

Business systems act as a wheel towards achieving business goals and objectives. They require planning, strategizing, measuring, and controlling to complete and streamline tasks in an organization. Walmart has instituted several systems as commitment towards satisfying the customer needs. It has invested in information systems to assist in the movement of products in and out of the organization through radio frequency identification and check-out lanes. The company undertakes all its functions through an interconnection of systems working independently but geared to achieve the overall business goals.

The organization has applied Logiwa’s inventory management system that connects its warehouses to real-time inventory levels. It has also invested in its supply chain by using SKU and universal barcoding, allowing for the practical control of the flow of products from the supply end to the demand end (FORM, C.T.O).  Business systems are created to remove gaps and delays in sales, operations, marketing, and order fulfillment. Additionally, these systems create a fast and reliable linkage by complementing or supporting the human element in a function or process.

Taking the case of Walmart systems, it is clear that the systems link with one another by providing the much-needed support by adding speed, accuracy, and reliability. Business systems eliminate errors while keeping activities flowing towards productivity and performance. Having successfully implemented the best strategies, Walmart has had the upper hand in the market it thrives.

M1 Evaluation of the Business Environment and Business Systems

A business environment is the collection of surrounding factors that positively or negatively influence how an organization undertakes its activities in a given market. They can either be internal, cultivated and controlled from inside an organization or external, coming from the outside but affecting an entity’s performance. Like any other business, Walmart thrives in both external and internal environments. The Walmart internal environment comprises physical assets, human, technological capabilities, financial and marketing resources, and management structure. Irrespective of the systems instituted in an organization, these internal environmental factors have direct or indirect effects on the productivity and performance of an organization. Their strengths or effectiveness have shown that Walmart thrives at their best levels where the quality of technology influences their performance irrespective of business systems already in place.

An entity’s external environment comprises outside factors that directly or indirectly affect its performance. Walmart is influenced by factors such as regulations set in the market and customers. Walmart has no direct control of these factors but suffers or benefits from their presence. When implementing any business system, Walmart has to factor in the external environment such as the customers, suppliers, directives, and trading regulations.  The exterior and internal environments of a business are the enablers of a company, implying that any system has a factor in productivity.

P3 Internal and External Factors That Impact Business Systems and Processes

Every entity operates in internal and external environments. Across the two domains, an entity has either total, partial, or zero control hence the need to carefully examine each of the settings when designing the best processes and implementing systems. When failure is noticed, it could be due to the internal environment, finances or personnel, or the external surroundings such as the economic state.

Walmart has learned to harness its internal environment to ensure that the systems and processes they have in place bear the targeted results. They have been spending heavily on their employees and managers to ensure that they deliver their best through creating the link between the supply and demand ends towards customer satisfaction. Additionally, it has instituted a business culture based on teamwork and collaboration. Collaboration at Walmart has streamlined processes and systems hence bettering their performance.

When it comes to the external environment, Walmart has invested a lot in setting up measures that ensure continuity of operations under different states and situations. They have implemented flexible, informative, and supply chain networks. These supply chains have enabled them to harness the best from the external environment, suppliers, and customers. Walmart has also managed to thrive in the competitive market through tuning its operations to suit the government laws and policies set every day. It keeps abreast vigilance when implementing any procedures to avoid interactions in the course of operations. Notably, it has a way of working that looks and harnesses the good side of every external factor affecting its operations hence their continued optimal performance even under straining and unpleasant external environments such as the covid19 pandemic.

P4 Constraints and the Benefits of External and Internal Impacts

Internal and external impacts have both benefits and constraints imposed on any business. The internal environment is controllable by an organization which gives it the ability to tune it to bear benefits in performance and better competitive advantage. Internal customers are influential internal environment factors and determine the organization’s capacity to achieve set goals. Building on employees’ streamlined processes by giving the best customer care service. Walmart has implemented a customer service management system that offers its customers their desired level of satisfaction. Internally, they have a financial management system that oversees the allocation of resources to projects and functions that determine the market’s performance and competitiveness. Innovation is also enhanced at Walmart by adopting technological strategies that seek effectiveness and excellent performance in process and function management.

The external environment, in most cases, tends to undermine the effectiveness of an entity through passing challenges. One of the current scenarios is the covid19 pandemic that hit Walmart and many businesses globally. External factors create restraints on the functions and processes of an organization. Elements like harsh business regulations, including heavy taxation, undermine a business’s productivity as the same burden is transferred to the customer.  However, an entity can still thrive in its external environment by understanding it and implementing minimal or positive impacts on its functions and processes. They can be taken as opportunities for change by implementing new systems capable of withholding adverse situations like an economic crisis.

M2 Critically analysis of the impact of the internal and external environment on business systems

The effect of the internal and external environment can be better understood by using several concepts and theories, including the SWOT analysis and PESTEL approach. Walmart thrives under the influences of internal and external environments. Assessing its internal environment through the use of SWOT scrutiny ascertains several strengths, weaknesses, opportunities, and threats that determine the effectiveness of systems and processes (Ofori-Nyarko, Wang, and Annoh). The organization has several powers: an established retail brand, a robust global sales and distribution network, extensive range of products under several top-selling brands. Additionally, Walmart enjoys impressive economic growth supported by productive supply chains and excellent pricing and bargaining power.

Walmart also experiences poor human resource management, low-profit margins, and an imitable business model. Its internal environment is also influenced by opportunities such as profitable acquisitions and global acceptance of e-commerce. Additionally, the company faces several threats, including competition from giants in the industry such as Amazon and Alibaba, regulatory pressure and the escalating price of inputs such as labor. Such an expansive approach towards studying this company gives insight on its current and potential market performance. The SWOT analyses aligns different resources for an organization towards beating internal and external business environment.

Using the PESTEL analysis to explore Walmart exposes several external factors that impact their performance and consequently their competitive advantage. Walmart is affected by political factors such as political stability, globalization support, and pressures on waging systems. It also works under economic factors, economic stabilities, and continued development across several countries, and decreasing unemployment rates in the United States. Walmart’s performance is influenced by social factors that, in most cases, provide opportunities such as healthy lifestyle trends and urban migration.

Technological factors such as increasing automation and global mobile device acceptance have also presented opportunities for Walmart. The rise of environmentally friendly products is an ecological factor driving Walmart’s success. Moreover, it has been presented with opportunities and threats such as food safety regulations and tax law reforms under legal aspects. PESTEL explores factors limiting and favoring the existence of a business. Through this approach, Walmart uses PESTEL to evaluate outside factors both locally and inernationaly affecting its performance.

D1 Evaluation of the Business Environment and Business Systems

Walmart’s performance is contributed and undermined by the environment it serves. Different factors better productivity and understanding of the systems and process or reduce their profitability and competitive advantage. The retail giant has used several crucial elements in its environmental and business system efficiency and productivity.  The mutual value theory is embedded in its mission, where they increase business value by addressing critical societal needs. Walmart also conversely helps change society by addressing urgent societal needs (Artz, and Stone,  2012, pp.29).   The enterprise’s excellent practices and processes, for example, have increased consumer confidence, sparked new product lines, increased efficiency, cut prices, and ensured future supply, all while bettering livelihoods, advancing economic mobility and opportunity, decreasing pollution and waste, and restoring natural resources.

Walmart has also managed to achieve excellent business leadership through driving and tracking their performance against environmental priorities amongst their daily functions. Additionally, they have also managed to align philanthropy irrespective of the deteriorating external environment.

P5 Techniques to Test and Improve Efficiency of Business Systems

Learning from Walmart has come there are several business systems, as discussed above which can improve efficiency of a business system such the Porter’s five forces. These systems have recorded productivity and efficiency across the company which could translate to any company that follows suit. Using the Porter five forces competitive model, these achievements can be identified and explained (Gates, D., 2011). They include the ones discussed here in connection to Walmart.

The organization has been able to withstand the turbulent competition in the market. Under porter’s model, an organization is faced with competition from within and outside environments (Porter, 1989, pp. 133). However, an entity with a firm system can withstand the same as can be seen with Walmart. Its successful business systems have also coped with the potential of new entrants in the industry as this is an industry that is free and fair. Walmart is an ideal company to copy when dealing with the power of suppliers as it has a win-win supply relationship. This comes from implementing supply chain management systems that deliver satisfaction on each end. Walmart’s customer base has been rising impressively and is intended to continue growing, resulting in managing the power of customers through robust business systems. Being a flexible business entity, Walmart also displays an organization that effectively deals with the threat of substitute products. Substitute products especially in the electrical sector have seen giant companies experience huge losses. Walmart portrays an example of a flexible company through developing system that help overcome substitute including purchasing of other companies (Brea?Solís,  Casadesus?Masanell and Grifell?Tatjé,  2015, pp.17).

Assess the Effectiveness of Applying a Range Of Techniques to Test and Improve Business Systems Efficiency

Testing the efficiency of business systems and determining the best improvements can use any tool or technique. However, the results of applying a range of them deliver better satisfaction. While one method measures the effectiveness of a single item, the other is left out or poorly done, giving poor results. However, applying a range of techniques clears any chance of erring by ensuring that it has covered any parameter influencing or influenced by the system.

A range of methods and tools will ensure successful evaluation of the customer to determine the result needed. Consequently, the solutions implemented will ensure that their role stays productive. There will also factor and improve the actors in the organization not covered in customers. If an element is not covered in the previous section, it will be included and improved under world views, transformation process, owners, and the environment. As a business, the most crucial goal is to see the progression through achieving objectives at all handles enabled by applying a broad spectrum of techniques and tools.

P6 Recommendations for Improving Existing Business Systems

Changes could be undertaken in Walmart identified in any other organization with a similar approach. Nevertheless, such changes will be justifiable only if they attained specific metrics (Vigna, Bianco, Goia and Serra, 2018, p.111).  Using the SCRS approach, it is notable that there is a noteworthy need for change and improvements.

The current strategies in use in the organization is excellent and has withstood different conditions and times, including the covid19 pandemic. Such resilience and success are attributed to the application of yielding strategies. Walmart delivers excellence through the connection of sales, financial, human resources, and marketing, among other techniques. Judging from its current profit margins, there have been improvements and promising even better outcomes in the future. At maturity, a company is usually productive and delivers excellence across its functions and processes, as can be identified with Walmart.

A closer observation of its business systems, functions, and processes reveals requirements that need to be filled. It shows a need for adjustment of their human resource edge. Walmart has been dealing with this issue for a long especially with the tight economic environment over the last years. There is a need to develop systems that reshape this element for efficiency, productivity, and better competitive advantage. The current competitive advantage held by the organization is below some of the organizations that have dominated the industry. Irrespective of the systems in place, Walmart has not beat amazon, Alibaba, and other giants in the industry.

From the identified requirements, having evaluated the current state and strategies, an organization taking amazon can implement several solutions targeting to improve the efficiency of their business strategies. A primary explanation would be the application similar or even better to those applied by their competitors. Another one would be improving the measuring and controlling business systems in place. These solutions rejuvenate an organization by filling the requirements identified.

M4 Evidence-Based Evaluation of an Organization’s Existing Data Infrastructure

Walmart has managed a continuous improvement plan, implementing business systems bearing productivity. This can be ascertained by analyzing their structure, strategies, and other factors determining daily operations and optimal performance. They have embedded respect, service to customers, integrity, and excellence as core values across any of the elements in place. Their policies also indicate distinction as the most considerable percentage has produced positive results, including the increment in their customer base.

Walmart has made giant leaps from the events held from time to time, such as holiday promotions and campaigns. It has embarked on using these events to increase awareness, which increases reach and, therefore, market performance. Excellent content used by this organization in informing the customer illustrates high quality from Walmart. When advertising, campaigning or reporting the customer, the content must bear satisfaction by including elements that drive the message as desired. Having quality content parallel to Walmart’s product and service level has generated trust with its customers and other stakeholders, including suppliers. Better data flow is required to streamline the weaknesses noted in the organization.

However, the organization falls short of policies that could help them overcome challenges already being experienced. Although not often visited and revived, business policies require occasional changes to tune them to the current and future business environment. It will enable the organization to achieve a better competitive advantage. Efficiency in business systems requires better employee engagement through ensuring their welfare, among other things. Walmart needs to rethink their employee situation considering the extensive part they play in the organizational success. Employees interact with the systems in place, delivering an output equal to their satisfaction level.

D2 Evidence-Based Critical Analysis of a Business System Strategy

Walmart is a well-known e-commerce company with a brilliant model to contend with other behemoths. With the slogan of EDLP, its business strategy focuses on being competitive in terms of assortment, differentiating how people access information, leading in terms of price, and providing a fantastic experience (Every Day Low Prices) (Mazouni, 2018). This retail giant is identified with one-stop shopping and everyday low cost/price. The same-day delivery has tremendously changed its strategy. The organization is primarily run on a three-part business model. Walmart U.S. (which accounts for approximately 64 percent of its net sales), Walmart International (which accounts for roughly 24 percent of its net sales), and Sam’s Club (making about 12 percent of its net sales)

Walmart has remained competitive even while operating at low prices by using a few strategies. Some of the processes used to ensure the same include  Savings Catcher and Ad Match, Walmart pickup, rollbacks, moneyback guarantee, and online groceries. These strategies function through a variety of business strategies employed by the organization. Walmart matches a need with the right design or approach to handling it as observed following systems such as customer relationship management.

An elaborate and efficient business strategy enables an organization to achieve a more extensive reach. Techniques employed in an entity should aim at bringing more customers to purchase the products offered while extending the company’s influence in the market. The strategies applied, as seen in Walmart, help liquidate slow-moving stock. Planning and accounting are essential through a business system that identifies fast-moving and slow-moving items. Having interconnected their supply chain, an organization gets rid of the same increasing profitability without losing customers.

Additionally, strategies such as the ones applied by Walmart build a positive image for an organization in the market. The consumer is the first stop when measuring the reputation of an organization. Having been satisfied, they attach a positive image that spreads into the market over time.

Walmart could, however, make some changes that would better their performance in any strategy. They should consider implementing control systems to evaluate the flow of activities to avoid delays constantly. Delays come from one or several of the methods a product follows before reaching the consumer. MoSCoW priotization could also be enhanced as it betters planning thus beating shortcomings likely to be experienced in businesses systems (Voigt,  Glinz and Seybold, 2004). Besides, it could also develop solutions that quickly effect change in their systems and strategies. Like most businesses, Walmart was hard hit by the covid19 pandemic (Shafi, Liu, and Ren, 2020). Even though it developed strategies to cope with the situation, it took a lot of time. In the future, a quick but effective change in approach from a shift in the internal or external environment could be best handled by a strategy that has the exact equivalence.

References

Artz, G.M. and Stone, K.E., 2012. Revisiting WalMart’s impact on Iowa small-town retail: 25 years later. Economic Development Quarterly, 26(4), pp.298-310.

Brea?Solís, H., Casadesus?Masanell, R. and Grifell?Tatjé, E., 2015. Business Model Evaluation: Quantifying W almart’s Sources of Advantage. Strategic Entrepreneurship Journal, 9(1), pp.12-33.

Gates, D., 2011. Competitive Analysis: Exploring How Wal-Mart Maintains an Edge Over the Competition. Business Research Yearbook, p.632.

Gerber, M.E., 2021. The E-Myth Revisited Why Most Small Businesses Don’t Work and What to Do About It. HarperCollins Publishers Ltd.

Form, C.T.O., Wal-Mart Operation Management, and Supply Chain.

Mazouni, M., 2018. The Effect of Global Investment Decisions and Financial Risk on Multinational Corporations: Walmart Corporation Case Study. Available at SSRN 3257136.

Ofori-Nyarko, N.S., Wang, F. and Annoh, W.O., SWOT Analysis: Wal-Mart Stores INC.

Porter, M.E., 1989. How competitive forces shape strategy. In Readings in strategic management (pp. 133-143). Palgrave, London.

Shafi, M., Liu, J. and Ren, W., 2020. Impact of COVID-19 pandemic on micro, small, and medium-sized Enterprises operating in Pakistan. Research in Globalization, 2, p.100018.

Vigna, I., Bianco, L., Goia, F. and Serra, V., 2018. Phase change materials in transparent building envelopes: A Strengths, Weakness, Opportunities and Threats (SWOT) analysis. Energies, 11(1), p.111.

Voigt, B.J., Glinz, M. and Seybold, D.I.C., 2004. Dynamic system development method. no. January.