January 10th, 2018
Customer service case study – Walmart’s Company Background
Wal-Mart is the largest global retailer as evidenced by its revenues and large store numbers spread in different continents. The Fortune magazine for instance ranked Wal-Mart to be the top company in terms of revenues generated in 2010, having toppled Exxon Mobil, the holder of the top position in 2009 (CNN, 2011). In terms of numbers, Wal-Mart stores and Sam’s clubs totaled to 8,416 units as at January 31, 2010 (Wal-Mart, 2011, cover page). Of these, 3,708 stores and 596 clubs are located in the U.S. and 4,112 stores in its international markets such as Mexico (1,469 stores), Canada (317), Chile (252), the United Kingdom (371), Japan (371) and China (279) (Wal-Mart, 2011, cover page). The entity was founded in 1962 with a single store in Rogers, Ark, while in 1972, the ingestion of capital following its listing in the New York Stock Exchange led to its expansion to 276 stores (Wal-Mart, n.d.). Such rapid growth has meant that Wal-Mart must continually improve its customer service to meet its customers’ expectations.
In achieving its growth, Wal-Mart has relied on various strengths. Among these has been its enormous size that arose out of its focus on competitive pricing. By serving a high customer base, Wal-Mart can exert pressure to its suppliers to sell their goods to the entity at lower prices, since it constitutes a main customer to such suppliers (Clifford, 2010; Cascio, 2006). Secondly, by offering a variety of products in its stores, the entity shields against losses that arise out of fading customer-preference for various goods. Lack of such focus, by removing some of the goods that seemed not to move fast from its shelves has been attributed to have been one of the reasons explaining its recent dismal performance in the U.S (“Wal-Mart’s profit rises,” 2011).
Despite its favorable financial rating, Wal-Mart challenges lie in its poor customer service. In one website that tracks consumer perspectives on various products (ConsumerAffairs.com, 2011), complaints of consumer mistreatment by Wal-Mart are widespread, with such complaints being reinforced by other articles on other internet (e.g. Seeking Alpha, 2008). Additionally, Wal-Mart has constantly rated poorly in the American customer satisfaction index compared to competitors such as Publix, whole foods, and Safeway (American customer Satisfaction Index, 2011; Catts, 2008), which may explain the observed declining same-store sales in the U.S for the seventh consecutive quarter (Clifford, 2011; Trefis Team 2011). One of the reasons that could be attributed to the poor customer service in Wal-Mart is its much criticized employment practices (Cascio, 2006; “Mixing politics and Wal-Mart”, 2008; Liptalk & Greenhouse, 2010), that have an effect of lowering employee morale to offer customers the required level of customer service at its stores (ConsumerAffairs.com, 2011). Accordingly, the purpose of this paper is to assess how employee training and motivation can help Wal-Mart improve its customer services.
To meet this purpose, the paper is organized into four main sections. The introduction, which is the first part, provides a brief overview about the customer service and its impact on organizational outcomes, brief company background and a thesis statement. The second part, the literature review serves as the methodology of this paper and highlights two broad aspects. Firstly, the review assess perspectives that link customer service to organizational outcomes in more detail, highlighting the challenges that face a company such as Wal-Mart in establishing effective customer service. Following the preliminary indications of lack of employee motivation and training in complaints about Wal-Mart’s customer service (e.g. ConsumerAffairs.com, 2011: Trefis Team, 2011), the second part of the review assesses the relevant training and employee motivation practices that the company can institute. The third part provides a summary of implications of the reviewed literature to Wal-Mart’s status. Ultimately, the conclusion presents the key points discussed throughout the paper. Go to part 3 here.