Strategic Initiatives Paper

Strategic Initiative

Finance for Business/370

Strategic Initiative

Short-term liquidity and long-term profitability are essential objectives for a successful business. The modest beginnings and impressive 50-year growth of Walmart Stores, Inc. are an example of such practice. Walmart Stores, Inc. reflects decades of continued positive return for investors in its annual report and presents a five-tiered strategic plan. The Walmart Store, Inc. 2012 Annual Report lists these initiatives as “1) Developing our people; 2) Driving the productivity loop; 3) Winning inGlobal eCommerce; 4) Reinvigorating our customer-focused culture; and 5) Leading on social and environmental issues (p. 3). This essay will focus on two initiatives—driving the productivity loop and reinvigorating our customer-focused culture. These two initiatives are tied to short-term and long-term financial concerns, and expansion strategies. The following details the organization’s financial planning surrounding the initiatives, the risks involved in the ideas, and the effect on revenues and expenses.

Driving the Productivity Loop

One can speculate that long-term objectives coupled with prudent short-term tactics are the reason for the success of the Walmart Stores, Inc. Strategic planning provides the framework for the vision of the Walmart management team. With strategic planning the team determines where to spend money for expansion, cut costs to reduces expenses, and invest profit for sustainably. Supporting this framework is the short-term and long-term financial plans a successful business needs to operate. According to Titman, Keown, and Martin (2011),

“The primary objective of both short- and long-range financial planning is the estimation of the firm’s future financing needs” (p. 564). In the case of Walmart, these financial goals and reviews are based on a positive record of providing lower prices, generating increased sales, expanding into new...