Globally, there are so many firms that are faced with the challenge of increased costs. Walmart is among these companies undergoing such economic crisis. A high number of employees working in the organization have increased the budget spent on the salaries. Low-quality products are a challenge as the company is spending billions of dollars in marketing its brand. Poor pricing of its products is another obstacle the firm is facing (John 3). This has affected its customers who try to look for same goods elsewhere at a lower price. The quantity that will be sold is reduced thus lowering the company's total revenues. Poor waste management will also affect the firm's output and eventually its productivity level. Low technological advancement also negatively impacts the company's product quality as well as production time. Inefficiencies in the production phases will consume much time and money thus resulting in increased costs.
However, there are measures that the firm can undertake to curb these unnecessary costs. The laying off ghost workers in the firm will lower the wage bill. Subcontracting will also help in solving this menace. The company should embrace modern technology to produce goods that will meet the customers' desires and needs thus competing well in the market. It will also boost the sales revenue as well. The firm should also carry out benchmarking to compare if it is paying more than what similar companies pay. Waste management needs to be given considerable attention (John 9). Recycling of their waste materials helps in reducing the extra cost of purchasing new ones. Spending on research and development will enable the company know what the consumers require and the quantity that is demanded hence reducing the cost of producing more than what is demanded, thus lowering wastage.
Work Cited
John, M. "The High Price of Low Cost: The View From the Other Side of Walmart’s ‘Productivity Loop’." 2015, changewalmart.org/wp-content/uploads/2016/11/The-High-Price-of-Low-Cost.pdf. Accessed 23 Apr. 2018.
