Wal-Mart Stores is consolidating some of its operations, while dividing the country into three regions with separate presidents. The overhaul is expected to help the retailer in catering to local tastes, finding real estate in saturated markets, developing and empowering local store talent, and expanding e-commerce.
Under the structure, logistics, real estate and store operations will all now be overseen by Bill Simon, its chief operating officer. Each region will have a real estate team dedicated to determining the best locations to build new stores or studying new store formats that might be suitable for the local market. Eduardo Castro-Wright, vice chairman, said this part of the restructuring is "intended to gain alignment in the critical new store decision process by integrating Wal-Mart's realty division with store operations and logistics."
On the merchandising front, SVP of store merchandise operations Andy Barron will oversee merchandise strategies for three new business zones: Walmart West, Walmart South and Walmart North. Each zone will have its own president, who will work with merchandising teams to stock items that match local tastes. Jon Fleming, chief merchant, in a statement said Mr. Barron's team "will design merchandise strategies for each of Walmart US's new geographic business units and translate those strategies into executable, customer-focused programs. In addition, the in-store presentation and store groups, currently in the customer experience organization, will move to [Mr. Barron's] store merchandising execution team, close to our business units. For merchandising, this means we'll be even more connected with operations - and with our customers."
The reorganization is also expected to "develop and grow our talent more quickly and provide opportunities throughout the organization," according to Mr. Simon. He added, "By reducing our market managers' span of control, they will be able to focus on developing their store managers and to implement new productivity initiatives. The net impact will be stronger store managers with significantly more growth opportunities in the future."
Wal-Mart also changed its regional general manager structure by adding smaller regions at the senior director level to augment VP regional general managers. Mr. Simon said, "This move creates a stepping stone for market managers to gain leadership experience as they grow. We have also changed the regional general managers' span of control, to allow them to develop their market managers with a laser sharp focus."
Finally, Wal-Mart created Global.com with a goal of developing and executing a global strategy for e-commerce; establishing cross-functional and cross-border relationships; and creating technology platforms and applications across Wal-Mart's markets.
The changes come nearly one year after Mike Duke became Wal-Mart's CEO.
Discussion Questions: What do you make of Wal-Mart's U.S. reorganization? Where do you expect it will achieve the greatest efficiencies? What challenges do they face in execution?
- Organizational change memo from Mike Duke - Wal-Mart Stores
- Organizational change memo regarding Wal-Mart US from Eduardo Castro-Wright - Wal-Mart Stores
- Organizational change memo from Bill Simon - Wal-Mart Stores
- Organizational change memo from John Fleming - Wal-Mart Stores
- Organizational change memo regarding e-commerce from Eduardo Castro-Wright - Wal-Mart Stores
- Wal-Mart Combining Some US Units in Streamlining Move - The Wall Street Journal