Global Functional Structure
WalMart has one of the most efficient and pervasive supply chains globally mainly due to the decision to have a global functional structure around the processes in this area. WalMart centralizes supply chain management, planning and optimization to ensure the highest levels of efficiency and cost reduction are attained, which is one of the major advantages of this organizational structure (Egelhoff, 2010). Additional advantages are the ease of synchronizing product and service strategies across multiple geographies, and the ability to analyze sales and product trends literally overnight, as WalMart does through its analytics and data mining applications. The disadvantages include the lag time to react to opportunities in key markets, the lack of visibility into niche markets that may grow in time to be very large, and a lack of localization that is often compensated for in years of investment in new countries.
Global Product Structure
Often Consumer Packaged Goods (CPG) manufacturers rely on a global product structure approach to gain economies of scale, encourage and promote the experience effect of learning about new products through the organization globally, and have greater synchronization of new product introductions. P&G has gone through many re-organizations over the last thirty years, and the most recent as been a global product structure that seeks to gain cost and time-to-market efficiencies globally through this approach to organizing their company (Ambos, Andersson, Birkinshaw, 2010).
The downsize of this is P&G has lost the speed of response when they had country subsidiaries, lost visib ility into new market growth at a more immediate level and have had to plan production around a single, global product platform, spending time and money to customize it for specific market needs.
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