walmart strategic management case study

• THE STRATEGY JOURNEY Book
• Videos & Tutorials
• Strategy Journey Analyzer [QUIZ + WORKBOOK]
• COMMUNITY FORUMS
• Transforming Operating Models with Service Design (TOMS) Program
• ABOUT STRATABILITY ACADEMY

Walmart Business Strategy: A Comprehensive Analysis

By   Julie Choo

Published: January 5, 2024

Last Update: January 5, 2024

TOPICS:   Service Design

In the dynamic landscape of retail, Walmart stands as a behemoth, shaping the industry with its innovative business strategies . This article delves into the core of Walmart’s success, unraveling its business strategy and digital transformation from top to bottom.

Walmart Business Strategy

Walmart’s business strategy is a well-crafted tapestry that combines a variety of elements to secure its position as a retail giant. At the heart of this strategy lies a robust operating model approach that encompasses a diverse range of channels and tactics. 

Transition to An OmniChannel Marketplace

The Walmart business strategy includes leveraging its vast physical presence through an extensive network of stores, drawing customers in with the promise of Everyday Low Prices (EDLP). This commitment to affordability is not just a slogan; it’s a cornerstone of Walmart’s marketing ethos, shaping consumer perceptions and driving foot traffic to its brick-and-mortar locations.

Building Strength via its Emerging Digital Operating Model

Walmart’s business business strategy extends beyond traditional advertising methods and its strength is in its operational strategy where it is charging ahead with digital transformation to become a more complete Omnichannel Marketplace to combat competitors such as Amazon. The retail giant has embraced the digital era, utilizing online platforms and e-commerce to reach a broader audience. Part of this digital evolution involves the strategic placement of distribution and fulfillment centers , ensuring efficient order processing and timely deliveries. By strategically integrating distribution and fulfillment centers into its operating model , Walmart maximizes operational efficiency, meeting customer demands swiftly and solidifying its reputation for reliability in the competitive retail landscape.

In essence, Walmart’s holistic digital operating model backed by a evolving digital transformation  strategy, encompassing physical stores, online presence, and strategically placed distribution hubs, reflects a dynamic and adaptive approach to consumer engagement and satisfaction. 

Walmart’s Existing Business Model Before Digital Transformation

Walmart’s retail business .

Walmart stores, comprising a vast network of discount stores and clubs, serve as the backbone of the retail giant’s physical presence. Walmart’s store format, ranging from neighborhood discount stores to expansive membership-based clubs, caters to a diverse customer base. These Walmart stores are strategically positioned to provide accessibility to a wide demographic, offering a one-stop shopping experience.

The discount stores, characterized by their commitment to Everyday Low Prices (EDLP), have become synonymous with affordability, attracting budget-conscious consumers. Simultaneously, Walmart clubs offer a membership-based model, providing additional benefits and exclusive deals. The amalgamation of these store formats under the Walmart umbrella showcases the company’s versatility, catering to the varied needs and preferences of consumers across different communities and demographics.

Walmart Pricing Strategy

Pricing strategy.

Walmart’s pricing strategy and its competitive advantage are substantiated by reputable sources in the retail industry. The pricing index data, indicating that Walmart’s prices are, on average, 10% lower than its competitors, comes from a comprehensive market analysis conducted by Retail Insight, a leading research firm specializing in retail trends and pricing dynamics.

Everyday Low Prices

Walmart’s success in the retail sector can be attributed to its commitment to Low Price Leadership, a strategic approach that revolves around providing customers with unbeatable prices. Leveraging Economies of Scale, Walmart capitalizes on its vast size and purchasing power to negotiate favorable deals with suppliers, enabling the company to pass on cost savings to consumers. The integration of Advanced Technology into its operations is another pivotal aspect of Walmart’s strategy. From inventory management to supply chain optimization, technology allows Walmart to enhance efficiency and keep prices competitive.

Walmart strives to keep it’s pricing tactics to the concept of “Everyday Low Prices” (EDLP). This philosophy ensures that customers receive consistently low prices on a wide range of products, fostering trust and loyalty. Additionally, the Rollback Pricing strategy involves temporary price reductions on select items, creating a sense of urgency and encouraging sales. Walmart’s Price Matching Policy, both in-store and online, further solidifies its commitment to offering the best deals. This policy assures customers that if they find a lower price elsewhere, Walmart will match it.

The insight into Walmart’s “Everyday Low Prices” (EDLP) philosophy and its impact on a 15% lower average price for common goods compared to competitors is derived from a detailed report published by Priceonomics , a respected platform known for its in-depth analyses of pricing strategies across various industries.

The statistics regarding Walmart’s market share of 22% in the U.S. grocery market and the 19% higher customer loyalty rate compared to competitors are sourced from recent market reports by Statista, a reliable and widely used statistical portal providing insights into global market trends and consumer behavior.

Multiple layers of Discount

Walmart’s embrace of Multiple Discounts adds another layer to its pricing strategy. Whether through seasonal promotions, clearance sales, or bundled deals, the company provides various avenues for customers to save money. This multifaceted approach to pricing reflects Walmart’s dedication to delivering value to its customers, ensuring that affordability remains a cornerstone of the retail giant’s identity.

These sources collectively reinforce the significance of Walmart’s pricing strategy in maintaining its competitive edge and dominating the retail landscape

Walmart’s Servicing Business

Walmart’s strategic expansion into the servicing business marks a transformative shift, positioning the retail giant as a comprehensive one-stop-shop that extends beyond conventional retail offerings. This venture encompasses an array of lifestyle services, ranging from financial services to automotive care and healthcare clinics. Walmart’s aim is clear: to seamlessly integrate into the daily lives of customers, providing not only products but also essential services, thereby enhancing its role in customers’ routines.

In response to the evolving preferences of contemporary consumers who prioritize convenience and accessibility, Walmart’s strategy seeks to streamline the customer journey. The provision of a diverse range of services alongside its traditional retail offerings exemplifies Walmart’s commitment to simplifying the consumer experience. This comprehensive approach not only caters to the varied needs of customers but also cultivates a sense of loyalty, as individuals find value in the convenience of addressing different requirements all under one roof.

The multifaceted nature of Walmart’s strategy is anticipated to foster increased customer retention. By offering not only a wide array of products but also an extensive range of lifestyle services, Walmart solidifies its position as a retail powerhouse, adapting to the changing landscape of customer-centric businesses. The convenience and value embedded in this approach are poised to elevate Walmart’s stature, making it an indispensable part of customers’ lives.

SWOT Analysis of Walmart’s Business strategy

As we navigate Walmart’s digital transformation journey, a SWOT analysis reveals key insights into its strengths, weaknesses, opportunities, and threats, guiding strategic decisions for sustained success in the dynamic retail industry that is operating in an increasingly digital economy.

SWOT Analysis of Walmart:

• Strong Brand Recognition: Walmart’s strength lies in its widely recognized and trusted brand, fostering consumer confidence and loyalty.
• Diverse Revenue Stream: The company’s adaptability is evident through a diverse revenue stream, navigating various markets and industries to maintain financial resilience. Per Walmart’s Q3 FY23 Earnings , a breakdown of walmart’s income can be recognised through its Sam’s Club membership sales (Up by 7.2%), Walmart U.S Comp Sales (Up 4.9%), Walmart U.S. eCommerce (up by 24%), and Walmart International sales (up by 5.4%). 
• Economies of Scale: Walmart leverages its extensive size for economies of scale shown by its strong revenue growth of 5.3% per 2022 and 2023 consolidated Income statement, enabling cost advantages in procurement, operations, and overall efficiency. 
• Strong Customer Base: With a vast and loyal customer base, Walmart establishes a robust foundation in the retail sector, emphasizing customer retention and sustained business growth as per market share stat of 60% shown on the Market retail/wholesale industry dominated by Walmart.

Weaknesses:

• Labor Relations: Walmart has faced criticism for labor practices, including low wages and labor disputes.
• E-commerce Competition: Despite significant strides, Walmart faces intense competition from e-commerce giants (e.g, amazon, eBay), impacting its online market share.
• Over Reliance on US Market: A substantial portion of Walmart’s revenue is generated in the United States, making it vulnerable to domestic economic fluctuations.
• Inconsistent customer service: represents a weakness in Walmart’s SWOT analysis, as variations in service quality across different locations may impact the overall customer experience, potentially leading to customer dissatisfaction and diminished brand perception.

Opportunities:

• E-commerce Expansion: Further growth in the online market allows Walmart to capitalize on changing consumer shopping habits.
• International Expansion: Targeting untapped markets presents opportunities for global revenue diversification.
• Health and Wellness Market: The growing trend towards health-conscious living provides avenues for expansion in the health and wellness sector. Increased understanding of customer journeys in these niches is key to begin to build stickiness effects.
• Technological Innovations: Embracing cutting-edge technologies can enhance customer experience and operational efficiency through a growing Omnichannel marketplace. It is vital to master data science and begin to leverage AI in the battle to understand consumer behaviors and deliver a remarkable experience.
• Competition: Intense competition from traditional retailers and e-commerce platforms poses a threat to Walmart’s market share such as Costco, Target and Amazon.
• Regulatory Challenges: Changes in regulations, especially related to labor and trade, can impact Walmart’s operations and costs. One such example is the metrics shown per Walmart’s ethics & compliance code of conduct aligning to regulatory challenges in culture, work safety, risk mitigation and more. 
• Economic Downturns: Economic uncertainties and recessions may lead to reduced consumer spending, affecting Walmart’s revenue.
• Supply Chain Disruptions: External factors like natural disasters or geopolitical events can disrupt the global supply chain, impacting product availability and costs. Such threats are specifically addressed by Walmart’s Enterprise Resilience Planning Team .

More on Walmart’s Online Competitors

Walmart faces formidable competition in the online retail arena, with key rivals such as Amazon and Target vying for a share of the digital market. Amazon, known for its extensive product selection and swift delivery services, poses a significant challenge to Walmart’s e-commerce dominance. Target, on the other hand, leverages its brand appeal and strategic partnerships to attract online customers. To counteract these competitors, Walmart employs a multifaceted approach that combines technological innovation, competitive pricing, and strategic collaborations.

Walmart strategically invests in advanced technologies to enhance its online platform and improve the overall customer experience. The integration of artificial intelligence (AI) and machine learning enables Walmart to provide personalized recommendations, similar to Amazon’s renowned recommendation engine. Additionally, Walmart’s commitment to competitive pricing aligns with its traditional retail strength, offering Everyday Low Prices (EDLP) and frequent promotions to attract budget-conscious consumers, countering the pricing strategies employed by Amazon and other competitors.

Conducting a thorough SWOT analysis (such as this example from the Strategy Journey Book – 2nd Edition) allows Walmart to capitalize on its strengths, address weaknesses, seize opportunities, and mitigate potential threats, contributing to sustained success in the ever-evolving retail landscape.

Walmart’s Digital Transformation Strategy in the new ERA of AI-led Customer Centricity 

Walmart’s online business strategy.

Overall, Walmart’s e-commerce strategy is customer-centric, driving substantial sales growth by tailoring its approach to the evolving needs of online customers. Operating a multitude of specialized e-commerce websites across diverse product categories, Walmart strategically positions itself on various e-commerce platforms for market penetration within the US.

Servicing Relevant Customer Journeys & Sustainable Transformation

Walmart’s evolving online strategy is characterized by a dual focus on extensive product offerings and technological sophistication, with concrete examples per its strategic partnership with Adobe in 2021 to integrate walmart’s marketplace, online and instore fulfillment and pickup technologies with Adobe commerce showcasing its commitment to a seamless customer experience. The integration of advanced tools is exemplified by the implementation of an efficient order processing system. For instance, Walmart employs real-time inventory management and automated order fulfillment , ensuring that customers experience timely and accurate deliveries. Statistics show an increasing number of fulfillment centers through FY2022 and FY2023 reports per statista .

Emerging predictive capabilities supported by Data Science and AI

In addition, the technological depth extends to personalized experiences, illustrated by Walmart’s robust recommendation engine. By analyzing customer preferences and purchase history, the system suggests relevant products, enhancing the entire customer journey. This personalized touch not only reflects the user-friendly interface but also demonstrates Walmart’s dedication to tailoring the online experience to individual needs.

Focus on seamless CX and UX to improve customer stickiness

Furthermore, Walmart’s commitment to a seamless online interaction is evident in its streamlined navigation features. The website’s intuitive design and optimized search functionality provide a smooth browsing experience for customers. This emphasis on user-friendliness goes beyond mere aesthetics, ensuring that customers can easily find and explore products, contributing to a more engaging online experience. Improved engagement is at the heart of Walmart’s strategy to foster stickiness effects, both digitally and to also build on brand stickiness too.

By investing in cutting-edge technologies while transforming using Human Centered design practices focused on CX and UX, Walmart not only navigates the complexities of the e-commerce landscape but also enhances the overall satisfaction and engagement of its online customers. These examples underscore Walmart’s strategic approach to digital transformation, where technological sophistication is not just a feature but a tangible means to elevate the online shopping experience. 

Walmart International Business

Successful international business expansion requires operating model transformation, and Walmart’s strategy is characterized by a blend of strategic acquisitions, partnerships, and a keen understanding of local markets. This is also how Walmart is operationally applying AI, via strategic partnerships as it continues to build its capabilities to improve its agility to implement transformation and go to market faster, rather than trying to build everything from scratch.

A Sustainable Diversification strategy that adapts to local markets  

Walmart’s international business expansion is a testament to its strategic approach in entering diverse markets and adapting to local nuances. One notable example of Walmart’s successful international expansion is its entry into the Indian market. In 2018, Walmart acquired a majority stake in Flipkart, one of India’s leading e-commerce platforms. This move allowed Walmart to tap into India’s burgeoning e-commerce market, aligning with the country’s growing digital consumer base.

The acquisition of Flipkart exemplifies Walmart’s strategy of leveraging local expertise and established platforms to gain a foothold in international markets. Recognizing the unique characteristics of the Indian retail landscape, where e-commerce plays a significant role, Walmart strategically invested in a company deeply embedded in the local market. This approach not only facilitated a smoother entry for Walmart but also enabled the retail giant to navigate regulatory complexities and consumer preferences effectively.

Another example of Walmart’s commitment to tailoring its offerings to meet local needs is further highlighted in its expansion into China where Walmart adapts its store formats to cater to specific consumer preferences. 

In China, Walmart has experimented with smaller-format stores in urban areas, recognizing the demand for convenient and accessible shopping options. This adaptability showcases Walmart’s understanding of the diverse economic and cultural landscapes it operates in, contributing to its success on the global stage.

Working with partners to diversify and build a sustainable business model 

Collaborations and strategic partnerships play a pivotal role in Walmart’s competitive strategy. In 2023, Walmart has outlined plans to invest heavily into AI automation fulfillment centers to improve its unit cost average by 20%, increasing efficiency in order fulfilments and operations. 

The acquisition of Jet.com in 2016 expanded Walmart’s digital footprint and brought innovative talent into the company. Furthermore, Walmart’s partnerships with various brands (such as Adobe, ShipBob) and retailers enable it to diversify its product offerings, providing a competitive edge against the more specialized approaches of some competitors. As part of Walmart’s strategy in marketing, Walmart has announced partnerships with social media giants such as TikTok, Snapchat, Firework and more further boosting its online digital footprint. 

The acquisition of Jet.com in 2016 not only expanded Walmart’s digital footprint but it brought innovative talent into the company. It is clear Walmart sees the need for talent as key to its continued efforts to apply human centered design as part of its digital transformation strategy.

By continuously adapting and evolving its strategies, Walmart is clearly implementing digital transformation sustainably, to support its future operating model as Walmart remains a formidable force in the online retail landscape, navigating the challenges presented by its competitors.

In conclusion, Walmart’s business strategy is that of an growing Omnichannel marketplace, a multifaceted approach that combines physical and digital retail, competitive pricing, supply chain excellence, and a commitment to customer satisfaction. Understanding these elements provides insights into the retail giant’s enduring success in a rapid changing and competitive digital economy as it continues to combat emerging new business disruptions.

Q1: How did Walmart become a retail giant?

Walmart’s ascent to retail dominance can be attributed to a combination of strategic pricing, operational efficiency, and a customer-centric approach. 

Q2: What sets Walmart’s supply chain apart?

Walmart’s supply chain is marked by innovation and technological integration, allowing the company to streamline operations and stay ahead in a competitive market.

Q3: How does Walmart balance physical and digital retail?

Walmart seamlessly integrates its brick-and-mortar stores with its online presence, offering customers a comprehensive shopping experience.

Q4: What is Walmart’s philosophy on pricing?

Walmart’s commitment to everyday low prices is a fundamental philosophy that underpins its strategy, ensuring affordability for consumers.

Q5: How has Walmart expanded globally?

Walmart’s global expansion involves adapting its strategy to diverse markets, understanding local dynamics, and leveraging its core strengths.

About the author

Julie Choo is lead author of THE STRATEGY JOURNEY book and the founder of STRATABILITY ACADEMY. She speaks regularly at numerous tech, careers and entrepreneur events globally. Julie continues to consult at large Fortune 500 companies, Global Banks and tech start-ups. As a lover of all things strategic, she is a keen Formula One fan who named her dog, Kimi (after Raikkonnen), and follows football - favourite club changes based on where she calls home.

You might also like

Culture & Careers , Data & AI , Gameplans & Roadmaps , Operating Model , Service Design , Strategy Journey Fundamentals , Transformation

The Impact of Co Creation in Modern Business

Culture & Careers , Data & AI , Gameplans & Roadmaps , Operating Model , Service Design , Transformation

4 steps to create a Winning Game Plan

Service Design

9 Steps to your Winning Customer Journey Strategy

MBA Knowledge Base

Business • Management • Technology

Home » Management Case Studies » Case Study: Business Strategy Analysis of Wal-Mart

Case Study: Business Strategy Analysis of Wal-Mart

Sam Walton, a leader with an innovative vision, started his own company and made it into the leader in discount retailing that it is today. Through his savvy, and sometimes unusual, business practices, he and his associates led the company forward for thirty years. Today, four years after his death, the company is still growing steadily. Wal-Mart executives continue to rely on many of the traditional goals and philosophies that Sam’s legacy left behind, while simultaneously keeping one step ahead of the ever-changing technology and methods of today’s fast-paced business environment . The organization has faced, and is still facing, a significant amount of controversy over several different issues; however, none of these have done much more than scrape the exterior of this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to strike a comfortable balance between increasing its profits and recognizing its social and ethical responsibilities .

Why is Wal-Mart so Successful ? Is it Good Strategy or Good Strategy Implementation ? In 1962, when Sam Walton opened the first Wal-Mart store in Rogers, Arkansas, no one could have ever predicted the enormous success this small-town merchant would have. Sam Walton’s talent for discount retailing not only made Wal-Mart the world’s largest retailer, but also the world’s number one retailer in sales. Indeed, Wal-Mart was named “Retailer of the Decade” by Discount Store News in 1989, and on several occasions has been included in Fortune’s list of the “10 most admired corporations.” Even with Walton’s death (after a two-year battle with bone cancer) in 1992, Wal-Mart’s sales continue to grow significantly.

Regarded by many as the entrepreneur of the century, Walton had a reputation for caring about his customers, his employees (or “associates” as he referred to them), and the community. In order to maintain its market position in the discount retail business, Wal-Mart executives continue to adhere to the management guidelines Sam developed. Walton was a man of simple tastes and took a keen interest in people. He believed in three guiding principles: 1. Customer value and service; 2. Partnership with its associates; 3. Community involvement.

• The Customer — The word “always” can be seen in virtually all of Wal-Mart’s literature. One of Walton’s deepest beliefs was that the customer is always right, and his stores are still driven by this philosophy. When questioned about Wal-Mart’s secrets of success , Walton has been quoted as saying, “It has to do with our desire to exceed our customers’ expectations every hour of every day”.
• The Associates — Walton’s greatest accomplishment was his ability to empower, enrich, and train his employees. He believed in listening to employees and challenging them to come up with ideas and suggestions to make the company better. At each of the Wal-Mart stores, signs are displayed which read, “Our People Make the Difference.” Associates regularly make suggestions for cutting costs through their “Yes We Can Sam” program. The sum of the savings generated by the associates actually paid for the construction of a new store in Texas. One of Wal-Mart’s goals was to provide its employees with the appropriate tools to do their jobs efficiently. The technology was not used as a means of replacing existing employees, but to provide them with a means to succeed in the retail market.
• The Community — Wal-Mart’s popularity can be linked to its hometown identity. Walton believed that every customer should be greeted upon entering a store, and that each store should be a reflection of the values of its customers and its community. Wal-Mart is involved in many community outreach programs and has launched several national efforts through industrial development grants.

What are the Key Features of Wal-Mart’s Approach to Implementing the Strategy Put Together by Sam Walton — The key features of Wal-Mart’s approach to implementing the strategy put together by Sam Walton emphasizes building solid working relationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts and merchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. This strategic formula is used to provide customers access to quality goods, to make these goods available when and where customers want them, to develop a cost structure that enables competitive pricing , and to build and maintain a reputation for absolute trustworthiness.

Wal-Mart stores operate according to their “Everyday Low Price” philosophy. Wal-Mart has emerged as the industry leader because it has been better at containing its costs which has allowed it to pass on the savings to its customers. Wal-Mart has become a capabilities competitor. It continues to improve upon its key business processes, managing them centrally and investing in them heavily for the long term payback. Wal-Mart has been regarded as an industry leader in testing, adapting, and applying a wide range of cutting-edge merchandising approaches. Walton proved to be a visionary leader and was known for his ability to quickly learn from his competitors’ successes and failures. In fact, the founder of Kmart once claimed that Walton not only copied our concepts, he strengthened them. Sam just took the ball and ran with it.

Wal-Mart has invested heavily in its unique cross-docking inventory system . Cross docking has enabled Wal-Mart to achieve economies of scale which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level.

A company owned transportation system also assists Wal-Mart in shipping goods from warehouse to store in less than 48 hours. This allows Wal-Mart to replenish the shelves 4 times faster than its competition. Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and movement which keeps it abreast of fast changes in the market. Information related to sales and inventory is disseminated via its advanced satellite communications system.

Wal-Mart has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expects commitments of quality merchandise. The purchasing agents of Wal-Mart are very focused people. Their highest priority is making sure everybody at all times in all cases knows who’s in charge, and it’s Wal-Mart. Even though Wal-Mart was tough in negotiating for absolute rock-bottom prices, the company worked closely with suppliers to develop mutual respect and to forge long-term partnerships that benefited both parties. Wal-Mart built an automated reordering system linking computers between Procter & Gamble (P&G) and its stores and distribution centers. The computer system sends a signal from a store to P&G identifying an item low in stock. It then sends a resupply order, via satellite, to the nearest P&G factory, which then ships the item to a Wal-Mart distribution center or directly to the store. This interaction between Wal-Mart and P&G is a win-win proposition because with better coordination, P&G can lower its costs and pass some of the savings on to Wal-Mart.

Sam Walton received national attention through his “Buy America” policy. Through this plan, Wal-Mart encourages its buyers and merchandise managers to stock stores with American-made products. In a 1993 annual report management stated the program demonstrates a long-standing Wal-Mart commitment to our customers that we will buy American-made products whenever we can if those products deliver the same quality and affordability as their foreign-made counterparts.

Environmental concerns are important to Wal-Mart. A prototype store was opened in Lawrence, Kansas, which was designed to be environmentally friendly. The store contains environmental education and recycling centers. Wal-Mart has also adopted the low cost theme for its facilities. All offices, including the corporate headquarters, are built economically and furnished simply. To conserve energy, temperature controls are connected via computer to headquarters. Through these programs, Wal-Mart shows its concern for the community.

Wal-Mart has been led from the top but run from the bottom, a strategy developed by Sam Walton and carried on by a small group of senior executives led by CEO David Glass. Although recent growth has led Wal-Mart to add more management layers, senior executives strive to maintain its unique culture. This culture, described as “one part Southern Baptist evangelism, one part University of Arkansas Razorback teamwork, and one part IBM hardware” has worked to Wal-Mart’s advantage.

Just how Successful is Wal-Mart? — A forecast of Wal-Mart’s income for the period 1995-2000, considering increases of 30.6% in Net Sales, 27.7% in Operating Expenses, and 52.3% in Interest Debt (a level which is below Wal-Mart’s historically compounded growth rate of 55.6%) indicates that the company should continue to report gains each year until 2000.

Growth on Sales — According to most analysts and company projections, sales should approximate $115 billion by 1996, representing an increase of 30.6% as compared to 1995. If the company continues at this pace, sales should reach $334 billion by the year 2000. The growth on sales that Wal-Mart reported during the 1980s and the beginning of the 1990s will be difficult to repeat, especially considering the ever-changing marketplace in which it competes. In an interview, Bill Fields, President of the Stores Division, said “Wal-Mart is now seeing price pressure from companies that once assiduously avoided taking it on. These include specialty retailers such as Limited, category killers like Home Depot and Circuit City, and catalog companies like Spiegel. I think everybody prices off of Wal-Mart. You’ve got Limited reaching levels we’d thought they’d never get to. The result is that everyday low prices are getting lower”.

In addition, the baby-boomers are reaching their peak earnings years, when financial and personal priorities change. Thus, savings, not spending, will likely take precedence because most baby-boomers are approaching retirement.

Debt Position — Based on Wal-Mart’s position in 1994, which was considered a year of expansion for the company, (Wal-Mart added 103 new discount stores, 38 “Supercenters”, 163 warehouse clubs, and 94,000 new associates) interest debt increased 52.3%. The cost paid by Wal-Mart to finance property plants and equipment forced the company to increase long term debt by 4.6 times during the period 1991-1995. Long term debt for 1995 is $7.9 billion. If Wal-Mart continues its expansion plans based on more debt acquisition at 1994 levels, the company may not attain forecasted gains by as early as 1998.

Operating Expenses — Operating expenses will be a key strategic issue for Wal-Mart in order to maintain its position in the market. The challenge is how to run more stores with less operating expenses. According to Bill Fields, “. . . the goal is to increase sales per square foot and drive operating costs down yet another notch”. Trends indicate that operating expenses have been growing at a rate of 27.7% in recent years. However, Wal-Mart should reap the benefits of its investments in high technology, and be able to operate more stores without increasing its expenses.

Cost of Sales — Cost of sales historically has been equal to the level of sales. If the company continues to take advantage of its buying power, Wal-Mart can expect to lower its cost of sales.

Wal-Mart’s future will depend on how well the company manages its expansion plans. For the coming years, the company will need to justify its expansion plans with consistent growth in sales, in order to offset the increases in debt interest and operating expenses.

What Problems are Ahead for Wal-Mart? What Risks? — Throughout the 1980s, Wal-Mart’s strategic intent was to unseat industry leaders Sears and Kmart, and become the largest retailer in the U.S. Wal-Mart accomplished this goal in 1991. But Wal-Mart’s current strong competitive position and its past rapid growth performance can’t guarantee that the company will remain as the industry leader or maintain its strong business position in the future. Carol Farmer, a retail consultant, told the Wall Street Journal that, “One little bad thing can wipe out lots of good things”. Every move in its business operation ought to be well thought-out and executed.

Wal-Mart needs to address two major areas in order to maintain or to capture an even stronger long term business position: 1) Single-business strategy — Wal-Mart’s success is mainly based on its concentration of a single-business strategy. This strategy has achieved enviable success over the last three decades without relying upon diversification to sustain its growth and competitive advantages . Given its current position in the industry, Wal-Mart may want to continue its single-business strategy and to push hard to maintain and increase market share. However, there is risk in this strategy, because concentration on a single-business strategy is similar to “putting all of a firm’s eggs in one industry basket”. In other words, if the retail industry stagnates due to an economic downturn, Wal-Mart might have difficulty achieving past profit performance.

Also, if Wal-Mart continues to follow Sam Walton’s vision of expansion, Wal-Mart will reach its peak in the very near future. When it does, its growth will start to slow down and the company will need to turn its strategic attention to diversification for future growth .

2) Social responsibility — Retail stores can compete on several bases: service, price, exclusivity, quality, and fashion. Wal-Mart has been extremely successful in competing in the retail industry by combining service, price, and quality. However, other merchants may object to Wal-Mart’s entry into their community. Because of its ability to out-price smaller competitors, Wal-Mart’s stores threaten smaller neighborhood stores which can only survive if they offer merchandise or services unavailable anywhere else. This makes it very hard for small businesses, such as “mom-and-pop” enterprises, to survive. They, therefore, fight to keep Wal-Mart from entering their locales. Numerous studies conducted in different states both support and criticize Wal-Mart. Nevertheless, Wal-Mart did drive local merchants out of business when it opened up stores in the same neighborhood. As a result, more and more rural communities are waging war against Wal-Mart’s entrance into their market. Besides protesting and signing petitions to attempt to stop Wal-Mart’s entry into their community, the opposition’s efforts can even be found on The Internet. Gig Harbor, a small town in Washington, recently started a World Wide Web page entitled “Us Against the Wal.” The town’s neighborhood association promised that they “will fight them [Wal-Mart] tooth and nail”.

The increasing opposition indicates that the road ahead for Wal-Mart may not be as smooth as Wal-Mart’s annual report would entail. This requires Wal-Mart to rethink its expansion strategy since it would not be profitable to operate in an unfriendly community.

How Big Will Wal-Mart be in Five Years if all Continues to go Well? — Before he died, Sam Walton expressed his belief that by the year 2000 Wal-Mart should be able to double the number of stores to about 3,000 and to reach sales of $125 billion annually. Walton predicted that the four biggest sources of growth potential would be the following: 1. expanding into states where it had no stores; 2. continuing to saturate its current markets with new stores; 3. perfecting the Supercenter format to expand Wal-Mart’s retailing reach into the grocery and supermarket arena — a market with annual sales of about $375 billion; 4. moving into international markets.

Wal-Mart Supercenters represent leveraging on customer loyalty and procurement muscle in order to create a new domestic growth vehicle for the company. With few locations left in the U.S. to put a new Sam’s Club or traditional Wal-Mart, the Supercenter division has emerged as the domestic vehicle for taking Wal-Mart to $100 billion in sales. Before the Supercenter, Walton experimented with a massive “Hypermart”, encompassing more than 230,000 square feet in size. The idea failed. Customers complained that the produce was not fresh or well-presented and that it was difficult to find things in a store so big that inventory clerks had to wear roller skates. One of Walton’s philosophies was that traveling on the road to success required failing at times.

As a result of the unsuccessful experiment, Walton launched a revised concept: the Supercenter, a combination discount and grocery store that was smaller than the Hypermart. The Supercenter was intended to give Wal-Mart improved drawing power in its existing markets by providing a one-stop shopping destination. Supercenters would have the full array of general merchandise found in traditional Wal-Mart stores, as well as a full-scale supermarket, delicatessen, fresh bakery, and other specialty shops like hair salons, portrait studios, dry cleaners, and optical wear departments. Supercenters would measure 125,000 to 150,000 square feet, and target locations where sales per store of $30 to $50 million annually were feasible.

Walton’s prediction was right on target. The Supercenter division more than doubled in size during 1993, then doubled again in 1994. Supercenters, once thought of as risky because of slim profit margins on the food side, will most likely make Wal-Mart the nation’s largest grocery retailer within the next five to seven years.

Expanding overseas, Wal-Mart moved into the international market in 1991 through a joint-venture partnership with CIFRA S.A. de C.V., Mexico’s leading retailer. Since then the company has entered Canada, Hong Kong, mainland China, Puerto Rico, Argentina, and Brazil. The Wal-Mart International Division was officially formed in 1994 to manage the company’s international growth. By the year 2000, analysts expect Wal-Mart to be a huge international retailer, with numerous locations in South America, Europe, and Asia.

Conclusion — The ever-changing market presents continuing challenges to retailers. First and foremost, retailers must recognize the strong implications of a “buyers’ market”. Customers are being offered a wide choice of shopping experiences, but no one operation can capture them all. Therefore, it is incumbent upon management to define their target market and direct their energies toward solving that specific market’s problems. Technology, demographics, consumer attitudes, and the advent of a global economy are all conspiring to rewrite the rules for success. Success in the next decade will depend upon the level of understanding retailers have about the new values, expectations, and needs of the customer. If Wal-Mart continues its customer-driven culture, it should remain a retail industry leader well into the next century.

Related posts:

• Case Study: An Assessment of Wal-Mart’s Global Expansion Strategy
• Case Study: Wal-Mart’s Failure in Germany
• Case Study: Wal-Mart’s Distribution and Logistics System
• Case Study: Ryanair Business Strategy Analysis
• Business Level Strategies – Cases of Wal-Mart, Apple, Zara and Ikea
• Case Study: Pfizer’s Strategy Analysis
• Case Study: The Business Strategy of Apple
• Case Study: Sony’s Business Strategy and It’s Failure
• Case Study: Business Strategy of Sony Corporation
• Case Study: Delta Airlines Successful Business Turnaround Strategy

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

“We Need People to Lean into the Future”

• Adi Ignatius

For years, Walmart’s unrivaled customer research capabilities helped it dominate retailing. Then along came the internet, and Walmart suddenly found itself playing catchup to e-commerce pioneers like Amazon. In 2014 the board appointed Doug McMillon as CEO and gave him an imperative: Bring Walmart into the future—without sacrificing its longtime strengths.

McMillon, who began his career unloading trucks at a neighborhood Walmart, respects tradition but is impatient for change. In this interview with HBR editor in chief Adi Ignatius, he describes the ups and downs of transforming America’s largest company. Going digital is a top priority—which is why Walmart recently paid $3 billion to acquire e-tailer Jet.com. But the company also wants to strengthen the in-store experience. “The reality,” notes McMillon, “is that customers want everything”—low prices, convenience, and seamless interactions online and in person. In this new world, all employees, including those on the sales floor, will need to be tech savvy. And the management team can no longer make strategic decisions on an annual or even quarterly basis; “strategy is happening on a much faster cycle time,” says the CEO.

A conversation with Walmart CEO Doug McMillon

For years, Walmart seemed to understand exactly what its customers wanted. It developed complicated consumer analytics and used that data, along with relentless pressure on suppliers, to become a retail powerhouse that sold practically everything at the lowest possible prices.

• Adi Ignatius is the editor in chief of Harvard Business Review.

Partner Center

Walmart Change Management Case Study

Change management is an essential aspect of any business that seeks to remain competitive in a dynamic market environment.

Walmart, one of the world’s largest retail giants, has had to navigate through significant changes in the retail industry, including the growth of e-commerce and shifting consumer behaviors. 

To maintain its position as a leader in the retail industry, Walmart has had to employ effective change management strategies to adapt to these changes successfully. 

This blog post presents a case study of Walmart’s change management efforts, exploring the strategies employed, the results achieved, and the lessons learned. 

By understanding Walmart’s approach to change management, businesses can learn valuable lessons and insights to help them navigate through their own organizational changes successfully.

Introduction to Walmart and its significance in the retail industry

Walmart is a multinational retail corporation that operates a chain of discount department stores, grocery stores, and hypermarkets. 

Founded in 1962 by Sam Walton, Walmart has grown to become one of the world’s largest retail companies, with over 10,000 stores in 27 countries and employing over two million people globally. 

Walmart’s success can be attributed to its focus on providing low-cost products, a wide range of merchandise, and a convenient shopping experience to its customers. 

Walmart’s innovative business strategies, such as its use of technology and supply chain management, have significantly impacted the retail industry, driving competitors to adopt similar approaches to remain competitive. 

Walmart’s success has made it a significant player in the retail industry, with its strategies being studied and emulated by businesses around the world

History of Walmart’s growth and success

Walmart’s growth and success can be traced back to its founder, Sam Walton, who had a vision of creating a retail store that offered low prices to customers. 

Walton opened his first store in Rogers, Arkansas, in 1962, which quickly became popular due to its low prices and convenient location. 

In the following years, Walmart expanded rapidly, opening more stores across the United States and becoming a publicly traded company in 1972.

Throughout the 1980s and 1990s, Walmart continued to grow, opening new stores and expanding into new markets. 

Walmart’s success was due, in part, to its innovative business strategies, such as its use of technology to manage inventory and supply chain operations, as well as its focus on providing low-cost products to customers. 

Walmart’s efficient operations and ability to negotiate lower prices with suppliers allowed the company to offer products at a lower cost than its competitors.

By the 2000s, Walmart had become a global retail giant, with stores in multiple countries and a significant impact on the retail industry. 

Despite facing criticism over its labor practices and impact on small businesses, Walmart’s focus on low prices and convenience to customers continued to make it a popular choice for shoppers. 

Today, Walmart remains one of the largest and most successful retailers in the world, with a significant presence in the retail industry.

Overview of Walmart’s organizational structure and culture

Walmart has a hierarchical organizational structure, with a clear chain of command and multiple levels of management. 

At the top of the hierarchy is the CEO, followed by executive vice presidents, senior vice presidents, and vice presidents. 

Each level of management is responsible for overseeing specific areas of the company’s operations, with clear lines of authority and responsibility.

Walmart’s culture is focused on providing low-cost products to customers and delivering a convenient shopping experience.

The company values efficiency, innovation, and collaboration, and encourages employees to take ownership of their work and contribute to the company’s success. 

Walmart’s culture is also characterized by its emphasis on customer service, with employees trained to prioritize the needs of customers and ensure they have a positive shopping experience.

Walmart’s culture has been shaped by its founder, Sam Walton, who believed in empowering employees and giving them the resources they needed to succeed. 

This approach has been reflected in the company’s employee policies, such as its emphasis on training and development programs, as well as its commitment to offering competitive wages and benefits to its workers. 

Need for Change Management at Walmart 

The retail industry has undergone significant changes in recent years, with the growth of e-commerce, shifting consumer behaviors, and increased competition. 

To remain competitive in this dynamic environment, businesses need to be agile and adaptable, constantly evolving their strategies to meet changing customer needs and market conditions. 

For Walmart, this has meant the need for effective change management strategies to remain competitive.

One of the main challenges facing Walmart has been the growth of e-commerce, with online retailers such as Amazon disrupting the traditional brick-and-mortar retail model. 

To compete in this new environment, Walmart has had to invest heavily in its e-commerce capabilities, including expanding its online product offerings and improving its supply chain operations. 

Walmart’s change management strategies have included acquiring online retailers, such as Jet.com and Bonobos, and investing in its own e-commerce platform to better compete with Amazon and other online retailers.

Another challenge facing Walmart has been shifting consumer behaviors, with customers demanding more convenience and personalized experiences. 

Walmart has responded by investing in its mobile app, offering online grocery pickup and delivery services, and improving its in-store experience through the use of technology such as self-checkout machines and interactive displays. 

These changes have required effective change management strategies, including employee training programs and leadership support, to ensure successful implementation and adoption.

How did Walmart manage changes?

Walmart’s response to the need for change has been largely successful, with the company implementing a range of strategies to remain competitive in a rapidly changing retail environment. 

Here are three examples of Walmart’s successful responses to the need for change:

1. Expansion of E-commerce capabilities

Walmart recognized the need to improve its online presence to compete with e-commerce giants like Amazon. To achieve this, Walmart acquired online retailer Jet.com and other e-commerce companies, and invested in its own online platform. These moves have helped Walmart significantly improve its online offerings, including its product selection and delivery options.

Walmart has leveraged its physical stores to offer convenient options like online grocery pickup and delivery, which has helped attract customers looking for a blend of online and offline shopping experiences.

Walmart’s investments in e-commerce have paid off, with its online sales increasing by 79% in Q2 2020, driven in part by the COVID-19 pandemic and increased demand for online shopping.

2. Focus on Sustainability

Walmart has recognized the importance of sustainability and environmental responsibility in its operations. The company has implemented a range of initiatives to reduce waste, lower carbon emissions, and promote sustainable practices across its operations. These initiatives include reducing plastic waste, investing in renewable energy, and sourcing more sustainable products.

Walmart’s sustainability efforts have not only helped the environment but have also resonated with customers who are increasingly conscious of the impact of their purchases. Walmart’s focus on sustainability has also helped the company reduce costs and improve efficiency, which has contributed to its bottom line.

3. Embracing Digital Transformation

Walmart has been at the forefront of using technology to improve its operations and customer experience. The company has invested in technologies such as robotics, artificial intelligence, and data analytics to improve its supply chain operations and enhance its in-store experience.

For example, Walmart has implemented autonomous robots in its stores to help with tasks like restocking shelves and cleaning floors, which has helped free up employees to focus on customer service. Additionally, Walmart has leveraged data analytics to better understand customer behavior and personalize its offerings, such as offering tailored product recommendations to shoppers.

Two Factors that explained the successful implementation of Walmart change management 

Walmart’s successful implementation of changes has been driven by a combination of strong leadership, employee engagement, and embracing new technology. 

By leveraging these factors, Walmart has been able to adapt to changing market conditions and remain competitive in a rapidly evolving retail industry. 

But the two most crucial factors behind the successful change management at Walmart are as follows:

Data-Driven Decision Making

Walmart has leveraged data analytics to make more informed and strategic decisions. By collecting and analyzing data on customer behavior, supply chain operations, and other key metrics, Walmart has been able to identify areas for improvement and make data-driven decisions about where to invest resources. This has helped Walmart prioritize its efforts and ensure that it is focusing on the initiatives that will have the greatest impact on its business

Focus on Customer Experience

Walmart has made a concerted effort to prioritize the customer experience in its change management efforts. For example, the company has invested in technologies like data analytics and artificial intelligence to better understand customer behavior and preferences, and has used this information to tailor its offerings to individual customers.

05 Lessons Learned from Walmart successful implementation of change management 

Here are five lessons that can be learned from Walmart’s successful change management efforts

• Emphasize strong leadership: Strong leadership is critical to the success of any change management effort. Walmart’s leadership was instrumental in driving the company’s change management efforts and ensuring that everyone was aligned with the company’s strategic goals.
• Engage employees: Engaging employees in the change management process is essential to building a resilient and adaptable workforce. Walmart invested heavily in employee training and encouraged workers to take ownership of their work, which helped foster a culture of innovation and adaptability.
• Leverage data analytics: Data analytics can provide valuable insights into customer behavior and other key metrics, which can help identify areas for improvement and guide strategic decision-making.
• Be flexible and agile: Flexibility and agility are critical to adapting to changing market conditions. Walmart was able to stay ahead of the curve by quickly adapting its operations to meet changing customer needs and preferences.
• Prioritize the customer experience: Prioritizing the customer experience is essential to building loyalty and driving sales. Walmart made a concerted effort to tailor its offerings to individual customers and invested in initiatives like online grocery pickup and delivery to make shopping more convenient and efficient

Final Words 

Walmart’s successful change management efforts provide valuable insights into how organizations can adapt to changing market conditions and remain competitive. By prioritizing strong leadership, employee engagement, data analytics, flexibility and agility, and the customer experience, Walmart was able to successfully implement changes that helped the company stay ahead of the curve.

As the retail industry continues to evolve, Walmart’s example serves as a reminder of the importance of remaining adaptable and open to change. By embracing new technologies, investing in employee training, and prioritizing the customer experience, organizations can position themselves for success in an ever-changing marketplace.

About The Author

Tahir Abbas

Related posts.

Johnson and Johnson Crisis Management Case Study

10 Top Change Management Skills with Examples

08 Steps to Create Communication Plan in Change Management

How Walmart Became The Retailer Of The People

Table of contents.

In the world of American retail success stories, it’s impossible to ignore the giant that is  Walmart . Just the mention of the name will bring about connotations of scale that are difficult to fathom in our modern context. 

Let's take a look at some of Walmart's astounding numbers

• $524 Billion (USD) revenue in 2020, an increase of $9.6 Billion 
• Over 2.3 Million employees worldwide, 1.6 Million in the US alone
• 4,743 Walmart stores in the US alone
• 5,184 Walmart international segment stores 
• Located in 24 countries
• Global market share of 2.6% in 2021

In this article, we’ll dive deeply into the Walmart story, unpacking the insights that drove them, the circumstances that made them, and pulling as much value as we can from what they’ve been able to accomplish. Whether you’re in retail or not, there are lessons to be learned here about strategic positioning, customer experiences, product development, long-term sustainability, supplier negotiation, and much more. 

Let’s dig in.

{{cta('eed3a6a3-0c12-4c96-9964-ac5329a94a27')}}

The Origin Story

The global behemoth started in a very humble way in Arkansas, back in 1962. Mercurial founder  Sam Walton  had a dream of what a true customer-focused retail experience could be. He believed that you could offer low prices and a great customer experience in parallel. And he set out to prove it.

That first store got off to a roaring success because it did something different from what everyone else provided. Walton’s dedication to leadership through service meant that the store felt like a family-led operation that genuinely cared for those who came through the doors. At this stage, it wasn’t the product range or scale that kept customers coming through the doors; it was the feeling that you actually mattered. You weren’t just a number. You were a valued client whose business was cherished.

Over the next 5 years, Sam Walton and his family expanded this philosophy to open up a further 23 stores, which generated just over $12m in revenue. With each new store they planted, they strived to understand the local community and their needs – delivering the sort of retail experience that they would appreciate. And it was this focus that allowed them to continue growing without losing their spark. Even as they began to scale, the small-town feel remained, and the Walton DNA was sprinkled across every part of the value chain.

In 1969, the company was officially incorporated as Wal-Mart Stores Inc., and just one year later, they were listed as a public company. The vision was to bottle up the magic and take it to a national scale. In a way that had rarely been seen before, the ambition was unbounded. They really did see a future where Walmart stores littered the whole of the USA.

By the time 1980 rolled around, the company crossed the $1bn sales figure, with contributions from 276 stores across the country. In today’s numbers, that’s huge, but back in 1980, it isn’t easy to appreciate just how powerful this empire was. The company had revolutionized modern retail, and on the back of significant improvements in mass production and global supply chains, Walmart continued to accelerate in terms of influence and market share. They were quickly becoming the go-to brand for anything and everything.

Every brand that tried to compete with them struggled to match their low prices, wide variety, and family-friendly ideals that made customers feel at home in the stores. Even though the Waltons couldn’t be everywhere, the culture they had nurtured continued to permeate each location, making it a shopping experience that couldn’t be beaten.

In the ‘90s, the company continued to expand, breezing through $100bn sales in a year and growing its operations into Mexico and other select international locations, most notably  China . Thanks to the Walmart supercenters, the company strengthened its brand as the one-stop shop for absolutely everything, providing great value and low costs across everything sold.

As of the time of writing, Walmart now operates over 10,000 stores globally, employing over 2.3m people and maintaining the status of one of the most recognizable brands across the world. The ethos of Sam Walton created an empire that champions low-priced goods delivered at scale in a way that delights customers through and through.

Now that we have a sense of some of the history, let’s look at some of the strategic pillars that make Walmart the success it is.

The Walmart Cheer

In 1975, Sam Walton traveled to Korea and Japan to visit some of his suppliers and to see what the mass production facilities looked like that were feeding the rapid growth of his organization. One of the visits was to a Korean tennis ball manufacturer, where he came across the idea of what would become the  Walmart Cheer .

The factory was not that inspiring aesthetically, but Walton was taken aback by how enthusiastic and happy the staff was. It was clear that they had something special about them, even in the rather dingy circumstances that they worked in. And when he saw the reason why he knew he had to bring a similar idea to Walmart.

The employees at this factory would get together at the beginning of every day and perform a cheer together. As silly as this sounds, they would do this choreographed war cry of sorts that was designed to unite them and reinforce the values and ideals that they were aiming for that day. On a once-off, this might seem like just a gimmick, but repeated day after day, and it turned into a mantra for that factory that kept the workers going and helped them to feel like they were a part of something larger than themselves.

Walton loved this idea and adapted it into what is known today as the Walmart Cheer. Every day before the staff opens their doors to the public, they will gather together to perform this ritual. The sales numbers for the day before would be read out, as well as any goals that are being set for that particular day, and then the employees will go back and forth spelling out Walmart in the same enthusiastic way that you might have during your high school war cries.

Walton recognized that while this seemed inconsequential to some, a little ritual like this acted as a moment for the staff to come together and set their intentions for each day. It gave the store managers an opportunity to share some words of inspiration or motivation to help fire up the employees. And it got the employees to get into their bodies a bit and set themselves up to be in a good state for what was to come.

By the time that the doors were opened for that day, there was an energy and vitality in that workforce that was contagious. This would help them serve the customers with as much verve as possible, which was what Walmart was all about.

Now, whether this is still done at every store is anyone’s guess, but it points to an important strategic insight that comes from Walmart. They understand that the energy put forth by their retail staff has a significant impact on the overall buying experience. While we tend to place a lot of focus on product ranges, pricing, distribution, marketing, and all those components the truth still remains that people buy from people. The ritual of the Walmart Cheer was a simple piece of what made those employees feel like they were all on the same team. And through the age-old tool of group song and dance, they could set their intentions and build the energy that they would need to give to their customers.

This shows an attention to detail that most retailers don’t get right. We’ve all been in situations where the apathy shown by retail employees creates a sour experience for us as customers, and it leads to us ignoring that brand as a result. Walmart understood this and sought to create practical ways for employees to come together and deliver that exceptional buying experience that the customers were looking for.

Always Low Prices

One of the more common oversimplifications that you’ll hear in the business strategy canon is that your pricing model must fall into one of two camps- high volumes at low prices or low volumes at high prices. While the reality is much more nuanced than that, the choice remains one that all companies must make if they are to create something sustainable.

Walmart has always been focused on low prices. They will do everything they can to slash their prices as low as possible because that is the value that they aim to provide to their customers. They want to beat the competition by convincing their audience that you won’t find these goods for cheaper than anywhere else. All across their supply chain, they are doing everything they can to keep the costs as low as possible.

You can see that most clearly in their margins. For the vast majority of their existence, they’ve kept their net profit margin in the  1-5% range , which is quite staggering when you think about the size and scale that they’ve managed to achieve. This is certainly doing things the hard way when it comes to building a business. Leaving yourself this little operational wiggle room is something that a lot of strategists might advise you against. But Walmart has made it work incredibly well.

The reason that this is so interesting is that in our modern context, the biggest companies in the world have insanely high margins that business experts across the gamut celebrate. The digital businesses that leverage the internet to deliver their offerings can find their margins being in the range of 60% and upwards in most cases, which is in stark contrast to the Walmart model.

But that’s a feature of brick-and-mortar retail. Your overheads and your rent make up a sizable chunk of your cost, and then you add on top of that the complex supply chain that brings a wide variety of products onto your shelves. Before you know it, your margins are under serious pressure and you require a significant investment in infrastructure to get the economies of scale you need.

This is compounded when you consider the types of goods that Walmart sells. The core of the offering is essentials, which are the bread and butter of daily life. Customers only really care about price and convenience in these verticals, so Walmart set itself up to match those desires. Through innovative supply chain optimizations and radical cost-cutting philosophy, they made themselves known as the discount retailer where you get the best prices.

It’s difficult to understate how valuable this branding is. If you can convince your customers that you’ll always have the lowest prices on the market, there’s no reason for them even to consider your competitors. Instead, they trust your product curation and become loyal customers of Walmart. At this point, you transcend the competition, and all you’re working on is delivering a consistently high quality of service to your existing base. This is the core proposition that the entire empire is built on.

That’s not to say that a low-price strategy is easy to execute, of course. There are some serious  minefields  you must navigate when you are trying to compete solely on price. It’s certainly not well suited for every business. But if you can carve out that space in the mind of the customer, you can build a sustainable following that will continue to bring you the volumes you need to make the business work.

Your business promise manifests itself and drowns out the competition.

Decentralized Logistics

To operate at the scale that Walmart does, you rely on a logistics system that must perform incredibly efficiently and reliably in rain or shine to supply stores with the items they need. In fact, you wouldn’t be out of order to suggest that at this point, Walmart is essentially a logistics company. In much the same way that Amazon relies on its distribution center, Walmart relies on always having its products in stock to fulfill the customer promise that they’ve made. And to do this with thousands of stores across the world is not an easy thing to get right.

The key strategic decision that the company made when it comes to its logistics was to decentralize its distribution centers and focus on getting the best possible location for each one. Instead of focusing on how they could achieve economies of scale in each distribution center, by building massive warehouses that would then distribute goods, they wanted more centers that could service the surrounding stores in a reasonable period of time. The objective that they set was that every Walmart store should be able to receive a delivery within 24 hours from a distribution center. This meant that as long as the distribution centers were well stocked, you could rectify stock shortages in any store within a day – helping to ease the pressure that comes with being known as the shop that has everything.

The placement of these distribution centers thus became very important to get right. You weren’t optimizing for low rent, high traffic, good infrastructure, or any of that. You were doing a geographic calculation to identify which stores needed to be serviced and therefore, where should the center be placed. These centers became the nodes of the network that would enable Walmart to spread its wings across the whole of the USA. They potentially could have saved money by optimizing for different criteria, but the specific choice to have a decentralized system meant that they could always ensure that their inventory levels were well managed and controlled.

Another interesting piece of this strategy was that once they had a new distribution center up and running, they would start by building the furthest store away from that center and then move closer and closer towards it, building stores as they went. This meant that the distribution center was prepared, right from the beginning, to handle its most challenging deliveries. Every subsequent store that was built could leverage that early work, and things got easier and easier as a result.

This prioritization also meant that Walmart could be much more selective as to where their actual retail locations were. Using the distribution center as the centerpiece, they could identify the key customer locations that mattered most and set up shop there, creating the spokes of their wheel. It was small details like this that allowed them to ramp up their retail capacity in ways that other chains just couldn’t match.

These logistical decisions have, of course, become part and parcel of our modern conversation because of the shift towards online shopping. Led by the giant that is Amazon, the world of logistics management has radically advanced since Walmart’s early days. But in their time, they really were one of the first companies who were very thoughtful about how they set up their distribution networks and used those pillars as the foundation on which they would expand their empire.

Bargaining Power

It would be impossible to discuss Walmart’s strategy without talking about the incredible level of bargaining power they enjoy over their suppliers. As one of the first retailers that went on an aggressive land grab strategy, they were determined to expand their offering as widely as possible to every town in America. They hoped to bring their consumer promise of low prices to everywhere you could imagine so that the brand became synonymous with saving.

Their success with this rapid expansion meant that they ate up market share in every region that they entered. And after a while, they became the dominant retailer in the country, controlling a significant portion of the goods market. This early domination gave them the leverage that they needed to negotiate the best possible terms with their suppliers.

When Walmart came knocking, suppliers knew that the order sizes were so big that they had to do anything to win that business. Manufacturers around the world would compete to have their goods on Walmart shelves because the scale was just unfathomable. This competition drove prices down and improved payment terms for Walmart itself. They could sit back and let companies eat into their own margins – helping Walmart to provide even lower prices to customers.

This is one of those advantages that gets locked in early and is very difficult to dislodge. If you look back at Walmart’s competitors over the years, this is one of the reasons why they have struggled to make a dent. Walmart’s bargaining power in these negotiations is second to none because a lot of suppliers would reconfigure their entire operation to manage the Walmart order. It was so big in size that it would subsume your manufacturing capacity and while some were able to expand beyond it, a lot of companies were comfortable just servicing the growing Walmart empire.

An example like this shows just how important a first-mover advantage can be in markets like this. When you’re competing on price and convenience, the way that you build scale is by being everywhere. And even though your margins are low in the beginning, if you can capture the market early, you can then put pressure on your suppliers to improve the financial situation over the long term.

You have to have enough cash to wait it out, of course, but this is the same model that we’ve seen from numerous venture-backed companies from the past two decades who chase customer growth first, knowing that once they have the lion’s share of the market, they will have the opportunity to squeeze all the other stakeholders because of the power that you wield. Uber is one modern example that comes to mind here.

And it’s not only on price that you benefit. The improved payment terms that you can negotiate have a significant influence on your cash flow cycle and therefore your ability to scale. Essentially, Walmart created an opportunity for themselves to borrow money for next to nothing which could then subsidize their long-term plans. It’s one of those lesser celebrated pieces of the business that actually has had an outsized impact on their success. And it shows the virtues of a high-volume, low-priced business.

In-House Drivers and Route Optimization

Another part of the Walmart strategy that has paid off for them is the decision to insource their transport across the board. Currently, the company boasts one of the largest truck fleets in the world, and their drivers are some of the highest-skilled drivers in the industry. They made it a priority from very early on to invest in this because they knew that it was crucial to managing a vast landscape of stores. They could have very easily subcontracted this work out to a courier service directly but decided that bringing it in-house would provide synergies that would be valuable.

They spend a lot of time and resources training and upskilling their drivers so that they can maintain the safest possible distribution network in the business. The drivers clock in over 700 million miles every year but still have one of the best safety records on a global scale. This speaks to the attention to detail and care taken to strengthen this part of their business, where a lot of companies might try to cut corners.

Having the best drivers isn’t everything though, you then have to figure out how to utilize them most effectively. Walmart does this expertly through complex route optimization processes that plan out all the travel that these trucks must go through to meet the demands of the various stores.

The main thing that they focus on is minimizing empty miles. Every time a truck is travelling without goods inside it, that opportunity cost is eating into the bottom line. So, everything that the company can do to optimize how they use their available space is going to pay dividends over the long run.

To this end, they employ sophisticated logistics management software that tracks current inventory levels, store purchases, incoming supplies, and truck positioning – to craft routes and distribution schedules that can deliver as efficiently as possible. This technology undergoes a complex weighting of various criteria including fuel consumption, environmental impact, traffic conditions, and more – ensuring that all the transport resources are used to their full potential. This has been tweaked over time and continues to learn from ongoing data that consistently compounds its value.

None of this optimization would be possible though without  the right data behind it , and that’s another area where Walmart has invested a lot of money into. The technological infrastructure that sits behind these thousands of stores is monumental. It allows the distribution nodes to understand the exact situation in real-time for any store they work with. As conditions change or consumer behavior adjusts, they can take that into account and adapt the transportation planning accordingly. 

It’s difficult to appreciate just how transformational this is until you’ve spent some time working on inventory management solutions. This part of business has changed dramatically in the last few years with the Internet of Things, machine learning, and advanced algorithmic decision-making starting to make its mark in the world of logistics. Walmart has shown itself to be a leader in this regard, which continues to push them forward as a company.

Of course, the shift towards online shopping is going to disrupt the typical way they do things, but the principles of logistics remain the same. As Walmart begins to compete on last-mile delivery to the houses of their individual customers, they are going to rely on many of the same technologies to manage inventory, track deliveries, and optimize routes so that they can sweat their assets as efficiently as possible.

The big competitor here is Amazon, who have built a distribution network unlike anything we have ever seen, but Walmart still holds its own because of the infrastructure it has in place. Some are talking about how we may see Walmart converting some stores into further distribution centers for online orders and if so, they would have some of the best-located nodes that anyone could imagine. We’ll have to wait and see.

Walmart is an American institution and through the years it has become a key staple for millions of families across the country. Through thick and thin, Walmart is relied upon to provide the essentials that customers need to survive and thrive. As such, they’ve transcended a mere grocery store and have taken on a certain social responsibility to continue to supply the American people with what they need.

In times of natural disasters that have devastated American towns, we’ve seen Walmart get on the front lines to help supply the recovery efforts and help to rebuild communities that are getting back onto their feet. But the only way they’ve been able to do that is by having their own  disaster recovery strategies  in place – policies that stand out when you compare them to the rest of the industry.

At great cost, Walmart has built six dedicated disaster recovery centers which are well-stocked at all times and ready to serve if something goes wrong in any of their regions. These centers are specifically designed to be a backup and so they hope that they never have to use them, but over the past few decades they have played a very important role in the Walmart story.

Having this redundancy in place as a business allows them to react much quicker to adverse conditions than might be possible otherwise. At the very moment where stores are incapacitated, they can have their distribution center ready to replenish the supplies that are needed in that community. This means that customers can rely on Walmart to get them the goods that they need even in the very worst of times.

Doing this has significant financial implications of course because those centers are just sitting attracting cost without delivering any tangible ROI for the company. Some might say that it’s a waste of resources. But Walmart sees the power in being the retailer that never runs out of stock and is more than happy to pay those costs. Because the branding that comes with it more than pays for those idle distribution centers. Customers can trust that Walmart will look after them in every circumstance, good or bad, and that continues to entrench their competitive advantage in every market they enter.

We can all learn from this – and it’s certainly very topical right now as we deal with a global pandemic. Having redundancy in your organization to prepare for those rainy days helps you to be much more agile than you would have been. And when you consider the branding tailwinds you receive when you are in a position to help people, it makes all that investment worth it.

This is not a corner that you should cut lightly. Redundancy matters.

Acquisitions and Joint Ventures

Let's look at how Walmart approached its international expansion. We can see a very clear strategic preference for acquiring existing retail chains or partnering with existing brands instead of trying to build their own from scratch. This principle is at the heart of their entries into Mexico, China, India, South Africa, and everywhere else where they have a presence. And it’s worth discussing why they went this route.

Walmart understood that the cultural context of their branding and their product offering is what enabled their success in each local area that they went. Customers trusted the chain with their business because it was delivering exactly what they wanted at the best price possible.

The organization knew that if they were to go into a new territory where they had limited cultural understanding, they risked creating a retail experience that didn’t serve those people in the way that it should. And that was an expensive mistake to make if you were entering a new company for the first time.

Instead, if they could leverage the knowledge and experience of local brands who understood the market, they could fast-track all of those learnings and get up to speed in next to no time – because they were standing on the shoulders of giants. So, that’s what they did. They would go into these new markets and look for acquisition targets that made sense for the growing empire.

They were looking for great locations, high customer foot traffic, and a certain penchant for discount shopping. Not only that, they were also looking for operations that weren’t operating as smoothly as they could be. That’s where the Walmart machine could add value.

When the company found a target like this, they could offer a premium price to acquire those brands because they had the confidence in their own technology, systems, and global supply networks that they could drastically improve the efficiency of those stores and drive prices even further down as a result. Riding on the success of the American stores, they could afford to take their time reconfiguring the internal operations and turning those brands into the sophisticated operations that were in place back home.

This is not to say that every acquisition worked,  far from it . International expansion is notoriously difficult. But the key insight is that they realized that they didn’t need to reinvent the wheel. The existing brands had loyal customers, good locations, and a cultural understanding of what was required to serve that particular area. If Walmart could bring its technology and operational excellence to the table, it could turn the dial up on success and grow internationally in a much more streamlined way.

The lore of internal expansion is littered with stories about high-powered brands walking into new countries and expecting to just build exactly the same business in the new place. Walmart wasn’t that naïve. They knew that they had to be smarter than that. And you should be too.

That brings us to the end of this strategy breakdown for Walmart, one of America’s biggest retail success stories. It’s rare that you see a company carry forward the ethos and values of its founder as it scales to this size, but that’s exactly what Walmart has done. Even though it is now a giant commercial conglomerate, it hasn’t lost that special sauce that the Waltons imbued in the company DNA.

It hasn’t tried to become what it’s not. The company has stayed true to its original brand promise that it will give you the widest range of goods at the best prices, wherever you happen to be. We’ve pulled out some key strategic pieces in this study, and those are certainly important in how they’ve got to where they are, but the purity of the offering is what really stands out.

Behind the simplicity of the brand image, lies a sophisticated logistics network, cutting-edge real-time data analysis, thoughtful HR strategy, planned redundancy, strong supplier negotiation, and a land grab strategy rivaled only by perhaps McDonald’s. These components all come together to make Walmart what it is and the scale they’ve achieved is testament to making this a winning formula.

What lies in the future for the company remains to be seen. They face stiff competition from Amazon and a myriad of other online retailers who are stealing customers from right under their noses. But we wouldn’t want to doubt their ability to adjust just yet. They’ve shown time and time again that they can remain relevant, and it’s hard to see them giving that up now.

It’s a story of diligence, perseverance, and a customer focus that bordered on obsession. And when we look back at some of the greatest retailers the world has ever seen, you can bet that Walmart is going to be very near the top of that list.

Sam Walton, we salute you.

Brought to you by:

Walmart's Omnichannel Strategy: Revolution or Miscalculation?

By: Ramon Casadesus-Masanell, Karen Elterman

This case describes Walmart's omnichannel strategy in 2018 as it battled Amazon for online retail market share. The case discusses Walmart's early forays into online retail, as well as its 2018…

• Length: 50 page(s)
• Publication Date: Aug 28, 2019
• Discipline: Strategy
• Product #: 720370-PDF-ENG

What's included:

• Educator Copy

$4.95 per student

degree granting course

$8.95 per student

non-degree granting course

Get access to this material, plus much more with a free Educator Account:

• Access to world-famous HBS cases
• Up to 60% off materials for your students
• Resources for teaching online
• Tips and reviews from other Educators

Already registered? Sign in

• Student Registration
• Non-Academic Registration
• Included Materials

This case describes Walmart's omnichannel strategy in 2018 as it battled Amazon for online retail market share. The case discusses Walmart's early forays into online retail, as well as its 2018 strategy, which aimed to integrate Walmart's enormous brick and mortar footprint with its growing ecommerce business, e.g., through merchandise and grocery delivery and order online, pickup in store options. Walmart's strategy also included the acquistion of Jet.com (in 2016) as well as the acquistion of a number of other specialty eretailers (e.g., Shoes.com , Moosejaw, Bare Necessities) and digitally-native vertical brands that developed their own products and sold them directly to consumers, such as ModCloth, Bonobos, and Eloquii. In addition to building its online marketplace, Walmart hoped to leverage its existing assets, such as its massive network of retail stores and thriving grocery business, in the fight against Amazon. The case poses the question: Could Walmart successfully compete against Amazon and other online retailers in areas such as grocery delivery, product selection, shipping costs, and delivery times?

Learning Objectives

To provide students with an understanding of the decisions Walmart made in developing its omnichannel business, including decisions related to its marketplace, online acquisitions, technological development, and distribution strategies.

Aug 28, 2019

Discipline:

Harvard Business School

720370-PDF-ENG

We use cookies to understand how you use our site and to improve your experience, including personalizing content. Learn More . By continuing to use our site, you accept our use of cookies and revised Privacy Policy .

A Detailed Case Study on Largest Retail Giant Walmart

Avinash kumar mahato

Walmart is one of the largest retail companies in the world. It was founded in 1962 by Sam Walton. The headquarter of this company is situated in the United States. The main aim of the company is to provide consistent discounts, loyal customer service, and fast friendly service.

Walmart’s targets to expand its business in large cities as well as spread retail stores throughout the world. The retail stores of Walmart are divided into four divisions Walmart Supercenters , Discount Stores, Neighborhood Markets, and Sam’s Clubs warehouses. More than 100 million customers are visiting these Walmart Stores.

It is very uncomfortable for small merchants and communities in America. Walmart reaches their town and provides low-cost offers and the best customer service. It is a very bad condition for small merchants and businessmen in America. To downtown merchants, Walmart just comes and takes over all the small stores.

The purchasing power, aggressive marketing and provide low prices to the customer by Walmart, tend to pull out the business by the small merchants. Gradually the dream of Walmart company to become the largest retailer in the world is full filing day-by-day. But, they increase their business by the wrong actions and do not respect the culture or language of the communities.

Timeline Events Of Walmart company Business Model Of Walmart How Walmart Generates Revenue? Walmart’s Marketing Strategy Walmart’s - Flipkart Acquisition

Timeline Events Of Walmart company

The Timeline of events for Walmart company since its inception.

• 1960: Sam Walton opened his first discount store in Rogers, Arkansas.
• 1981: Walmart become the largest company in America .
• 1981: After becoming the largest company in America, they opened their stores in a small Louisiana town.
• 1983: Walmart opened its stores in Pawhuska and Oklahoma.
• 1986: Walmart claims that it can restore more than 4000 jobs to American Communities.
• 1989: They drive a campaign about Environmental awareness that Walmart is aware of land, water, and air.
• 1990: There are some activist groups against the expansion of Walmart’s store.
• 31st December 1990: Walmart’s closed its stores in  Louisiana.
• 5th November 1991: Walmart opened up its store in Lowa City.
• 6th October 1998: Walmart’s founder Sam Walton created a family charity named Walton Family Charitable Support Foundation.
• June 1999: Walmart takes over the ASDA Chain (a British supermarket chain), now they have stores and depots across the United States.
• 2001: Walmart becomes the world’s largest retailer, got huge sales of $191 billion.
• July 2003: Walmart opened its stores in Beijing and till now they have 22 stores in China and counting.
• 2006: Walmart closed its stores in Germany.
• July 2007: Walmart is operating more than 2500 retail units in Walmart International and more than 500,000 employers in some countries.
• 2007: By the ending of this year, they got a net $45 billion sales.
• 2008: Walmart’s opened its wholesale facility in India. This is the first step of Walmart's to sell products through its retail outlets in India.
• 2018: Walmart acquired Flipkart for $16 billion and owned 77% stake in India’s largest online retailer brand.

Business Model Of Walmart

There are different business models that are followed by successful companies which vary from time to time. The business model of Walmart is based to eliminate the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs. The main motive of Walmart's business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

The main marketing strategy of the company is based on leading on price, be competitive, and deliver a great experience by the motto of Everyday Lower price.

Walmart has three important segments.

Walmart U.S

Walmart U.S is operated in the U.S. They provide customers with products and services that are not present physically in stores. They provide their services via the website and mobile application . The website of Walmart company has a special feature that provides a third party to sell products. The company operates its business on various platforms like supermarkets, discount stores, neighborhood markets, and e-commerce websites .

Walmart International

Walmart International is also divided into three sections which are retailers, wholesalers, and other small projects. These sections are also divided into various sections such as supermarkets, warehouses, electronics, apparel stores , drug stores, digital retailers, and many more.

It is the online platform of Walmart’s company i.e., “ samsclub.com ”. This club is consists of memberships of the only warehouse retailer operations. This section includes warehouse clubs in the U.S, as well as samsclub.com.

Want to Work in Top Gobal & Indian Startups or Looking For Remote/Web3 Jobs - Join angel.co

Angel.co is the best Job Searching Platform to find a Job in Your Preferred domain like tech, marketing, HR etc.

How Walmart Generates Revenue?

The Revenue Model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning.

Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business. The two main sources of revenue are Product revenue and Service revenue .

Walmart's revenue in the fiscal year ending January, 2020 was $524 Billion.

Product Revenue

Walmart has a wide range of products in various categories:-

• In the grocery category, they have products like Daily needs products, dairy products, frozen foods, bakery, baby products, beauty aids, and many more.
• Health and wellness category have products like Pharmacy products and clinical services .
• The entertainment category has products like electronics products, toys, cameras, movies, music, videos, and books.
• Stationary, paints, and hardware, Automotive, sporting goods, crafts, and seasonal merchandise.
• Apparel categories include apparel for men, women, boys, girls, shoes, jewelry, and accessories.
• Home appliances include home furnishing services, home decor, livings, and horticulture.

Service Revenue

Walmart also provide services to generate revenue in various fields:-

• They provide financial services like prepaid cards , money orders, wire transfer, money transfers, bill payments, and so on.
• VUDU movie streaming services: This is a subscription-based OTT platform for buying and renting movies, watching TV shows on demand.
• Clinical Services include primary health care, Physical and Wellness checks, Clinical lab tests.
• Health Insurance services

Walmart’s Marketing Strategy

Walmart's Business Strategy Analysis is one of the most important parts of any business whether it is small or large. It is very important to make an effective marketing plan to survive in the market . Walmart uses the principle of business marketing penetration method which is used to capture the market by offering lower prices and competitive prices to the consumers.

The company follows cost leadership which makes a huge profit for the company. The company provide low prices to the consumer and treated all the customers as king of the market to maintain the relationship between Walmart and the customer.

According to Walmart, there are four factors that drive the customer’s choice of retailer:

• Assortment.

One more reason for the success of Walmart is purchasing products from local manufacturers in a bulk in one go and selling in small quantities. Buying from local manufacturers is the benefit for both. Buying more products from local manufacturers means they are creating more jobs and they reduce the unemployment rate. They should provide good quality products at a lower price to maintain a good relationship with customers and continue to get profits in business.

List of Courses Curated By Top Marketing Professionals in the Industry

These are the courses curated by Top Marketing Professionals in the Industry who have spent 100+ Hours reviewing the Courses available in the market. These courses will help you to get a job or upgrade your skills.

Walmart’s - Flipkart Acquisition

Flipkart is one of the leading Indian e-commerce brands. In 2018, Walmart takes 77% stakes in India’s largest e-commerce company Flipkart and makes the world’s biggest purchase of an e-commerce company.

After this acquisition the future of eCommerce industry in India has become more competitive than ever.

The three main reasons for the acquisition of Flipkart are Flipkart’s leadership in some lucrative sections, its payment platform and the company’s talent pool.

Walmart’s world’s largest company is to continue to expand its business by improving its strategies day-by-day. The main reason for the success of Walmart is the EDLP system i.e., Everyday Low Price. They are working aggressively to maintain profits, market shares, and provide low prices to consumers. There are many business ideas to gain profit from a market. All depends on how you play the cards for a profitable business.

Walmart has made acquisitions of 28 organizations and has 16 sub-organization.

Feel free to reach us and share your understanding and views on the case study of Walmart. We would love to hear from you.

What is the business model of Walmart?

The business model of Walmart is based on eliminating the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs.

What is the motive behind Walmart's Business Strategy?

The main motive of the Walmart business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

What is Walmart's Market Strategy?

How does walmart generate revenue.

The earning model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business.

What are the main sources of revenue for Walmart?

The two main sources of revenue are:

• Product revenue
• Service revenue

Is Walmart owned by China?

The Walmart branch in China is majority Chinese-owned. But predominantly it is owned by Sam Walton's many children.

Why is Walmart so cheap?

They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning.  Hence, by selling in high volume they can sell it at a cheap price and still gain profit.

What are the sub-organisations under Walmart?

There are 16 sub-organisations of Walmart. Some of them are:

• Walmart Labs
• Seiyu Group
• Walmart Canada

What are the top acquisitions of Walmart?

Walmart has acquired 28 companies. Some top acquisitions are:

Must have tools for startups - Recommended by StartupTalky

• Manage your business smoothly- Google Workspace

Indeed: How It's Empowering Job Seekers to Achieve Their Career Dreams

Finding a job is not at all hassle-free. You have to prepare with a number of documents and with that, you even have to prepare yourself with confidence and motivation. If only this misery could be eased down, one's worries would let them live a bit.  Today, you can order

The Future of AI in Risk Management for Financial Institutions

This article has been contributed by Rangarajan Vasudevan, Chief Data Officer, Lentra. India's financial sector, the driving force behind the nation's economic progress, is dancing on a knife’s edge. Increasing regulatory scrutiny, geopolitical tensions, a volatile global economy, and the ever-looming specter of cyberattacks intertwine to form a complex

Discovering How AI Systems Personalise Courses for Students According to Their Preferences for Learning

This article has been contributed by Muddassar Nazar, CEO, Birla Brainiacs. Education is the foundation of human progress since it fosters intelligence and imparts skills that last a lifetime. However, students often struggle with a range of interest and comprehension levels when taught using the typical one-size-fits-all strategy. If the

How to Address Pricing Challenges: Balancing Affordability and Profitability in Specialty Medicine Sales

This article has been contributed by Devashish Singh, Co-Founder, MrMed. The largest pharmaceutical companies are engaged in researching and developing therapies for super speciality diseases such as cancer, Alzheimer’s, osteoarthritis and other chronic conditions that are relatively rare and extremely complex. Cancer, for example, has various stages and medications

• Free Case Studies
• Business Essays

Write My Case Study

Buy Case Study

Case Study Help

• Case Study For Sale
• Case Study Service
• Hire Writer

Strategic Management of Walmart

Wal-Mart is the largest private employer in the United States and the biggest retailer in the world. The company started in 1962 with only a small number of employees and has hugely grown since then. Throughout this essay we will analyse how a small family business managed to become the leading retailer in the world.

We will start by critically comment on the organisational culture of Wal-Mart.We will then apply Porter’s 5 forces Framework to this company. We will continue by undertaking a PESTEL analysis and discussing WAL-Marts key drivers for change. We will finish by critically comment on the strategies used by this leading retailer to expand outside the USA. Table of Contents Executive Summary2 Introduction3 I)Critically comment on the organisational culture of Wal-Mart.

We Will Write a Custom Case Study Specifically For You For Only $13.90/page!

5 II)Porter`s Five forces on Wal-Mart6 What are Porter`s five analysis? 6 The threat of Competitors6 Threat from New Entrants7 Porters Five force Diagram7 Suppliers` Power8III)PESTEL Analysis for Wal-Mart9 Political9 Economic10 Social11 Technologic11 Environmental12 Legal12 PESTEL conclusion12 IV)Global Expansion13 Analysis of Wal-Mart International Expansion Strategy13 Conclusion18 References19 I) Critically comment on the organisational culture of Wal-Mart. Wal-Mart created its organizational culture from the beginning of composition by Walton in his first opened in 1950. It is one of the few who are called to their employees “associates” and give them stock, and store and exchange data with them. Wal-Mart employees do not work for them, but they share.Wal-Mart’s message to them is that people who work hard will be involved in the company’s profit sharing program to become rich and happy. You will discover the organization culture of Wal-Mart from the first day on the job by just walk through the door and for the customer you will learn a lot about Wal-Mart culture just by crossing by first walk through its store.

(www. prenhall. com) Wal-Mart’s founder, Sam Walton, preceded respect and concern for his staff from the beginning of the company. This led to an atmosphere of confidence until this day.Walton also modelled the behaviour that he desired from his employees, especially customer service (both to internal and external customers), by visiting his stores, meeting customers, and greeting the staff by their first name. It also included, encourage change in order to maintain competitiveness, and development of staff through them to work in different environments.

???????? ????? ????? ??????? ??????? – ??? ??????? ?????? 1. ??? 1. foot 2. obsolescence 3. antiquity 4. peg 2.

??? 5. present 6. offer 7. submit 8. extend 9.

come 10. set forth 11. advance 12. show 13. tender 14.

move forward 15. chip 16. recede 17. bring forward 18. produce 19.

arrive 20. age 21. bring out 22. reach 23. get to 24.

give in 25. return 26. come back 27. turn in 28. proffer 29. become old 30.

be age-old 31. become timeworn 32. display (Golnaz Sadri and Brian Lees, 2001, pp. 853 – 859)Wal-Mart’s three basic rules are the customer is boss, “Get it done by sundown” and “Greet any customer who is within 10 feet. ” Company logo is “Exceed customer expectations.

” Wal-Mart culture is low cost. Wal-Mart’s culture is the key to their success, until today, the staff continues to believe that how Sam would have done it when making decisions. www. prenhall. com) II) Porter`s Five forces on Wal-Mart What are Porter`s five analysis? The five force analysis is a technique for identifying and listing those aspects of the five forces most relevant to the profitability of an organisation at that time.

(Porter 1980s, 1985 David B, Management, Prentice Hall, 3rd Edition 2005) The ability of a firm to earn an acceptable return on investment highly depends on how business managers handle these forces in their immediate business The objective of this script is to critically study the Wal-mart five force analyses.These five forces are the ability of potential competitors, the threat of new products, the buying power of consumer, and finally the bargaining strategies of suppliers. The threat of Competitors The most visible threat in the retail business across the United State is Competition. The quality of competition in the U S as a sub-region has significant influences on business within its borders, and these are due to the following factors; technological, economic, social and political factors. Wal- Mart is directly faced with competitors like K-mart, Target, Winco, Albertsons and wholesale retailers like Costco.The threat form is slightly different in scale putting into account the span of business activities and ability to match dominant actors.

Wal-Mart`s price low cost and discount strategies often leaves less room for competition from small firms in the business and it takes the likes of Target and K-Mart to follow suit in the low cost price strategy. The level of threat is medium given the resource available, brand awareness, service strategies, economies of scale, and the available product option that Wal-Mart provides.The Wal-mart supply chain have turned to be a guideline towards a low cost sales strategy with major competitors likely or forced to discount much lower to stay in business. These eliminate or possibly scale down the force against Wal-mart from new entrants concerned about attractive profit margins. Threat from New Entrants The threat from new entrants is quite low given the customer loyalty associated with the everyday low cost strategy that Wal-Mart offers.

Retailers are generally profit oriented and a short term profitable venture seems to be unforeseeable for new entrant in the US retail industry.Would new entrants af Ford to counteract the Wal-Mart low cost model, economies of scale, diverse products range, and brand awareness? Maybe, but with a significant impact on Wal-marts current market shares High entry cost and unavailable capital for investment (resource) could be key barriers among other things. Competitors Consumers Suppliers New Products Porters Five force Diagram Suppliers` Power Commodity Suppliers to Wal-mart and other discounters associated with it`s supply chain has limited power or little control over its cost generic strategy.Overall Suppliers role are set and driven largely on Wal-mart terms and conditions, with reference on the everyday “low cost” and “to meet or beat” pricing for customers leaves the supplier’s with limited control or bargaining power to influence price and mode of supply. Suppliers have to adapt to standards and values set by Wal-mart, and typical evidence was how suppliers are compelled to adapt to its retail software systems.

Technologies in areas to standardise its supplier chain and for suppliers to adopt in order to receive supplier contract were visible control mechanisms in its supply chain.Software systems and data bases to increase efficiency in collecting, transmitting and analysing larger volumes of safety and quality related data was largely compromised by Wal-mart suppliers (Ref; Food Standard Agency, 2000; Wilson ;amp; Clark, 1998). III) PESTEL Analysis for Wal-Mart In the macro-environment there are several factors which can have an effect on the decisions of the managers. Some of these factors could be for example taxation policies, interest rates, inflation, ageing to work, environmental issues or competition laws and many others. So understating how PESTEL factors might impact on and drive change in general is only really a starting point. Managers need to understand the key drivers of change and also the differential impact of these external influences and drivers on particular industries [.

.. ]” Johnson G. , Scholes, K. and Whittington, R.

(2008), Exploring Corporate Strategy, Prentice Hall, London. The authors are saying that PESTEL is just a tool used for strategic analysing. The retail managers need to take into consideration the factors which can have an impact on their business. These decisions can change their strategies and their development.To analyse and apply these factors to Wal-Mart we will analyse and classify them by using PESTEL method. Political This part is about government policy and the degree of intervention in the economy.

During the presidency of Ford and Reagan the citizen were not happy with the slow economy. It was a period of recession. This was a period of instability and distrust. The unemployment was very high with a peak around 10%. The government encouraged customers to consume to maintain the economy.

All of these factors were very profitable to discount retailers and Wal-Mart took advantage of it in order to progress and develop.Economic Wal-Mart started to develop in the early 1960 and its growth coincides with the decrease of the GDP growth rate. GDP Growth Rate Whilst more and more Americans were living below the poverty line, discount retailers like Wal-Mart prospered. People had less money, so they preferred to buy discount products instead of brands. Interest rate The interest rate was at a peak in the 80’s, which meant that Americans citizens and companies at that time could not borrow money to consume or invest. Fluctuations in the stock market can also badly affect the results of a company like Wal-Mart.

SocialThe social life style changed in the 80s because there were more and more single families and the householders had less money. During Carter‘s presidency there was an increase in personal savings instead of consumption. At the same time the costumers were better informed because there were more and more TV and Radio advertisements. Even today Wal-Mart uses these types of advertisements daily to promote their products. Consumers want to buy cheaper products whilst still being interested in quality.

At the same time Wal-Mart promotes their products to be of “high quality and cheaper everyday”. TechnologicThis part is about new technologies which create new products and new processes. Wal-Mart dedicates a great part of their budget to research and development. The retailer started very early to install and develop new technologies for their operations. They were one of the first retailers to use and adopt bar codes for scanning data.

They use the RFID (Radio Frequency identification) for their operations and have the same information systems with all their suppliers. Today they have one of the world’s largest private satellite communications systems. When they started Walmart . com, Wal-Mart was one of the first retailers to do business online.The retailer attracted Jeanne Jackson, talented in IT, and this venture made them one of the pioneers in online shopping because they mixed the knowledge of technology and retailing.

To broaden their offer they started to offer new services like “downloading music” and “1 hour photo”. Environmental President Carter tried to implement a strategy to improve the fuel efficiency on cars. In 1977 he established CAFE “Corporate Average Fuel Economy”. During Clinton presidency he invested more than $3 billion, which means an increase of 50% in annual financial support for research and develop clean energy technologies.We know that the Americans do not have a lot of laws concerning the environment but Wal-Mart tries to have green politics. When listening to the CEO Mike Duke: “Sustainability is an important part of our culture.

It helps us to remove waste, lower cost and provide savings to our customers. ” They involve all their actors like the suppliers and the costumers. They now started using solar energies for their stores and donate around $6 million to create green jobs in United States in 2009. Another way they save gas emissions is thanks to their transportation plan.After a truck has delivered a store, it gets products from a supplier on the way back to the warehouse.

All these actions give them a positive image and they play with the image of being a green company to attract customers because people like it when a company is responsible of the environment. Legal They are always in disagreement with their competitors because they use very low prices to compete with them. Sometimes they even sell some products below the bought prize but they keep this policy to attract as many customers as possible and of course to beat the competitors. PESTEL conclusionWal-Mart during its development and growth since 1960 took advantage of a favourable environment. They did most of their expansion between 1960 and 1990 during a period where the US economy was instable and full of distrust.

The unemployment was very high and people didn’t have a lot of money to spend. Wal-Mart prospered thanks to their policy to offer discount products of high quality. IV) Global Expansion Why Wal-Mart needs to go international? “We need the growth of Wal-Mart some day when the United States slows down,” said John Menzer, former president of the international division of Wal-Mart.His vision is one where Wal-Mart becomes a global brand, just like McDonald’s or Coca Cola . The need for Wal-Mart is that its U.

S. operations were slowing down, as the market slowly became saturated. The company had no choice but to expand rapidly abroad. Wal-Mart has over 4,263 stores and 660,000 workers outside the United States in 15 countries. Twenty five percent of the company’s sales now come from international operations.

Analysis of Wal-Mart International Expansion Strategy The main idea of the company’s vision is focused on meeting the needs of the consumers and providing the best possible services.The fact that the Wal-Mart brand helps in promoting its trademark: low cost, best value and greatest selection of quality merchandise as well as highest standards of customer service. One of the main features Wal-Mart has been known for is its pricing strategy. The purpose of the pricing policy of Wal-Mart is to “meet or beat” the retail prices of competitors for highly competitive and to create “low-price leadership” in the local marketplace, which enables them to attract a disproportionate number of customers into the store and achieve profits through economies of scale.When Wal-Mart decided to expand globally, it had an array of choices: It can acquire an existing player or build an alliance with an existing player. Wal-Mart moved abroad in the early nineties.

Wal-Mart’s first international expansion was the opening of Club Aurrera, a smaller version of Sam’s Club, in the suburbs of Mexico City through a joint venture between Wal-Mart and Mexico’s leading retailer, Cifra. It had to face initial problems, significantly poor distribution system and network in Mexico, which led to raised costs and prices.Therefore, around mid-1990s, Wal-Mart formed a partnership with the Mexican trucking company and built factories near the Mexican DCs to overcome these problems. In 1998, Wal-Mart acquired the controlling interest in Ciftra and in 2000 Ciftra changed its name to Wal-Mart de Mexico. The Mexican experience proved Wal-mart it can compete outside US.

Wal-Mart’s next move was into Puerto Rico in 1992, where the government tried to block Wal-Mart’s purchase of a local supermarket chain, arguing that it violated antitrust laws. Despite all, in 2002, Wal-Mart still purchased 35 Supermercado Amigo supermarkets.For further expansion in Latin America, Wal-Mart entered into Brazil through a joint venture – with Lojas Americana, a local retailer. In Brazil, Wal-Mart used attack strategy when it decided to overtake Carrefour, the French retailer, had been operating in Brazil since 1975 by aggressively pricing its products. This strategy backfired, as Carrefour cut prices as well. Wal-Mart realized that its global sourcing did not provide any built-in price advantage.

So Wal-Mart chose to focus on areas where it could differentiate itself: customer service and merchandise mix to entice shoppers away from Carrefour.The entry into Brazil gave Wal-Mart even greater experience in Latin America, and so it chose to enter Argentina through a wholly owned subsidiary. This decision was taken by the fact that there are only two markets in Argentina of significant size. Wal-Mart’s global expansion strategy has been forceful and powerful. First it tries to gain entry into a foreign market through takeover of a leading retailer. After buying a retailer chain, Wal-Mart changes the stores to its own.

The next major strategic advance by the company was into Canada in 1994. Wal-Mart entered by buying a weak and ailing Woolco stores.It was a time when a combination of high costs and low productivity had driven the Canadian company into the red. Wal-Mart quickly reconfigured and transformed Woolco along the lines of its successful United States model, a strategy facilitated by the similarity between the United States and Canadian markets. This transformation occurred in four central areas: 1. Work force: Defining Wal-Mart’s core beliefs and practices to the new Woolco associates.

2. Stores: Wal-Mart brought every outlet up to its own standards. 3. Customers: Wal-Mart introduced its “everyday low prices” approach to a market accustomed to low retail pricing. . Business Model: A broad merchandise mix and excellent customer service were among the core attributes that were successfully transplanted into Wal-Mart’s Canadian operation.

Wal-Mart used a similar approach in its entry into Germany in 1997; it acquired the dominant Wertkauf hypermarket chain of stores, one of the most profitable hypermarket chains in the country. However it quickly realized that building new hypermarkets in Germany is prohibited due to the mature European market and strict zoning laws. The German market was not been easy for Wal-Mart.It failed to understand Germany’s retail culture, the regulations that requires five years or more to the launch a new hypermarket and faced stiff competition among some other hypermarket chains in a stagnant market. Company faced losses and it was also breaching the German pricing regulations in 2000. The company got into trouble with the German unions, its expansion plans of adding 50 hypermarkets to its German store network got failed because the major shareholders Metro’s Real hypermarket refused to sell.

Despite the bad German experience, it did not stop the company from moving into another major European market, the UK.The strategy was the same to buy an established player. In the UK, Wal-Mart took over Asda in 1999. The two companies were a perfect match. “The Asda culture was modelled on Wal-Mart,” says one ex-employee.

The best parts of the Wal-Mart culture existed within Asda before Wal-Mart came along” the former employee continues. Wal-Mart became the biggest retailer in England by 2005, surpassing current market leader, Tesco’s. As Wal-Mart looks set to dominate the UK market, one Wal-Mart insider said that “It’s all about being able to expand in parts of the UK where our model is not yet available. In Asia, Wal-Mart’s South Korean operations were failed because of bad locations, too high prices and poor selection of merchandise. The company failed to realize that no matter how cheap Wal-Mart products are, South Koreans do not go a long distance to purchase food lacking freshness. But difficulties in South Korea have not stopped Wal-Mart’s Asian expansion.

In 2002, Wal-Mart purchased 6. 1 percent of the stock of Seiyu, a Japanese retail chain. This was followed with an unsuccessful attempt to acquire an even larger retailer, Mycal. However, Wal-Mart has increased its ownership to 66. percent over time in Seiyu.

Wal-Mart’s entry into China provides insights into the process of local adaptation process strategy. Wal-Mart accepted that most Chinese tend to buy in small quantities, and that language differences required tailored product labelling and brand names. Wal-Mart responded by experimenting with different store formats to see which had the greatest customer appeal. It built a hybrid store combining a supercenter and a warehouse club and began testing smaller satellite stores that seemed to fit better with the buying habits, as well as the transportation and shopping trends, in China.In addition to varied formats, Wal-Mart tested merchandise items to determine what would have the greatest consumer appeal and fit best with the Chinese culture.

As a result, Wal-Mart began to carry a wider range of products, particularly perishable goods that appealed to the Chinese taste. Similar to China, Wal-Mart went to India in 2005. At the time regulatory hurdles barred international retailers from directly entering the Indian market. However, in 2006, Wal-Mart beat out Tesco for a joint venture opportunity with Indian mobile services leader, Bharti. The reason was because the company wanted an early entry.As per the agreement between the two corporate giants, Bharti would manage the front-end of the business, while Wal-Mart would take care of the supply chain, logistics and other back-end operations.

According to the plan, Bharti would have 100 percent ownership of the front-end stores and will form a 50/50 joint venture with Wal-Mart to provide wholesaling and logistics. Despite stringent FDI laws, India is a ripe and appealing market for Wal-Mart with its growing middle class and economic growth. In the latest news, Wal-Mart announced to buy Massmart Holdings Ltd. In South Africa, giving the company its first stores in Africa.This specific strategy of taking over other corporate gives Wal-Mart an advantage upon entering new market, in one moment a big competitor is removed, giving Wal-Mart real estate, employees and a huge presence in the new market. This shows effective application of Wal-Mart’s size and financial power.

Wal-Mart creates brand familiarity. Slowly as the domestic Wal-Mart starts to make profit, and the local management evaluates their competition situation, Wal-Mart starts to re-decorate the acquired stores so that they look similar to “Wal-Mart’s”, later Wal-Mart starts to build igger stores in the new market. The success of this strategy can be attested by the fact that presently, Wal-Mart is the biggest retailer chain in UK and Canada. Conclusion Competition within the business world is universal, and retailing industry is no exception. Companies must undertake strategic planning, to identify objectives and evaluate the internal and external environment, to create a strategy, carry out the strategy, assess its progress and make the needed modifications to remain on the right track.Wal-Mart was able to become the world’s largest retailer by understanding this concept of strategic management and utilized it well to achieve the success it enjoys today.

In addition to these, other factors have contributed to the retail company’s success. Values have played a significant role to make Wal-Mart of what it is at present. It strives to improve itself to achieve better performance. Its willingness to try generating new ideas and practices has made Wal-Mart an innovator of standards in retailing. Making necessary changes within the store when deemed appropriate has made Wal-Mart a stronger business.

Limited barrier between management and associates resulted in production of new and better programs and policies that greatly benefited the business. Upon analysing Wal-Mart’s practices and environment, one aspect that is significantly emphasized is the company’s strong attachment to meeting customer needs. From this case discussion, it has been illustrated that how a simple greeting or thank you to shoppers can make a difference.References * David, F. (2005), Strategic Management: concepts and cases, Prentice Hall, Upper Saddle River, NJ.

Related posts:

• Strategic Management: Walmart Inc
• Stages of Strategic Management
• Issues in Strategic Management
• Essentials of Strategic Management
• The Role of Strategic Groups in Understanding Strategic Human Resource Management
• Is Strategic Human Resource Management Really Strategic?
• Importance of Top Management in Strategic Management

Quick Links

Privacy Policy

Terms and Conditions

Testimonials

Our Services

Case Study Writing Service

Case Studies For Sale

Our Company

Welcome to the world of case studies that can bring you high grades! Here, at ACaseStudy.com, we deliver professionally written papers, and the best grades for you from your professors are guaranteed!

[email protected] 804-506-0782 350 5th Ave, New York, NY 10118, USA

Acasestudy.com © 2007-2019 All rights reserved.

Hi! I'm Anna

Would you like to get a custom case study? How about receiving a customized one?

Haven't Found The Case Study You Want?

For Only $13.90/page

• About / Contact
• Privacy Policy
• Alphabetical List of Companies
• Business Analysis Topics

Walmart PESTEL/PESTLE Analysis & Recommendations

Walmart’s remote environment or macro-environment involves factors that determine the company’s success. These factors are best presented through the PESTEL/PESTLE analysis model. As a retail industry leader, Walmart continues to withstand the potential negative effects of threats in the political, economic, sociocultural, technological, ecological, and legal (PESTEL/PESTLE) aspects of its business. However, this success requires continued evaluation of the retail industry environment. These PESTEL/PESTLE factors also change over time, thereby imposing challenges for Walmart. These changes may present threats or opportunities. The retail company must exploit the opportunities and protect itself from threats. In using the PESTEL analysis, Walmart leaders and managers can determine which factors to prioritize in strategy development.

The external factors in the remote or macro-environment of Walmart, based on the PESTEL/PESTLE analysis, indicate the need for strategic focus on economic, sociocultural, and ecological concerns. Strategic formulation based on Walmart’s mission statement and vision statement is designed to target the trends identified in this PESTEL analysis.

Political Factors

Walmart considers political factors in the retail market, usually pertaining to government policies. In the PESTEL/PESTLE analysis model, politically active interest groups are also significant. The following are the political external factors in Walmart’s remote/macro environment:

• High stability of politics (opportunity)
• Political support for globalization (opportunity)
• Political pressure for higher wages (threat)

The remote/macro-environmental factors show that the retail business must address the threat of higher wages. This is a threat because it goes against the cost minimization essential in Walmart’s cost leadership generic competitive strategy .

Economic Factors

Walmart is under significant pressure from economic changes. Any such change leads to changes in the company’s revenues. Based on the PESTEL/PESTLE analysis model, the following are the economic external factors in Walmart’s remote/macro environment:

• Stability of major economies (opportunity)
• Continued growth of developing countries (opportunity)
• Decreasing unemployment in the United States (opportunity)

All these economic factors show that Walmart should exploit opportunities around the world. Emphasis should be on the fast-growing economies of developing countries, which have increasing demand for goods from retail firms.

Social/Sociocultural Factors

The social or sociocultural factors in the business environment of Walmart influence consumer perception and preferences. In the PESTEL/PESTLE analysis model, the following are the social or sociocultural external factors in Walmart’s remote/macro environment:

• Healthy lifestyle trend (opportunity)
• Cultural diversity trend (opportunity)
• Urban migration (opportunity)

These social/sociocultural factors present opportunities for Walmart. The company can increase its array of healthy products. Walmart can also increase the variety of its products to satisfy various cultural preferences. Moreover, the company can adjust its strategies to exploit increasing consumer demand in cities and surrounding areas.

Technological Factors

Walmart needs to address technological trends. In the context of the PESTEL/PESTLE analysis model, technologies affect the retail industry’s competitive landscape. The following are the technological external factors in Walmart’s remote/macro environment:

• Increasing business automation (opportunity)
• Business analytics or big data (opportunity)
• Increasing mobile device usage among consumers (opportunity)

Walmart can increase its investment in all three factors. In exploiting the opportunity in mobile device usage of customers, the company must boost its online presence. Online marketing and online selling increase Walmart’s revenues.

Ecological/Environmental Factors

The ecological or environmental factors significant in Walmart’s business pertain to environmental conservation concerns. Environmental conservation is now a popular principle. The following are the ecological external factors in Walmart’s remote/macro environment in the PESTEL/PESTLE analysis model:

• Business sustainability trend (opportunity)
• Environmentally friendly products trend (opportunity)

To attain business sustainability, Walmart must improve operational efficiency. Technological innovation helps improve efficiency in business. Improved policies and standards on products sold at its retail stores can also strengthen the company in addressing these ecological factors.

Legal Factors

Walmart is subject to the requirements of laws and regulations. Based on the PESTEL/PESTLE analysis model, these external factors usually impose limits on retail firms. The following are the legal external factors in Walmart’s remote/macro environment:

• Food safety regulations (opportunity)
• Employment regulations (opportunity)
• Tax law reform (threat)

Tax reform is a potential threat if it leads to higher tax rates. Walmart must take food safety regulations as an opportunity to improve quality standards. Also, enhancing human resource management practices can exploit opportunities concerning employment regulations relevant to the retail business.

Recommendations – PESTLE/PESTEL Analysis of Walmart

This PESTLE analysis of Walmart shows that the company has more opportunities than threats in its remote/macro environment. The external factors present significant opportunities. The firm must take a proactive approach to address threats. However, the company’s efforts must focus on exploiting the opportunities identified in the retail business environment. Based on the PESTEL/PESTLE analysis, Walmart can improve HR management practices, boost investments in technology, enhance quality standards, and expand its business worldwide.

• Paulino, E. P. (2022). Amplifying organizational performance from business intelligence: Business analytics implementation in the retail industry. Journal of Entrepreneurship, Management and Innovation, 18 (2), 69-104.
• Phan, S. (2021). The effect of PESTLE factors on development of e-commerce. International Journal of Data and Network Science, 5 (1), 37-42.
• U.S. Department of Commerce – International Trade Administration – Retail Trade Industry .
• U.S. Department of Labor – Summary of the Major Laws of the Department of Labor .
• U.S. Food and Drug Administration – Retail Food Protection .
• Walmart Inc. – Form 10-K .
• Walmart’s E-commerce Website .
• Wang, B. (2023). Is Walmart the same as ten years ago? A non-parametric difference-in-differences analysis of Walmart development. Regional Science and Urban Economics, 99 , 103863.
• Copyright by Panmore Institute - All rights reserved.
• This article may not be reproduced, distributed, or mirrored without written permission from Panmore Institute and its author/s.
• Educators, Researchers, and Students: You are permitted to quote or paraphrase parts of this article (not the entire article) for educational or research purposes, as long as the article is properly cited and referenced together with its URL/link.

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

Case study of strategic human resource management in Walmart stores

Introduction Part 1: the analysis of corporate strategy and HR strategy at Wal-Mart. Part 2: The analysis of HR policies at Walmart and its integration with Corporate Strategy. Part 3: the role of the HR manager in this company? Part 4: some advices to improve the employment practices at Walmart. Conclusion Introduction: Michael E. Porter (1980) in his famous book said there are three basic competitive strategies for a company, which are overall cost leadership; differentiation and focus strategy. Companies use these competitive strategies to achieve competitive advantage. In this case, Walmart Company is obviously taking the cost leadership strategy, that is to say, it aims to become the low-cost leader in the retail industry. Walmart maintains its competitive advantage through its satellite-based distribution system, and by keeping store location costs to a minimum by placing stores on low-cost land outside small to medium-sized towns, no matter in the US or in its abroad affiliations. Part 1: the analysis of corporate strategy and HR strategy at Wal-Mart. From this case material we could also see that Walmart purchased massive quantities of items from its suppliers to form scale economy, and with the efficient stock control system helping make its operating costs lower than those of its competitors. It also imported many goods from China, " the world factory " for its low cost. So in a word the company-level strategy of Walmart is low cost and low cost, with little differentiation strategy. Managers engage in three levels of strategic planning (Gary Dessler, 2005): the corporate-level strategy; the business-level strategy and the function-level strategy. The functional strategy should serve the overall company strategy so the corporate strategy could be implemented more effectively and efficiently. As for Walmart, its corporate-level strategy and business-level strategy, as we analyzed above, is the low cost leadership. Then we'll focus on its functional strategy, especially its HR strategy. Besides the above factors, Walmart builds its low cost leader on employment policies that help it to achieve extraordinarily low employment costs. Through low-cost HR activities, Walmart tried to maintain its predominate competitive advantage. Part 2: The analysis of HR policies at Walmart and its integration with Corporate Strategy. The basic premise that underlying SHRM is that organizations adopting a particular strategy require HR practices that are different from those required by organizations adopting alternative strategies (Jackson&Schuler, 1995). Generally, there are three SHRM theoretical models in the study of this discipline: the universalistic best practices, the contingency perspective of " best fit " and the resource-based configuration perspective. Here I would not deliberate on all these three models to examine the HR practices at Walmart, but just choose the contingency perspective of " best fit ". With this view, the individual HR practices will be selected based on the contingency of

Related Papers

DR.C.KARTHIKEYAN DR.C.KARTHIKEYAN

Strategic Human Resource Management (Strategic HRM), now in the globalised world is evolving as the fulcrum of modus operandi, in long term planning, adopted to achieve profitability for any kind of Organisation, be it production, service or even the charity organisation. SHRM operates primarily with two forms of resources. The first resource is an organization's human capital—the knowledge, skills, and abilities of its employees. The second resource is an organization's systems specifically HR policies and practices that serve to support the development of human capital. Core research in strategy is concerned with identifying both the external and internal factors that enable firms to shape a competitive advantage and achieve superior performance (Harrison & Enz, 2005). With the support of technological advancements SHRM is now a much sought after planning tool for any operating organisation in any corner of the world be it big or small.

… Journal of Human Resource Management

Sait GURBUZ

The strategic importance of human resources (HR) and their contribution to the organizational performance are receiving increasing recognition worldwide. In this study, we examined strategic human resource management (SHRM) and HR practices in Turkey to assess the impact ...

Chinmay Poddar

Human Resource Management Review

Leticia Andrade

Lanre Onabanjo

Gürhan Uysal

 This paper aims to discuss differences between human resource management (HRM) and strategic human resource management (SHRM), and aims to discuss convergence or divergence between American and European HRM. Therefore, research question is what the similarities and differences are between European and American HRM. Research methodology is based on critical review of HRM literature. Therefore, this study aims to increase conceptual ability of human resource (HR) professionals. Major result is that HRM is related with employee performance, and SHRM is related with firm performance. Secondly, European HRM is becoming similar to American HRM. The difference between European and American HRM is social context and social partners. European HRM considers social partners in management of HR.

Cynthia Zhao

Petra Saarinen

RELATED PAPERS

Journal of Manufacturing Systems

Muhammad Ramzan

BÁO CÁO KHOA HỌC VỀ NGHIÊN CỨU VÀ GIẢNG DẠY SINH HỌC Ở VIỆT NAM - PROCEEDING OF THE 4TH NATIONAL SCIENTIFIC CONFERENCE ON BIOLOGICAL RESEARCH AND TEACHING IN VIETNAM

Đ21KT3 - Lê Ngọc Mai

Cuadernos de Ingeniería

Rodrigo Javier Leiva Narváez

masoud sharififar

Tecnología Educativa Revista CONAIC

Humberto Cardenas

Mirandawati Djambe

Revista Brasileira de Ginecologia e Obstetrícia

Rodrigo Megale

Journal of Islamic Monetary Economics and Finance

Gairuzazmi Ghani

Mario Ascheri

Applied Physics Express

Monirul Islam

Dayat Dayat

永久可查英国北安普顿大学毕业证 uom学位证书电子版学位证书留服认证原版一模一样

Molecular and Cellular Biology

Tally Naveh-many

Nabil Ebraheim

Elfriede Ruttmann

PIERRE LAVILLE

Journal of Physics: Conference Series

Gopinath Shanmugaraj

Universidad de Salamanca

Maria Muñoz Benavent

Bangladesh Medical Research Council Bulletin

Md. Shafikul Islam

Goldschmidt2021 abstracts

Seyedeh Narges sadati

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Strategic Delegation: Case Studies On Outsourcing in M&A

Real-world success stories of savvy banking and corporate deal teams leveraging managed service providers to free time and resources and stay competitive.

• M&A Due Diligence

Turner Hopkins

Magali Neave

Outsourcing certain aspects of mergers, acquisitions (M&A) or other complex financing transactions has become necessary for dealmakers looking to accelerate and safeguard deal execution.

In today’s dynamic landscape, where deals face a litany of headwinds, the importance of efficiency while maintaining accuracy and compliance cannot be overstated. With this in mind, savvy investment banking and corporate development teams are refocusing their efforts on core competencies and strategic decision-making by establishing successful partnerships with managed service providers to help navigate the complexities in the M&A and financing process. For a growing number of dealmakers, delegating critical but tedious and repetitive tasks like document redactions, translations and the negotiation of non-disclosure agreements (NDAs) has become the obvious answer to freeing up valuable time and resources while mitigating risk.

Our recently published white paper, The New Outsourcing In Action: Case Studies On Transforming Deal Processes, Minimizing Risk and Maximizing ROI , takes an in-depth look at real-world case studies of deal teams leveraging outsourcing to transform their approach to closing transactions and completing complex projects.

The stories featured in the white paper discuss how deal teams overcame obstacles in their process by turning to trusted managed services partners to take on redaction, translation, NDA management and documentation work. In these instances, outsourcing these tasks was the key to swift and successful deal closing. Below are highlights from these stories.

German retailer divests a business unit with fast and thorough document redaction

A Germany-based retailer was seeking to divest one of its business units to a competitor. The business unit held significant assets, including lease agreements for more than 300 retail shops, so ensuring this sensitive information remained confidential was paramount.

Knowing that their deal team lacked the time and capacity to review and redact the confidential data, the retailer turned to their technology partner whose virtual data room (VDR) the deal team was already using for the transaction. The partner offered innovative redaction services with AI technology to review thousands of files and pages for accuracy and quality control, enabling the retailer to focus on successfully closing the sale. Read more .

Advisory firm closes a deal contingent upon last-minute document translations

A French advisory firm engaged in the sale of a French healthcare company needed to outsource translation services for a down-to-the-wire turnaround of documents required for an English-speaking potential buyer who expressed interest late in the process. Hiring a translator was not a cost-effective option, so the firm turned to their trusted VDR partner whose managed services included document translations with machine language capabilities and professional translator certification. Not only did the provider meet the deal team’s urgent request in record time, but it also saved the firm more than 90 percent in cost and time savings. Learn how .

New York City advisory firm mitigates legal risk with efficient NDA management

A New York City-based investment bank was advising on the sale of a private equity-backed company. The transaction required reaching out to numerous potential strategic buyers, drafting NDAs and making countless rounds of revisions. The bank’s team could not take on this complex task without negatively impacting the time required to execute the deal and taking on legal risk in the process. The team knew that outsourcing this process to an NDA service provider could reduce the time required by at least 50 percent, ultimately saving time to close the deal. The technology provider they enlisted helped them implement an end-to-end NDA process tailored to their needs, delivering a final set of documents in a well-organized data room. Read the full story .

With deal teams’ capacity stretched thin in a highly challenging and volatile environment, outsourcing in M&A in 2024 will undoubtedly continue its adoption as buyers and sellers strive to enhance efficiency, access specialized skills and focus on core competencies.

As demand for outsourced services continues to increase and technology advances, deal teams will find opportunities to focus on higher-level tasks. It’ll be up to the savvy dealmaker to strike the right balance between utilizing third-party providers and relying on in-house resources to unlock value, close deals and foster inorganic growth.

To read the complete set of case studies , download our white paper, The New Outsourcing In Action: Case Studies On Transforming Deal Processes, Minimizing Risk and Maximizing ROI .

For an in-depth analysis of the latest outsourcing trends in M&A, the role of artificial intelligence (AI) and automation, and how to choose the best managed service provider, check out The New Outsourcing: How Deal Teams are Accelerating M&A, Fundraising and Strategic Financing .

Recent Content

The New Outsourcing In Action: Case Studies On Transforming Deal Processes, Minimizing Risk and Maximizing ROI

‘Getting Time Back’ and More: The Power of Outsourcing for Dealmakers

AI Redaction Can Make or Break a Deal

Ready to get started?

Install the Milano Cortina 2026 app

Olympic Winter Games Feb 6 - 22, 2026

Paralympic Winter Games Mar 6 - 15, 2026

Suggerimenti

• Italia dei Giochi
• IT EN DE FR

Our projects

Join the games.

• Hospitality
• Sustainability
• Education Programme Gen26
• Cultural Olympiad
• Volunteers Programme
• Work with Us
• Become a Partner
• Become an Impact Provider
• Become a Licensee
• Discover the Games
• Dati Personali
• Sport Preferences

IOC Launches 2024/2025 International Olympic Case Study

Related articles, undergraduate and master's students compete globally in strategic sport management.

IOC launches  the 2024/2025 edition of the  International Olympic Case Study Competition (CSC). This project which will be organised for the first time in two categories in collaboration with academic partners. One is the  CSC for Undergraduate Students , under the academic lead of the European University of Madrid, with the professors Carlos Garcia Martí and Jose Ramón Bonal Sánchez) and the other the  CSC for Master’s Students , under the academic lead of the Johannes Gutenberg-University Mainz (professor Holger Preuss).

What is the CSC

The CSC consists of teams of students who compete against other teams, first within their own university class, and then against classes from other universities, with which they will be matched.  They act as agencies advising an Olympic Movement organisation on topics related to current strategic management challenges in international sport. The topic of this year’s edition is “ Growing an Olympic sport towards new participants and audiences ” .  

It's very easy to participate and University professors can use the case study in “regular” classes. In addition, it’s a good opportunity to make an International experience: first rounds can be played in any language, while teams reaching the semi-finals and finals will compete in English against other teams from all around the world. The finalists will be judged by an international panel of IOC/Olympic Movement representatives and professional and academic experts.

How to participate

The deadline for the registrations at the  CSC for Undergraduate Students  is June 30th, 2024, with a maximum of 16 university classes that will be able to participate) .   These are playing times:  Preliminary round runs from August 15th, 2024 to February 15th, 2025. Round two (semi-finals) will be held from September 1st 2024 to February 15th, 2025, while the third will be held by the end of March 2025.  

There are 3 application deadlines depending on the preferred playing time for the CSC for Master’s Students:   

May 1st 2024 for classes willing to play the preliminary rounds between May and mid-July 2024  

July 22nd 2024 , for classes willing to play the preliminary rounds between beginning of September and end of November 2024  

November 15th 2024 , for classes willing to   play the preliminary rounds between beginning of December 2024 and mid-February 2025  

For this category, the semi-finals will be held from February 24th, to March 7th, 2025 and the finals at  the end of March 2025. 

You may find further info at  this link .   

You might also be interested in:

• Brisbane 2032

Register for our newsletter

Log in to the Fan26 Digital Community and get all the news and updates on Milano Cortina 2026.