Wal-Mart Audit

1. SWOT Analysis:
Strengths Weaknesses
 Large scale operations – worldwide  Monopolizing power
 One stop shopping  Legal issues
 Efficient working capital management  Product recalls/quality control
Internal

 Strong information technology & data  Inconsistent in-store experience

sharing  Weak mission statement
 Supply chain & Logistics capabilities  Wages & Benefits
 Everyday low prices  Slow to react
 Fares well in economic conditions
 Focused on Walton’s philosophy &
leadership style
Opportunities Threats
 Online sales  Increasing competition
External

 Acquisition of a strong retailer  Regulation

 International expansion – Asia  Press from Unions
 Ease of shopping for consumers  Economic conditions
 Global Food Safety Initiative (GFSI)  Opposition from local communities
 Green Retailer /small business owners
2. Problem Issues:  Law suits
Monopolizing Power: Wal-Mart's strategy has been to saturate a geographical area to minimize head to
head competition. Now, the majority of Wal-Mart stores face direct competition mostly due to the
company's expansion into other areas of the domestic market. Their efforts have sometimes led to bad
publicity. It has lead to many community activists trying to keep Wal-Mart out of their communities for
the fear that it will make it extremely difficult for small retailer to survive forcing them to close due to
the lack of sales.
Legal Issues: Wal-Mart has had several legal issues over the years: arrests of illegal immigrants cleaning
stores, dumping hazardous waste, harassment of workers (union), violation of California state law selling
guns before waiting period, violating New York’s toy weapon laws, and refusing to stock parental
warning stickers. Scott dismissed the bad publicity, but then it started to take a negative toll on the
company’s sales growth and expansion plans. (Just to name a few)
Wages and benefits: Wal-Mart is always in the pursuit for low prices, yet they pay their employees
substandard wages and insufficient medical benefits. They were also cited for sourcing their products
from the Chinese, decreasing the amount of jobs in the United States. Unions, journalists, and activist
groups are continuing to put pressure on Wal-Mart to raise its standards.
Product Recalls: frequent product recalls indicate quality control measures. This could damage the
perception about Wal-Mart and decrease customers in stores.
Inconsistent in store experience: customers complaining about long lines and the insufficient quality of
products offered.
Slow to react: Wal-Mart executives shrugged off bad publicity - instead they concentrated on running
the business and expanding the company’s operations into more communities.

3. Alternatives:
Improve relations with local communities: Many communities oppose big box stores in their
communities. Because Wal-Mart competes on low-cost, it is hard for many small business owners to
stay afloat with merchandise offerings similar to Wal-Mart. Many small business fail within 2 years, this
has been dubbed the “Wal-Mart Effect.”
Strengthen employee commitment to an ethical organizational culture: Wal-Mart employs 2.1 million
people worldwide. It is difficult to develop a strong commitment when make employees don’t want to
make a career of working at Wal-Mart.
Improve wages and benefits: Over the years Wal-Mart has been in the media spot light because of bad
labor standards and insufficient medical benefit offering to employees. Only about 50% of Wal-Mart
employees sign-up for Wal-Mart offered health-care.
Be proactive in changing Wal-Mart’s corporate image: In recent years Wal-Mart has been a target for
bashing because of legal issues and bad public relations. In order to changing Wal-Mart’s top managers
need to be on the front-line making it happen. This will help commitment be transferred down to lower
levels.

4. Decision Statement:
Wal-Mart has been successful and it has promising future, but there is a negative side to success for
Wal-Mart. Remaining competitive, in local communities will be a difficult task for Wal-Mart. To be
successful Wal-Mart needs to strengthen its public relation image by being more sensitive in the
communities in which it operates. Wal-Mart needs to open stores in larger cities that can carry the
weight without destroying the economy of small businesses and stay away from small towns as not to
take businesses away from them (changes the image to show that you care). Making citizens of these
small towns more aware of the “Store of the Community” section at Wal-Mart may improve local
acceptance.

In order for Wal-Mart to be successful in changing its image in the future, all levels of the organization
need to be proactive and involved. Change starts at the top of an organization and funnels down.
Without strong commitment up top, employees at lower levels will fail to deliver the right image to
customers. Exhibiting a strong culture will improve Wal-Mart’s public image via everyday employees.
Making sure that all employees and management throughout the company are trained effectively in D &
I (Diversity and Inclusion), compliance, governance and ethics will help decrease unethical choices.

Offering wages and benefits that enable the employee to live without government assistance and to be
on the same level as other supermarket employers will giving employees benefits will increase their
morale as well as Wal-Mart’s image. Improving the benefits package will allow employees more
flexibility in the plans they choose making them customized.

The use of advertisement can also be used to communicate Wal-Mart’s green initiative and changed
corporate image to customers.