Pricing Strategies

With a revenue of 486 billion USD in the year 2016, Walmart is the world’s
largest company by revenue. It is also the largest private employer with 2.3
million employees and operates more than 11,000 outlets. Today Walmart
contributes about 2% to the US economy. Walmart achieved their success in
large part due to their Everyday Low Price{EDLP}strategy, a strategy that
offers low prices to customers throughout the year instead of offering these low
prices only on sales events. This strategy increases both sales and customer
loyalty. EDLP results in Walmart having less costs incurred for advertising as
they advertise on a more regular basis and therefore incur less cost per
advertisement. Consumer demand becomes more predictable as their prices
change less frequently and predictable demand leads to having fewer incidents
of overstocking/understocking. High-low pricing may benefit more frequent
shoppers who can exploit sales promotions. However, people are shopping less
frequently in these market segments and therefore prefer having a low price
whenever they visit the store.

Promotion Strategy
Promotional strategies are the strategies an organization uses to attract or
enlighten the public about its product.
1. Walmart runs frequent promotions, with available discounts across all
seasons.
2. The store uses slogans that are associated with low prices like “save money,
live better”, “lowest price store”, “worry-free fresh”, and the most common,
“everyday low prices”.
3. Walmart employs a diversified array of advertising media, including TV ads,
billboards, social media, and even their eCommerce platform.
4. They provide secure shipping methods that ensure the highest level of service
for customers who purchase online.
5. Walmart offers reliable warranties and replacement policies for a majority of
their items sold, which gives customers peace of mind when purchasing.
Distribution
Strengths
1. Being the largest retailer in the world, with unmatched scale of operations
and strong market power over suppliers and competitors:
Walmart is the world’s largest company by revenue and the largest retailer in
the world. It is also the world’s largest private employer, with more than 2.3
million staff. What does “Being the largest retailer in the world” mean to
Walmart?
a. Economies of scale: The company can share its fixed costs over many
products, which makes Walmart one of the cheapest places to shop.
b. Efficient and effective use of resources: Walmart can use its resources, such
as distribution facilities, information systems, knowledge and other capabilities
and skills, more efficiently and effectively over a large number of locations.
c. Huge gains from implementing best practices: The company can identify
better ways of performing tasks, managing stores and hiring new employees and
can achieve huge gains by implementing these best practices in its vast network
of stores.
d. Experimenting with less risk: The company can engage in many experiments
within its stores or in new store formats without risk of losing a substantial
amount of profits or revenue.
e. Market power over suppliers and competitors: Due to its size, Walmart can
exercise its market power over suppliers by requiring lower prices from them.
The company can also affect the competition by selling selected items at a loss,
thus driving competition out of the market.
2. International presence:
Walmart went international in 1992 through a joint venture with Cifra, a
Mexican retail company, opening a Sam’s club in Mexico city. The company
operates under different brand names, such as ASDA in the UK, Walmex in
Mexico and Seiyu in Japan. Walmart strongly focuses on its international
segment as this provides an opportunity for growing the company’s operations.
The company added 47 new supermarkets/stores in central America, 15 in chile,
4 in china and 11 in the UK in 2017, which allowed it to grow the international
sales.
Weaknesses
Basically the weaknesses of Walmart as a business have been identified many
years ago, it revolves on the stronghold to its traditional practices and company
failure to exceed previous sales.
1. Employee treatment and working conditions: Walmart has received criticisms
and lawsuits several times regarding its workforce. Low wages, inadequate
healthcare, and poor working conditions are few of the issues that have been
publicly criticized.
2. Large span of control: Its highly extended size and massive span of control
could leave Walmart weak in some areas.
3. Thin profit margins: Walmart focuses on a cost leadership strategy, it results
in thin profit margins for the company.
4. Gender discrimination: A lawsuit was filed against Walmart in 2007 that
allegedly claimed gender discrimination in job opportunities at Walmart.
Female employees are discriminated in regards to promotions and pay scale as
per this lawsuit.
5. Imitation: Walmart’s business model can be easily copied. The company
doesn’t own any specific competitive edge over its rivals except its huge
business size.
Social media marketing strategy
Social media has become one of the main channels of marketing, promotional
campaigns and customer engagement for most brands. However retail brands
are also using them for customer service and feedback. The growth of social
media channels brought several new opportunities for retailers making it easier
to address complaints and engage customers as well as run seasonal campaigns
and real-time promotions. Several of the leading physical retailers of the US
including Walmart are investing in social media marketing to grow their
influence and engage their followers. While Facebook is the leading social
media marketing channel of Walmart, the brand is also utilizing other networks
like twitter and Instagram for promotions and managing customer connection.
Among the several benefits that social media offers for retail brands, customer
service and feedback are of particular importance making it easier for
companies to improve their customer experience on digital channels. When
used in conjunction with the e-commerce app and blogging, social media is
highly effective at engaging customers and running seasonal promotions to
drive sales. Moreover, investing in social media marketing helps brands like
Walmart improve customer loyalty, strengthen competitive advantage and grow
their overall influence in both the online and offline environments.
Websites where Walmart advertises are:
1. Facebook
2. Instagram
3. Linked in
4. YouTube
5. Twitter

CSR OF COMPANY
Corporate Social Responsibility(CSR) is a critically important aspect of the
business for any company of a large size, including Walmart. Walmart CSR
strategy rely on the following three principles:
1. Creating economic opportunity for our employees, suppliers and people who
work in retail and retail supply chains beyond Walmart.
2. Enhancing the sustainability of operations and product supply chains for
people and the planet.
3. Building strong communities where the retailer operates.
Walmart’s aims to achieve the following 3 aspirational goals formulated in
2005 by Lee Scott, who was Walmart CEO at the time:
1. Supply the company with the 100 percent renewable energy
2. Create zero waste
3. Sell products that sustain people and the environment
The company releases global responsibility report annually and it includes the
details of Walmart CSR programs and initiatives engaged by the company.
Categories of CSR activities:
a. Supporting local communities
b. Educating and empowering workers
c. Labour and human rights
d. Employee health and safety
e. Gender equality and minorities
f. Environment
*energy consumption
*water consumption
*recycling
*CO2 emissions
g. Sustainable sourcing
h. Other initiatives

Case study of Walmart company

Walmart started with small, with a single discount store and the simple idea of
selling more for less, has grown over the last 50years into the largest retailer in
the world. Each week over 265 million customers and members visit
approximately 11,400 stores under 55banners in 26 countries and eCommerce
websites. With fiscal year 2020 revenue of $524 billion, Walmart employs over
2.2 million associates worldwide. Walmart continues to be a leader in
sustainability, corporate philanthropy and employment opportunity. Its all part
of our unwavering commitment to creating opportunities and bringing value to
customers and communities around the world.
Walmart in the number one retailer in the United States and is at the top of the
Fortune 500 listing. Walmart operates in many countries world-wide and is
moving into new countries every year. Walmart is also expanding as a retailer.
They have expanded into many other sectors of the marketplace, including
groceries, gas stations, electronics, and auto maintenance. Each year, Walmart
finds new ways to grow and offer more services to their customers. The number
of people who have a stake in Walmart also grows every year. Each year, more
claims are made against Walmart by the unions and other businesses that have
been forced out of business. Walmart is often able to uncut many other local
industries and more and more local businesses are shutting down when Walmart
moves into town. The unions are filling more court claims against Walmart
because they encourage their workers not to join unions.
As a result of Walmart’s ever growing size and variety of services they offer,
their public affairs department is going to become more and more important.
There is going to be more regulation against them and their public affairs
department is going to have to work harder to make it possible for Walmart to
continue to grow. And as animosity against Walmart becomes more widespread,
here and in foreign countries, Walmart is going to have to work harder to
maintain their good reputation. Walmart’s foundation will become increasingly
more important for giving things back to the community.
In order for Walmart to stay at the top of their game and follow the company
strategy and achieve their key policy goals, they are going to have deal better
with their stakeholders and make sure they guard their reputation well.