Running Head: STRATEGIC MARKET ANALYSIS 1

Strategic Marketing Plan for Walmart

Author’s Name

Institution
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Executive Summary
Walmart is a multination retail chain that has consistently performed well in its chosen market

over the past few years. It has been able to maintain a competitive advantage by offering its

customers products at affordable prices. A SWOT analysis of the company indicates that it has a

strong market presence and efficiently aligned business operations that have enabled it to supply

products to its wide variety of customers in a timely manner. However, its large size denies it

flexibility, and this could give its competitors an advantage. Mergers and partnerships however

provide opportunity for Walmart to increase its market share, but in order to succeed the

company must mitigate the effects of stiff competition in the industry.

Various external political, economic and social factors can affect Walmart’s business activities in

the countries that it operates in. However, if the company adheres to the regulations and policies

of its host countries, it will remain sustainable in its business activities. The company can

therefore set strategic goals that will enable it to expand into new markets and thus compete

effectively with its rivals.

The goals for increased competitive advantage that are outlined in this report include investment

in international expansion and increased use of digital technologies in the supply chain and

business processes. The company’s strategic plan is outlined and will be developed in two stages

over five years. Various benchmarks to measure the success of digital technologies and success

against the competition in the new market will include brand recognition, customer satisfaction,

brand recall, market share, product performance, and reach.

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Contents
Executive Summary.........................................................................................................................2
1. Introduction............................................................................................................................4
1.1 Walmart vision statement..............................................................................................4
1.2 Walmart mission statement............................................................................................4
2. Internal Business Environment.............................................................................................4
2.1 Company Strengths and Resources...............................................................................4
2.1.1 Competitive advantage............................................................................................4
2.1.2 Brand equity.............................................................................................................5
2.2 SWOT analysis................................................................................................................5
3. External Business Environment...........................................................................................6
3.1 Competitor Analysis.......................................................................................................6
3.2 PESTLE Analysis............................................................................................................7
3.3 Opportunities and Threats in the Environment...........................................................9
4. Strategic Marketing Goals....................................................................................................9
4.1 Strategies for goal achievement...................................................................................10
4.2 Areas of priority............................................................................................................10
4.3 Initial areas of priority.................................................................................................11
4.4 Benchmarks...................................................................................................................12
References......................................................................................................................................14
Appendix........................................................................................................................................18
Appendix 1: Walmart Porter’s 5 forces.....................................................................................18
Appendix 2: Walmart Marketing Mix.......................................................................................21
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Strategic Marketing Plan for Walmart

1. Introduction

Walmart is a multinational retail chain with various grocery stores, discount department stores,

and hypermarkets (Walmart, 2020a). It was ranked 1st in the Fortune 500 list in 2019 due to its

brand and financial position in the business market (Fortune.com, 2019). This ranking has been

consistent over the past few years (Fortune.com, 2019), demonstrating the company’s ability to

maintain its competitive advantage. As of 2019, the company’s revenue was $514 billion and its

profit was $6.6 billion (Walmart, 2019a). This was an increase over the previous year, as the

company implemented new strategies in online sales and personal shopping strategies in order to

increase its customer base.

1.1 Walmart vision statement

Walmart aims to be the best company to which customers will turn to for affordable products no

matter the location in which they are (Lund, 2019). This means that the company is focused on

offering customer-centric products and services because they play a major role in revenue

generation.

1.2 Walmart mission statement

The company’s mission is to offer affordable products that will save people money so that they

can improve their lives (Lund, 2019). This mission has been largely accomplished because the

company offers essential products at affordable prices (Pratap, 2020). However, it is impossible

to measure if Walmart has enable people to improve their lives and to live better.

2. Internal Business Environment

2.1 Company Strengths and Resources

2.1.1 Competitive advantage

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The company has a unique selling proposition based on offering its products at “everyday low

prices” in its stores. Because of these low prices, Walmart has higher demand for its quality

products that increases its competitive advantage. This ensures customer loyalty and ultimately

business sustainability (Pratap, 2020). For example, Walmart has “Black Friday”, an event

during which it offers products at very cheap prices (Walmart, 2016). This event has been copied

by retailers across the globe due to its ability to generate high volume and sales.

Walmart also has a large assortment of goods and inventory that ensures the company is able to

provide its customers will all the products that they need. Additionally, this helps Walmart to

play over volumes for profit and to offer the products at a very low price (Walmart, 2019b).

Its operations are extensive and require efficient control. Consequently, Walmart ensures that it

gives special attention to its business processes to ensure that products are always available and

reach customers on time (Walmart, 2019b). Its supply chain is very comprehensive and is

managed by a professional team in order to keep processes streamlined (Lu, 2018).

2.1.2 Brand equity

Walmart is ranked among the most valuable retailers in the world due to its extensive expansion

strategies and digital innovation that have enabled it to offer high quality services such as

packing groceries at high speeds (Grill-Goodman, 2020). It has also been raked 1st for four

consecutive years on Fortune 500 due to its success in it business operations (Fortune.com,

2019). As of March 2020, Walmart’s market capitalization was at $345 billion (S&P Global

Market Intelligence, 2020). This brand equity is a result of its low prices and consistent

performance over the years.

2.2 SWOT analysis

2.2.1 Strengths
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Walmart is the largest retailer in the world and has a strong scale of operations and market power

as compare to its competitors. It also employs more than 2.2 million staffs that are a key aspect

of the business, and it has a presence in most geographic markets (Fortune.com., 2019). Its

economies of scale ensure that it can share its fixed costs over numerous products, thus making

the products cheap and affordable for many consumers (Hyde, 2019). Efficient and effective use

of resources such as distribution facilities and information systems means that the retailer can

operate efficiently in a large number of locations. It is also innovative, invests in digital

strategies, customer focus, and uses an extensive supply chain system that ensures its products

reach customers on time (Morgan, 2019).

2.2.2 Weaknesses

The company sells products across many sectors (Walmart, 2020a), so it does not have the

flexibility that companies with only a few products have. Additionally, the significant effort

needed to control the operations could leave it weak in some areas and thus give leverage to its

competitors.

3. External Business Environment

3.1 Competitor Analysis

Walmart’s competitors include Home Depot, Tesco, Amazon, Costco, Best Buy, Carrefour, and

Metro AG, among others. In 2019, Walmart’s revenue growth rate was 2.07% while that of its

competitors was 6.26% (CSI Market, 2020). At the same time, its net margin was 3.03 as

compared to that of its competitors at 3.4 (CSI Market, 2020). Its net income year on year in the

last quarter of 2019 was 12.61%, which was slower than that of its competitors at 13.73% (CSI

Market, 2020). However, with the presence of online retailers such as Amazon in the market,

Walmart and other competitors have been forced to change their sales and marketing strategies.
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These companies thus use strategies that enable them to remain competitive in the market based

on how they interpret their current and future retail challenges (Bold Business, 2020).

3.2 PESTLE Analysis

3.2.1 Political factors

Walmart is globally recognized as it serves at least 285 million customers per week (Statista,

2020). Due to its global operations, the company must follow the regulations and policies of the

countries that it operates in. Furthermore, if the company is operating in an unstable country,

there is a chance that instabilities might affect its operations. Additionally, governments might

establish regulations that threaten revenue generation for Walmart. For example, Walmart and its

competitors were affected when the government raised the minimum wage to $15 per hour in

2019 (Stolberg & Smialek, 2019). While this was a benefit for employees, it nevertheless

increased the company’s costs and thus reduced revenues.

3.2.2 Economic factors

Economic instability affects Walmart’s operations. The company usually offers low and

affordable prices, but if the economy faces a downturn, Walmart would be forced to increase its

prices. This could in turn motivate customer switching to other brands. However, if the company

does not increase its prices, it will not effectively compete in the market. This is because other

brands usually increase their prices and maintain profitable margins in ways that Walmart is

unable to replicate. Because different countries face different economic challenges, Walmart

should clearly evaluate the economic environment in its countries of operations, particularly

looking at taxes, interest rates and tariffs.

3.2.3 Socio-cultural factors

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Poor marketing strategies that do not consider cultural and social factors can reduce Walmart’s

profitability and market share. For instance, because Walmart is an American brand, it failed in

the German market because it did not take into consideration the needs of the local population

(Christopherson, 2007). International companies can only achieve long-term sustainability if they

understand their chosen markets and are sure of what their customers want. Customers nowadays

also value convenience, so Walmart must focus on providing value-added services that make

customers’ lives easier. Consequently, the company has e-Commerce stores that allow

consumers to make online purchases from their homes and to have their products delivered.

However, even though Walmart has implemented this strategy, Amazon is still more effective in

this area (Johnson, 2020), so Walmart must find new and attractive e-commerce strategies to

attract and retain customers.

3.2.4 Technological factors

Walmart uses advanced robotics and automation systems to manage production, fill orders, and

maintain optimal cleanliness in the facilities (Perez, 2019). This has helped to reduce its overall

costs and allowed its employees to focus on more important business aspect such as customer

satisfaction. Furthermore, as online shopping trends increase, more people now use digital

devices to make purchasing decisions (Meyer, 2020). This has allowed the company to reach its

customers more directly as they engage with Walmart on its website and social networks.

3.2.5 Legal factors

Walmart must adhere to labor laws, employment laws, data protection laws, and health and

safety laws in the countries in which it operates. Because these laws differ from country to

country, Walmart might face challenges in implementation, but it must adhere to the laws if it

wants to continue operating in these countries.

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3.2.6 Environmental factors

Walmart must ensure that it participates in environmental sustainability in all its operations. To

that end, it ensures that its supply chain, its products, and raw materials all use sustainable

practices. The company has consequently improved its sustainability index by 28%, achieved an

80% supplier participation rate in environmental sustainability, and it now uses renewable

energy sources for its operations (Walmart, 2019c). Furthermore, it has reduced its greenhouse

gas emissions by 6.1% and this has ensured that it reduces its carbon footprint in the

environment (Walmart, 2019c).

3.3 Opportunities and Threats in the Environment

3.3.1 Opportunities

Mergers with other global retailers by especially focusing on specific markets, should enable

Walmart to increase its competitive advantage and market share. The company can also expand

into markets in developing countries such as in Africa, because the purchasing power of

consumers in these markets is increasing (Signe, 2019).

3.3.2 Threats

Walmart faces stiff competition from companies such as Target, Amazon and Costco (Morgan,

2019). These companies also have significant economies and revenues that they can leverage to

take the customer share away from Walmart. Additionally, Walmart faces threats due to the

political uncertainties in the countries that it operates in. If a country is experiencing political

turmoil, this will affect Walmart’s operations.

4. Strategic Marketing Goals

Goal 1: Invest in international expansion by the end of 2022

Goal 2: Increased use of digital technologies in 70% of its operations by December 2021
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4.1 Strategies for goal achievement

Goal 1: Invest in international expansion by the end of 2022

Walmart needs to prioritize its competition and new entrants in the industry because these are the

ones that have the ability to disrupt its operations and to reduce its market share and competitive

advantage. To do so, the company should invest in international expansion in new and

developing markets so as to exploit the growing purchasing power in these markets (Signe,

2019). This will allow Walmart to increase its market share, particularly if it partners with other

retailers already established in those markets.

Goal 2: Increased use of digital technologies in 70% of its operations by December 2021

Walmart should increase it use of digital technologies, particularly in its supply chain and in its

internal business processes. This should enable the company to enhance its overall efficiency and

consequently its cost effectiveness that will ensure Walmart achieves its corporate mission and

vision goals.

Implementation of the above strategies should give Walmart an opportunity to counteract the

impacts of strong competition and the threat of new entrants.

4.2 Areas of priority

To achieve optimal outcomes, Walmart should use short- and long-term goals that will be

carefully evaluated within the next five years as follows:

 Revenue increases

 Higher profits

 Conversion rates

 Online ad open rates

 Market share
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 Competitive analysis

4.3 Initial areas of priority

Based o the previously mentioned areas of improvement and metrics, it is intended that the

following areas will receive priority over the coming five years:

Year 1 and 2

 Development and implementation of a comprehensive action plan to mobilize action

around international expansion and the use of digital technologies.

 PR and media campaigns that increase awareness on Walmart’s expansion process and

the benefits of the ongoing process.

 Training and development of relevant employees for the new locations.

 Product development for the new markets based on the cultural, social and financial

needs of the individual locations.

 Deployment of the new digital systems for the supply chain and for other internal

business processes.

 Development of a plan to improve overall business processes.

Years 3 to 5

 Continued provision of international expansion assessments and digital innovation

assessments.

 Detailed program analysis to determine the impact of international expansion and digital

technologies on Walmart’s growth.

 Additional strategic planning based on outcomes from the detailed program analysis.

 Continued analysis of the alignment and integration of international expansion and digital

innovation with business sustainability and market share.

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The recommendations offered in this strategic plan are necessary for Walmart’s long term

sustainability and retention of competitive advantage. Over the next five years, Walmart should

achieve its vision of offering affordable products to its customers in whichever location they are

in.

4.4 Benchmarks

In order to monitor growth and to determine the success of the marketing plan, Walmart will use

the following benchmarks:

4.4.1 Brand recognition

This represents the percentage of the new market that recognizes Walmart’s brands as compared

to those of the competition.

4.4.2 Customer satisfaction

High customer satisfaction will demonstrate that Walmart is performing as well as or even better

than the competition in the new market. Furthermore, it will also show that the new technologies

that the company has invested in are providing high quality products and services.

4.4.3 Brand recall

This is the percentage of the new market which will swiftly recognize Walmart’s brand as

compared to competitor brands.

4.4.4 Product performance

The new technologies should enable Walmart to improve brand performance. Therefore,

acceptance of the company’s products in the new market will show that its product development

strategy has been successful.

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4.4.5 Market share

An increase in Walmart’s market share in the new market will indicate that the sales of its

products have increased.

4.4.6 Reach

Walmart will also benchmark the percentage of the target audience that effectively gets access to

its marketing messages, as compared to the messages received by the competition.

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References
Bold Business. (2020, March 6). “Target, Costco, Walmart And Amazon: Dealing with a tough

retail landscape.” Retrieved from https://www.boldbusiness.com/society/target-costco-

walmart-amazon-tough-retail-landscape/.

Christopherson, S. (2007). Barriers to ‘US style’ lean retailing: The case of Wal-Mart's failure in

Germany. Journal of Economic Geography, 7(4), 451-469.

CSI Market. (2020). “WMT sales vs. its competitors Q4 2019.” Retrieved from

https://csimarket.com/stocks/compet_glance.php?code=WMT.

Fortune.com. (2019). Walmart. Retrieved from https://fortune.com/fortune500/2019/walmart/.

Grill-Goodman, J. (2020, January 27). “Retail’s most valuable brands.” Retrieved from

https://risnews.com/retails-10-most-valuable-brands-2020

Hyde, R.R. (2019, June 25). “How Walmart model wins with “everyday low prices”.” Retrieved

from https://www.investopedia.com/articles/personal-finance/011815/how-walmart-

model-wins-everyday-low-prices.asp.

Johnson, T. (2020, January 20). “Walmart vs. Amazon: Which retailer wins in the ecommerce

space?” Retrieved from https://tinuiti.com/blog/walmart/walmart-vs-amazon/

Lu, C. (2018,October 4). “Walmart’s successful supply chain management.” Retrieved from

https://www.tradegecko.com/blog/supply-chain-management/incredibly-successful-

supply-chain-management-walmart.

Meyer, S. (2020). “Evolving ecommerce: 14 trends driving online retail in 2020.” Retrieved

from https://www.bigcommerce.com/blog/ecommerce-trends/#14-ecommerce-trends-

leading-the-way.

Morgan, B. (2019, August 21). “7 ways Amazon and Walmart compete – A look at the

numbers.” Retrieved from

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https://www.forbes.com/sites/blakemorgan/2019/08/21/amazon-versus-walmart-goliath-

versus-goliath/#395764b74674.

Patel, S. (2019, June 3). “Something enormous: Inside Walmart’s ambitious streaming video

plans.” Retrieved from http://digiday.com/future-of-tv/from-80s-reboots-to-shoppable-

ads-inside-walmarts-streaming-video-future/.

Perez, S. (2019, April 9). “Walmart to expand in-store tech, including Pickup Towers for online

orders and robots.” Retrieved from https://techcrunch.com/2019/04/09/walmart-to-

expand-in-store-tech-including-pickup-towers-for-online-orders-and-robots/?

guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer

_sig=AQAAADxxEYh6F5c9mHDILvyA7kuOrQScbhV1OKtJkWO_XD_deuS55h6ajP

XhW5w-NT2ndt9u4TI4w7mi9Mln-FfPsK8YEVDlc9m73AmSEqo8Gr-

RarQxeJHpyn_jy_T-oYLhK5BetwsYXSbLulZ0rdxK-sfHhic5XNkaOD_VX6aIxJnD

Perez, S. (2019, September 12). “Walmart Grocery is expanding its $98 per year ‘Delivery

Unlimited’ subscription across the US.” Retrieved from

https://techcrunch.com/2019/09/11/walmart-grocery-is-expanding-its-98-per-year-

delivery-unlimited-subscription/

Pratap, A. (2029, February 16). “EDLP pricing: Walmart’s price advantage.” Retrieved from

https://medium.com/@abhijeetpratap/edlp-pricing-walmarts-price-advantage-

948ec1145ec5.

S&P Global Market Intelligence. (2020). “WMT: Walmart Inc.” Retrieved from

https://finbox.com/NYSE:WMT/explorer/marketcap.

Sellerapp. (2019). “10 Walmart new selling strategies that can help drive more sales.” Retrieved

from https://www.sellerapp.com/blog/walmart-selling-strategies/.
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Signe, L. (2019, April 3). “Africa’s emerging economies to take the lead in consumer market

growth.” Retrieved from https://www.brookings.edu/blog/africa-in-

focus/2019/04/03/africas-emerging-economies-to-take-the-lead-in-consumer-market-

growth/.

Statista. (2020). “Walmart – Statistics and facts.” Retrieved from

https://www.statista.com/topics/1451/walmart/.

Stolberg, S.G. & Smialek, J. (2019, July 18). “House passes bill to raise minimum wage to $15, a

victory for Liberals.” Retrieved from

https://www.nytimes.com/2019/07/18/us/politics/minimum-wage.html.

Walmart. (2016). Notes to know about Walmart’s Black Friday. Retrieved from

https://corporate.walmart.com/newsroom/life/20161123/notes-to-know-about-walmarts-

black-friday

Walmart. (2019a). Earnings release. Retrieved from

https://s2.q4cdn.com/056532643/files/doc_financials/2019/Q4/Q4FY19-Earnings-

Release-Final.pdf.

Walmart. (2019b). 2019 annual report. Retrieved from

https://s2.q4cdn.com/056532643/files/doc_financials/2019/annual/Walmart-2019-AR-

Final.pdf

Walmart. (2019c). 2019 environmental and social governance report. Retrieved from

https://corporate.walmart.com/media-library/document/2019-environmental-social-

governance-report/_proxyDocument?id=0000016c-20b5-d46a-afff-f5bdafd30000

Walmart. (2020a). About us. Retrieved from https://www.walmart.com.

Walmart STRATEGIC MARKETING 17

Walmart. (2020b). Our history. Retrieved from https://corporate.walmart.com/our-story/our-

history.

Walmart. (2020c). Location facts. Retrieved from https://corporate.walmart.com/our-story/our-

locations.
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Appendix

Appendix 1: Walmart Porter’s 5 forces

The threat of competition

This is a strong threat because many of Walmart’s competitors such as Amazon also enjoy

significant economies of scale (Morgan, 2019). There is also a large variety of retail companies

that use aggressive marketing tactics to attract customers. Therefore, Walmart must remain

aggressive in order to maintain its competitive advantage as the best global retailer.

Bargaining power of buyers

This is a weak force because many of the consumers have highly diverse needs, and individual

buyers do not have the power to impact global sales. The high diversity of buyers means that

they do not have the power to collectively put pressure on the company and on other retailers in

the industry.

Bargaining power of suppliers

This is also a weak force because there are numerous suppliers in the retail industry, so Walmart

can quickly and easily source for the suppliers that it needs. Furthermore, the tough competition

between suppliers means that they are willing to sell their products to Walmart and other retailers

at affordable prices.

Threat of substitutes

The threat of substitutes is weak. Walmart sells a large variety of goods which have few

substitutes. Additionally, most of the substitute products available are more expensive than

Walmart’s and this reduces consumer motivation to switch.

Threat of new entrants

The threat of new entrants is very strong because many new companies are capable of entering

the market in spite of the presence of large retailers like Walmart. The retail industry has a low
Walmart STRATEGIC MARKETING 19

cost of doing business and requires moderate capital costs, and this makes it easy for even small

players to enter into the industry.

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Appendix 2: Walmart Marketing Mix

Product

The company’s primary product is retail services that are also enabled through e-commerce.

Walmart also offers private-label brands such as Sam’s Choice and Great Value, and it also has

on-demand digital content streaming services (Walmart, 2020b). This allows the company to

provide efficient and convenient services to its customers.

Price

Walmart uses the “everyday low price” strategy to generate high revenue (Pratap, 2020). The

main aim of this strategy is to attract a large number of customers and thus increase sales volume

and ultimate profitability. The high sales volume ensures that the company gains cost leadership

for competitive advantage and for profits even though the profit margins might be low.

Additionally, the company uses a market-oriented pricing strategy to sell its house-branded

products and its media content from the streaming services (Patel, 2019). Further, it utilizes a

flat-rate subscription pricing strategy for delivery services for the products bought on its online

website (Perez, 2019).

Place

The company uses an intensive distribution strategy to ensure that all of its stores and online

channels offer a similar variety of products and services and that its operations remain cohesive

throughout the stores. This strategy helps the company to give its customers strategic locations

and online services that meet their needs and thus increases Walmart’s market reach around the

globe. Walmart has 11,500 stores in 27 countries as well as e-commerce websites in 10 countries

(Walmart, 2020c). This means that it is easy for its customers to easily access its stores and to

make purchases.

Promotion
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The company uses TV and print advertisements, personal selling, PR campaigns, and sales

promotions (Sellerapp, 2019). It also offers discounts and special deals in order to attract more

customers to its online and physical stores. The company also sometimes sponsors charity

programs so as to increase brand awareness in the public.