FUNDAMENTALS OF BUSINESS ANALYTICS

CIA - 1

MBAB236

Submitted by,

Vineet Naik- 2128130

Under the Guidance of

Prof. VISHAL LAKHMANI

MBA PROGRAMME

SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST (DEEMED TO BE UNIVERSITY), BANGALORE

NOVEMBER 2021
 Walmart Inc.

Introduction

Walmart Inc. is an American multinational retail corporation that operates a chain

of hypermarkets (also called supercenters), discount department stores, and grocery
stores from the United States, headquartered in Bentonville, Arkansas. The company was
founded by Sam Walton in nearby Rogers, Arkansas in 1962 and incorporated under Delaware
General Corporation Law on October 31, 1969. It also owns and operates Sam's Club retail
warehouses. As of October 31, 2021, Walmart has 10,566 stores and clubs in 24 countries,
operating under 48 different names. The company operates under the name Walmart in the
United States and Canada, as Walmart de México y Centroamérica in Mexico and Central
America, and as Flipkart Wholesale in India.[1]

Problem statement

Loss in profit is defined by the decline in sales and is also affected by the provided discounts
and operational costs (Shipping expenses) in the retail business. In this case Walmart Retail is
experiencing a decline in profits over the years due to experiencing a loss in various categories
that is affecting the overall profit of the organization.

Management theories in the cross functional setting

• Analysis of Walmart in terms of Henri Fayol’s administrative theory

This theory determines in what ways planning, leading, organizing and controlling make a
difference in company.

• Analysis of Walmart in terms of Price Leadership theory

The management of Wal-Mart emphasises on price leadership in every market since

pricing strategy is the direct approach to reach performance and attract customers. In order
to implement price leadership, they stated "Save Money, Live Better", which remains as
relevant now as it was in 1962 by Sam Walton.
• Analysis of Walmart in terms of John Adair’s leadership theory

Task, team and individual: Adair's concept asserts that the three needs of task, team and
individual are the watchwords of leadership, as people expect their leaders to help them
achieve the common task, build the synergy of teamwork, and respond to individuals'
needs. In an organization like Walmart, teamwork is most important as there are various
departments which needs to be working co-dependently to gain optimum results and it is
the responsibility of the leader to watch over these aspects of management.

• Analysis of Walmart in terms of Need for Affiliation theory

Wal-Mart also developed motivational program for their employees that match with the
theory of Need for Affiliation. This strategy refers to the strategy of Wal-Mart in using the
term of "associate" instead of "employee" on their workforce. This strategy had been started
since the time Wal-Mart agrees with J.C.Penny to refer their workforce as associates.
Moreover, the founder of Wal-Mart, Mr. Sam Walton also suggested a new way of treating
his associates by calling all levels of them by the first name. This strategy not only had
created a sense of belongingness to the employees of the company but also created a family-
oriented business for the corporation.[2]
Evaluation of the business environment

The trend analysis of profit over the years 2012-2013 depicts that the organization is
experiencing a loss in returns/profits. In the fiscal year 2013-2014 the trend curve shows a
slight positive growth but then again in the fiscal year 2014-2015 the trend shows a negative
curve, which depicts the profit of the company in the year 2015 is 21.31% less compared to the
overall profit of year 2012.

The reasons for declining profit were analyzed and the following findings are as shown below:
Here the histogram shows that customers belonging to the age group of 90-95, 95-100 are the
prime reason for decrease in profits.

Here the graph depicts the profit per category of the organization over the years 2012-2015.
The trend curve shows a huge dip in the profits of furniture which has also led to a loss of
$5455.31 for the organization.

The reason for the dip in the profits is not the sales of the furniture as the curve shows an
increasing trend in the fiscal year 2014-2015.
`

Further analysis of profit vs Subcategory revealed the products due to which the organization
has always faced losses over the years. The sub-category ‘table’ alone has contributed to 9.8%
of loss for the organization in the year 2015. Bookcases has contributed to 7% and Office
supplies (scissors, rulers and trimmers; Storage & organization) has contributed to 3.41% of
loss for the organization. These contribute to approximately 21% of losses for the organization.
Further analysis of the data shows that the shipping costs of the table and bookcases are
relatively higher than any other subcategory. The average shipping cost for tables is $57.29
and the average shipping cost for bookcases is $45.75. As Walmart offers a free delivery above
a certain amount of cart value the shipping costs are incurred by the organization which might
be a reason for the decline in profits in this sub-category.
Managerial solutions

1. The analysis of the data shows that the reason for declining profits in the organization
is due to certain sub-categories (tables, bookcases). This is also due to the shipping
costs of these products. The average shipping cost of tables is $57.29, and the average
shipping cost of bookcases is $45.75, these are also the top 2 products with the highest
shipping cost amongst all the sub-categories.

Solution: As the organization is experiencing a huge loss in both of these sub-categories:

(i) the organization must either discontinue the sales of the tables and bookcases.
(ii) Or the organization must charge shipping costs to the customers for the delivery of
these products to make a profit.

2. Further it is also revealed that the age group of 90-95 and 95-100 are contributing
majorly to the losses of the organization.

Solution: It is advisable that Walmart sells less of the products which are targeted specifically
towards the age group of 90-100 and provides less discounts or no discounts to such products.
Although discontinuation of sale of such products seems unethical so the prices must be
increased.
REFERENCES

(i) https://en.wikipedia.org/wiki/Walmart
(ii) https://www.uniassignment.com/essay-samples/management/background-of-wal-mart-
management-essay.php