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Table of Contents
Introduction ............................................................................................................................................ 3
External strategy and market environments .......................................................................................... 3
PESTLE ................................................................................................................................................. 3
Political............................................................................................................................................ 3
Economic......................................................................................................................................... 3
Social ............................................................................................................................................... 4
Technology...................................................................................................................................... 4
Legal ................................................................................................................................................ 4
Environmental................................................................................................................................. 5
Walmart’s Competitors Analysis......................................................................................................... 5
Walmart 5P’s Analysis......................................................................................................................... 6
The five forces of Porter. .................................................................................................................... 6
Competitive Market rivalry ............................................................................................................. 7
Suppliers’ bargaining power: low - moderate ................................................................................ 7
Buyers’ bargaining power: low ....................................................................................................... 7
Substitutes ...................................................................................................................................... 8
Walmart Key resources........................................................................................................................... 8
Recommendations .................................................................................................................................. 9
Bibliography ..........................................................................................................................................10
Strategic Management and Leadership LSBF 2019 Bovarin M. Boukedy
Introduction
Sam Walton is Walmart's promotor. Launched fifty-seven years ago in a state of Arkansas in
America, Walmart is the world's leading international store, the world's biggest private-owned
company, and the world's largest employer, with approximately 2.2 million workers in the world.
Walmart started in the wholesale, retail store in 1998. It has about 11,000 supermarkets concentrated
primarily in the USA, South America, Canada, Asia, Africa, and India. And there are 4043 Walmart
stores plus 620 Sam's Club outlets and 6194 stores located in different countries around the world.
Walmart's main competitors are Tesco PLC, Carrefour S.A., Metro AG, Walgreen Co., Target Company.
2018 a success with $318 billion, which represents 3.5 percent of revenue achieved just below a
cluster of the European supermarket (Carrefour, Leclerc, Casino, Auchan, Systeme U, and
Intermarche). Sam's Club division hit $59 billion (+ 3.2 percent). Walmart's revenues were $118 billion
(1.7%). For the United States, Walmart expects to increase its revenue by 2 percent in 2019.
PESTLE
Political
To operate in international, Walmart has to follow the political environment of countries
where Walmart wants to work. Diverse political systems and distinct models of government determine
the global market. In Asia, for example, the economy is overgrowing, with about 20 retail units in India,
and about 439 in the big market like China, Walmart is struggling to meet the global trend. The number
of stores in China and India demonstrates how the political environment of these countries is affecting
Walmart. The Asian political situation is a significant obstacle to the growth of Walmart.
The complicated administrative set-up and red tape in India, for example, are boundaries for
international investment and international companies. Differences in the political and cultural climate
in China generate uncertainties for external investors. In China, workers of foreign companies are at
risk of personal injury or kidnapping, while companies are at risk of extortion. Another type of political
risk exists in China, which is the severe struggle between the central country's authority and provincial
and local administrations over appropriate regulation and its observance or non-observance. It makes
it hard for companies operating in China, like Walmart, to learn what the rules are.
In other countries, the political environment depends on the political stability of countries
where the company operates. A stable political environment drive to a stable business environment
and business can proliferate, and the reverse case (for example, the risk of military invasion by hostile
country) drives to the regular disruptions to sales and supply chain. In South Africa, for example,
Walmart has already been exposed to a gender discrimination complaint. Such may impact the brand
and may have a significant impact on profitability or chance to survive.
Economic
Even during a downturn that drove to the recession, Walmart economically was stable. The
company's economic climate is excellent, which means Walmart can focus on improving its goods and
offer customers the highest service quality. Except for the internal economic situation, the company
Strategic Management and Leadership LSBF 2019 Bovarin M. Boukedy
also analyses the financial status of the country in which Walmart wants to operate this
help for decision making. The interest rate variation is a crucial factor and can have a positive or
negative effect on Walmart. The higher the interest rates, the more significant investment, which
might imply more profits for Walmart. Financial market efficiency indicates how well Walmart can
raise capital at a fair price. Having in mind demand and supply, the country's exchange rate in which
Walmart operates affect Walmart's competitiveness in international trade. The currency's stability is
also critical, and an unstable currency discourages foreign investors. For instance, China has
manipulated its currency holdings at an artificially low level. Manipulating currency can hurt the
economy positively or negatively. If it is small or high and can have an impact on the company
operating in China, high lay-off in the country means a higher supply of jobs than demand, saying that
people want to work for lower wages, adding to the expense of Walmart.
Social
The social factors can have a considerable impact on the profitability of the multi-national
business. The social forces that impact Walmart reflect the society where they are operating. Social
trends influence customer behavior means to change the profitability of Walmart or competitors. In
developed countries, Digital technology encouraged online shopping and impact profitability. The
company must take into account demography, religion, ethnic and language groups, cultural values,
and dimensions. Walmart does not allow the sale of certain items that may cause eruptions of protests
from various social groups. Although some businesses have issues with them, Walmart has an
excellent relationship with diverse sectors of society. Walmart is also involved in social events that
lead to improving a better relationship between them, the consumers, and the community in which
Walmart Operates.
Population dynamics, such as age and gender, may or may not affect certain goods. Class
distinctions may help promote the premium product to the general public, educational history
disparity between advertisers, and target market may be challenging to target consumer preferences
and goals. Walmart has to take into account the level of health standards, harassment behavior,
which is not the same in different countries.
Technology
The technological aspect is greatly influencing different companies, and Walmart is also
following the trend. Automation and digital technology are reshaping the way Walmart does business
(robots and automated units) case of store maintenance, online orders, and so one are opportunities
that increase employee performances. Devices such as mobiles, tablets, and laptops help to develop
e-commerce to attract more people or clients using websites. Walmart Introduced new ideas for its
industry, such as advanced cash registers and slot machines that perform better. Walmart uses a more
reliable system of protection. As technology moves quickly, Walmart continues to modernize to the
latest innovation and keep tracking the evolution of technology. If other corporations are utilizing new
technologies innovations to deliver services, Walmart can also adopt these innovations. This
technology helps Walmart to reduce labor costs, reconciliation, supervision, and data entry, improve
margin, and competitive advantage.
Legal
Walmart obeys a country's diverse regulations in which they do their business. The group
avoids menacing the safety of its customers and the image of its brand by violating local and
international legislation. The company must take into consideration various types of laws, such as
discrimination. Laws that protect employees and ensure all Walmart employees are treated equally
Strategic Management and Leadership LSBF 2019 Bovarin M. Boukedy
and have the same chances of success (men and women, young and old, employees' religion or sexual
orientation, disability, ethnicity, and so on). Proper social responsibility regulation engagement to
ensure employees' health and security are taking consideration by Walmart, provide quality standard
and reasonable price certain products to keep consumers safe. Walmart has to be compliant with
countries' laws; not being compliance may affect Walmart's brand and reputation and also negative
impact on finances.
The history related to Walmart's legal shown that the most significant number of lawsuits
Walmart has encountered involves the workforce; various legal problems have remained to cause the
situation complicated for Walmart, from discrimination to low wages.
Environmental
Walmart ensures that all their products are safe and protect the environment. Walmart has
developed specific regulations Emphasis on waste treatment, consumption of energy, and packaging.
Walmart's goal is to achieve zero-waste and improved packaging. In the US, 81 percent of stores and
club divert materials from solid waste. The diversion rate in Japan and the United Kingdom is about
90%, 70% in Walmart, Canada, and Mexico. Walmart is an environmental concern. Walmart has
launched improved waste management schemes aimed at reducing toxins and supplying the future
with a cleaner environment. Walmart built a robust waste system to avoid employee errors.
Amazon is the most significant competitor in Walmart's list of rivals. Amazon has risen from
an independent internet bookseller to one of the most successful and substantial organizations
worldwide over the past two decades by innovating the approach to retail goods utilizing the internet.
Amazon plans to move into the physical store after succeeding in the online world because massive
revenue for its competitors comes from offline sells. Amazon has combined new technology and is
offering a run to traditional retail stores such as Walmart and pushing them to make the technical
change. Amazon's distribution expansion has some attractive plans for the future, and Walmart
should be concerned about Amazon because it is one of the best Walmart rivals.
Alibaba is the most significant online and mobile business worldwide. Alibaba operates e-
Commerce marketplace sites that facilitate online shopping and selling by people and companies. The
group is not involved in direct sales, negotiating with retailers, or holding stocks, Alibaba classifies its
activities into the subsequent business sections: China Finance, International Trade, Cloud Computing,
and Internet Infrastructure, and Others. Alibaba makes revenue principally from online marketing
platforms wherever vendors pay marketing fees to obtain user traffic, e-commerce payments on
Alipay completed transactions and membership charges.
Tesco is a crucial international rival for Walmart behind Carrefour, and one of the European
supermarkets which entrance into Europe has altered the landscape of local retailers. Tesco's first
prestige is to buy American rivals area stores and supermarkets, and then to invest in new
hypermarkets by Greenfield. Government rules for its extension did not present significant issues.
Tesco is a British supermarket considered to have achieved a substantial share in the international and
domestic markets. Tesco is, behind Walmart and Carrefour, the third-largest retail group. Tesco, like
many other supermarket organizations, requires consumers to patronize their goods. To achieve
customer loyalty, the company provides a loyalty card. Tesco also began to focus on the housing
market relative to Walmart, but it wasn't as good as late.
Strategic Management and Leadership LSBF 2019 Bovarin M. Boukedy
Costco is a worldwide retail organization located in the United States. It runs facilities focused
on membership in the United States, Canada, and many other countries. Costco's organization model
is different from the Walmart business model. In recent years, both the number of Costco customers
and its sales have increased dramatically. Built on its consistently low costs for its customers and
excellent customer service, the company gained a very high level of popularity and brand equity. The
company was able to manage its business efficiently through a large warehouse chain. It sells goods
to its clients at consistently lower prices than anywhere else. Nonetheless, there is a very high degree
of rivalry in the supermarket industry. Including Walmart, there are even more rivals competing with
Costco for market share. The organization also utilizes its platforms for e-commerce to reach its
clients. The purpose of this approach is to improve the revenues of its products at the individual level.
For its low prices and excellent consumer service, Costco is known primarily. Now, the number of
warehouses and e-commerce transactions is growing.
Product: The first product of Walmart is its supermarket business, including retail e-commerce
service. The commodity aspect draws consumers by delivering affordable, sufficient, and efficient
services, taking into account the central role of retail services in Walmart's sector. The product
strategy thereby largely determines customer experience and satisfaction in the businesses of
Walmart in this business aspect.
Price: Walmart employs a low-pricing strategy daily as a component in the business model of
sales. The purpose of this pricing approach is to drag large numbers of shoppers to achieve high sales
volume and thus a profitable business. Everyday low price, market-oriented pricing strategy, and flat
rate delivery pricing strategy are part of the Walmart pricing strategies.
Place: for this feature, Walmart uses an intense delivery strategy. In the approach, Walmart's
shops and e-commerce platforms usually offer the same wide range of products and services, and in
their activities, both stores have similar functions. This aspect of Walmart's approach aims to attract
consumers by making shopping easier in terms of strategic store locations and fast online services
connectivity.
Promotion: Walmart makes its marketing using ads, sales campaigns, individual transactions,
and public relations. Walmart uses magazines, TV, and websites for advertising its products. On the
other hand, the objective behind the sales campaigns is to draw additional customers to Walmart
outlets and platforms in the form of exclusive deals and discounts. The business introduces personal
purchases in its shops in this feature, where sales staff convince customers to try new products or
package deals. When it comes to public relations, the company uses editorials and charitable services
to inform customers and creditors of plans, projects, and campaigns, among other activities.
People: Workers are Walmart's primary assets and spend time and money tremendously in
the growth and care of its workers. Walmart hires 1 percent of the US working population.
In comparison, the quality and accessibility of shopping are two critical factors that restrict
the negotiating power of shoppers to a significant extent. To purchasers, costs for changing are not
Strategic Management and Leadership LSBF 2019 Bovarin M. Boukedy
relevant, with the corresponding lower prices and buying satisfaction with the other labels they can
get with Walmart. Walmart's lowest pricing plan limits consumers ' negotiating power. Therefore,
there is a negligible impact on the brand from individual consumers. On the other side, buyer
protection associations can influence the mark. In general, shoppers ' bargaining power is an
insufficient factor for Walmart.
Substitutes
Substitutes constitute a significant threat, and they have a powerful impact on the business
because they can consider the customers of the subsidiary where they work. The substitutes could be
via the internet (online store) or physical retailers. This type of business is growing exponentially and
adjusting organizational approaches continuously. Across various locations, the organization and its
different departments concentrate on the alternatives and change their strategies, respectively. They
do this by providing better services than substitutes and using better technologies than substitutes or
other companies.
In regards to organizational structure, each worker has a direct supervisor, except the CEO.
All instructions and requirements come from the company's top executives by intermediate
management and go through the Walmart stores ' rank and file workers. Walmart structured several
departments into a group of employees who participate in specific functions like human resource
administration, communication technology division, and marketing team. Corporate managers ' job
is to control the company as a whole. If the new policies and strategies developed in headquarters
are immediately transferred into regional managers down to the stores, in this way, effective
monitoring and control are achieving through Walmart's hierarchical functional organizational
structure. Below is the Walmart organizational structure:
Above-Store Managers: they are in charge of accounts, statistics, and supply by overlooking the
reports.
1- General Managers
2- Co-Manager (in large stores)
3- Assistant Manager
4- Management Trainee
In-Store Hourly Workers: they work most of the time on the floor.
1- Support Manager
2- Customer Service Supervisors and Merchandise Supervisors
3- Cashiers, Stockers, and Sales Associates.
Recommendations
Improve supply chain to fixe issues on time, improve the delivery process so the client can
get the product on time. Monitor the supply chain, a correct a deficit, and add additional features if
needed. Walmart should put in place the system able to easily manage big data, which is helpful to
logistic. The use of Digital 4.0 also can have a significant impact on labor cost reduction and product
delivery process improvement and logistic. Walmart has to invest in e-commerce to become more
competitive as Amazon and eBay and survey to improve website services. Walmart has to put in place
a strategy that adapts with Asian and Africa government's laws and regulations. China and India are
huge markets regarding the size population of both countries. If Walmart can put in place the strategy
that can fit Asian control, the company can gradually maximize its revenue.
Strategic Management and Leadership LSBF 2019 Bovarin M. Boukedy
Conclusion
Strategic management is an ongoing process that involves determining the success or failure
of a business in the long term. Companies with vast internal resources and external environmental
components expect to increase efficiency and be sustainable in a long time. All organization is required
to perform a robust environment review and adequate internal and external processes to execute the
plan efficiently. To stay ahead of its rivals, to reciprocate the corporate approach, and to accomplish
its key objectives, Walmart is heading towards a new enterprise with readiness and dexterity to be a
reference corporation in the future.
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