BUS690: Strategic Management

Section: 02

Summer - 2021

Assignment on Strategies That Can Be Used by

“Walton Group”

Submitted To:
Dr. Zulkarin Jahangir
Assistant Professor
North South University.

Submitted By:
Nasifur Rahman Sharif
1915043660
In my first assignment, I have done project on Walton Group’s existing strategy. But in this
assignment, I have suggested new strategies that can be implemented by Walton Group. From
my Strategic Management course knowledge and online data research, I have developed some
unique strategy for Walton Group to implement in their organization. Also, I’ve justified my
strategies, why they are feasible for Walton Group to implement in future.

Introduction:

Walton Group is one of the renown largest group of companies in Bangladesh. In 1977, Walton
Group was founded by S. M. Nurul Alam Rezvi. Walton Group has diversified their businesses
and product lines into different segments like automobiles, electronics, steel etc. Walton’s major
SBU include Walton Hi-Tech Industries, Walton Motors, Walton Mobile and Walton
Electronics. Walton Group holds the reputation of the first Bangladeshi mobile brand
manufacturer in the local market.

As a local brand, Walton Group’s products became one of the reliable items among the
customers of Bangladesh. With product development and customer satisfaction, Walton Group is
growing and getting success in the Bangladeshi market. Walton products stand out in the market
with their unique price leadership strategy. With the existing reputation in the local market,
Walton Group is planning to expand their territory into the international markets like India,
Nepal, South Korea and UAE.

Strategies that can be used by:

Limit Pricing Strategy:

Limit pricing strategy is a pricing strategy, when a company is selling their product or services at
a lower price which makes unprofitable for other new businesses to enter into the market.
Usually this strategy is used by monopolists or big companies to discourage new players to enter
into the market. By using limit pricing strategy, company may make less profit in the short term,
but it will make the company to retain monopoly position in the long run.
As Walton Group is one of the largest conglomerates in Bangladesh, they can easily adopt this
strategy to discourage other new players to enter into the market. Also, it will be difficult for
other existing competitors to sustain into the market, when Walton Group is offering goods at
lower price than the usual market price. Which may also force the competitors to go out of
business. To consider sustainability of Walton Group, they have other concerns where they can
make profit. Walton Group can easily adopt limit pricing strategy for some of their concerns to
get a monopoly advantage into the county.

Fig 1: Graph of limit pricing strategy adopted by Walton Group.

Additionally, Walton Group’s limit pricing strategy will give them substantial economic of scale
in the market, which will be a great advantage for Walton Group in the future.
Unrelated Diversification via Acquisition:

Unrelated diversification implies when a business enters into a new business, which is not related
to the core business function of the company. Unrelated diversified business has more than one
business units and operates in different industries under one umbrella. There are so many reasons
companies consider diversification. Diversification strategy mitigate risk for the companies who
are operating in only one industry. Unrelated diversification gives company advantages like
larger return in capital, reduce risk in investment, diversified business portfolio and improved
performance in different industries.

On the other hand, acquisition strategy involves acquiring new business entity which will
generate value for the acquirer. This is basically when a company uses capital resources to
acquire or get another company under their own strategic business unit (SBU).

In Bangladesh, Walton Group have many different business segments, diversified and
undiversified both. Walton Group can easily enter into undiversified business segment by
acquiring other companies. For example, Walton Group can enter into FMCG industry by
acquiring mid-level company from this industry. This will be less costly for Walton Group to
acquire a new business segment, as well as it will minimize the risk of acquiring and enter into
new market.

Strategic Alliances as Entry Mode:

Strategic alliance strategy is an agreement between two companies to take part in a mutual
beneficial project or agreement, where both of the company will still remain independent. The
strategic alliance agreement is less complicated than joint venture, where two companies
resources make a separate new business entity. Most company enter into strategic alliance to
spread their business into new market or to improve their existing product line. In strategic
alliance, two business work towards a common goal to gain benefits for both of them. This
agreement can be long term or short term both.

To minimize cost from Walton Group’s end, Walton Group can go into a strategic alliance with
the neighboring countries like India and Nepal. They can establish a new company with their
strategic alliance agreement, which will help Walton Group to grow into the international market
as well as help those local companies to do business more efficiently. Not only the strategic
alliance will reduce the cost for Walton Group, but it will also mitigate the risk to enter and
doing business into the new market with minimal resources. To implement this strategy, Walton
Group needs to be aware of their partner selection, alliance structure and how they will manage
the alliance agreement between companies. This can be a unique is strategy from Walton Group
to enter into the international market.

Knowledge Transfer Market Development Efficiency

Expand into new
New product development Logistic efficiency
market
In-source innovation Geographic extension Cost reduction
Access of expertise Brand building Risk mitigation

By implementing strategic alliance strategy, Walton Group will acquire the above mentioned
benefits as advantage.

Conclusion:

Walton Group is one of the largest conglomerate s in Bangladesh and it is increasing day by day.
With proper strategy implementation, they can lead the international market as well. Also, there
is a huge opportunity to diversify their businesses into new segments where they haven't worked
before. With above mentioned strategies, there is a possibility that Walton Group can become a
leading Bangladeshi multinational company in future.
References:

1. https://www.scribd.com/doc/53522384/Marketing-Analysis-of-Walton
2. https://www.slideshare.net/KaziZubair1/marketing-analysis-of-walton
3. https://www.termpaperwarehouse.com/essay-on/Marketing-Strategy-Of-Walton/327004
4. http://www.assignmentpoint.com/business/marketing-business/walton-presentation.html
5. https://www.scribd.com/doc/246228979/Walton-Marketing-Plan
6. http://www.assignmentpoint.com/business/marketing-business/presentation-on-walton-
bangladesh.html
7. https://www.slideshare.net/rafsanxani/marketing-plan-of-walton-mobile