Wal-Mart Stores: Company Background, Market and Submarkets, PESTLE Analysis, SWOT Analysis, and Strategic Implementation

This study material from Desklib provides a comprehensive overview of Wal-Mart Stores, including its company background, market and submarkets, PESTLE analysis, SWOT analysis, and strategic implementation. Learn about the largest retailer in the world and its operations in more than 90 countries.

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Background of Company and Industry
Wal-Mart Stores is an eminent American retail organization operating with a multinational
structure of operations. The operations of Wal-Mart Stores are diversified among the three kinds
of stores, namely hypermarkets, discounted department stores along with a chain of grocery
stores. Sam Walton established the organization is the year 1962. Currently, the organization has
about 11368 stores operating in more than 27 nations. This is the largest organization in the
whole world in terms of revenue, which is more than USD $500 billion per annum, as
highlighted in the 2018 list of Fortune Global 500 companies. The organizations also hold the
reputation of being the most profitable retailer as well as successful employer in the whole US.
More than 60% of revenue generated by Wal-Mart Stores comes from their US operations
(Laudon & Laudon, 2016).
The current business objective as well as the mission statement of the organization is
same: Save people money so that they are able to live better. The huge success of the
organization is achieved on the basis of some generic policies and foundations,. All these
policies have been successfully integrated in to the organizational culture of Walmart. Some of
these highly popular policies incorporate:
 Open Door Policy: The doors of the managers are always accessible by the employees f
all hierarchical standards.
 Sundown Rule: The employees should be answering the entire customer or supplier
related queries on the day itself, when the questions have been raised.

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 The grass root process: Wal-Mart always tries to capture suggestions as well as ideas
depicted on the sales floor including the front lines and tends to implement them (Carroll,
Primo & Richter, 2016).
 Basic Beliefs as well as Values: respect for individual stakeholders, prompt service to all
customers as well as striving for excellence regarding all the cornerstones in business.
 The 10 foot rule: Making eye contact, offering help to the customers as well as greeting
people (Nygaard et al. 2017).
Lastly, it should also be highlighted that that the organization also follows the principle of
servant leadership. the phenomenal success of the organization also allowed the company to
increase their starting rate for all the hourly associates in the US to $11, expand their maternity,
as well as provide parental leave benefits along with one time cash bonus that is generally
applicable for the associates of up to $1000.
Market and submarkets of Wal-mart
As in the year 2019, Walmart has bene occupying 11300 store locations. The majority of
the stores of Walmart are being operated under the brand name of Wal-Mart, which incorporates
a large format of Walmart supercenters as well as small format neighborhood markets of
Walmart. However, there are other stores under the organization that are operated under the
domestic as well as international subsidiary companies of the organization. One the primary
submarkets of the company are Sam’s west Inc. In the financial year 2019, the organization
reported a total sales volume of about USD $58 billion dollars. Sam’s Club has been projected
more like a local subsidiary of the organization (Arora et al. 2016). There are about 599 Sam’s

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Club in 44 of the US states. It is also operational in the countries like Mexico, Brazil and China
as well as ecommerce websites in the US as well as Mexico.
A net sale of $57.84 has been reported from Sam’s Club. Other than promotional
products as well as specific local expectations, Sam’s Club has also been profiting from two
price levels of $45 and $100. Another market of Walmart has been constituted by Walmart de
México y Centroamérica. They are the largest retailers in the entire Latin American circuit with
more than 2400 stores as of the year 2019.
In the US as well as the international business circuit, the company comes across heavy
competition from several competitors, which belong to the front line row of the industry. The
first and the most potential competitor of Wal-Mart is Amazon. There are several retail business
channels which are diversified and incorporate a large number of demographic bases. The
organization has a sales value of $136 billion as of the year 2017. Keeping product as well as
pricing, reasonable as well as appropriately matched with the target audience, the organization is
becoming one of the biggest online retail bases all around the world. In terms of online presence
as well as retail marketplace, Alibaba is one of the biggest market competitors of Walmart. The
strategic importance of Alibaba as a market competitor is very big. This is because; the market of
USA is very wide and fragmented. There is high level of market saturation so far as retail
business expansion is concerned. Hence, in this context, it can be argued that Walmart will
definitely try to enter as well as occupy significant market shares of large Asian economies like
China as well as India (Power & Mitra, 2016). However, Alibaba has already attained a market
cap of $265 billion as of the financial year 2017 and the sales value have been $21.5 billion, on
an average per annum, for the last 5 to 10 financial years (Power & Mitra, 2016). Hence, it is
evident that the market presence of the organization is very high and as an outcome, it would be

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difficult for Wal-Mart to ensure market occupation in the major Asian market. Another
organization that would be giving neck to neck competition to Walmart in the home as well as
foreign markets is IKEA. IKEA has more than 350 stores in over 50 countries majority of which
are situated in Europe (Kshetri, 2018). In this regard, it deserves mention that one of the major
target markets of IKEA as well as Wal-Mart is that of Europe.
PESTLE Analysis
Political
Walmart is desperate to operate successfully in the international domain. However, international
business landscape is featured by various political structures as well as different governance
models. The government in all countries is not receptive towards international trade. For
evidence, the Asian economic, where, Walmart ones a considerable market share, has not been
receptive towards the major US based organisations in retail, so far. For evidence Walmart has
been able to open only 20 subsidy digital units in India as well as 439 units in China, that also in
collaboration (Kshetri, 2018). The rate of growth of the business in USA, compared to what has
been in Asia and other important business segments like Europe, is much higher with the
difference of about 34%. In meaning Asian countries, Complex regulatory setup as well as Red
Tape are major obstacles to foreign investment as well as growth of foreign business.
Economic
During the rate Global economic recession, customers were compared to reduce costs which
affect the revenue as well as growth rate along with instantaneous profit of the organisation.
Also, they have been mass revival of this economic upheaval, the retail spending has not been
back on track on an equal rate.

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However, it is good to see that per hour earning of people has increased and there has been a
stability in the labour market. This emphasizes that in the coming five years the responsible
income of the middle and lower middle earning groups of people will increase and stabilize. As
an outcome, it can be commented that the profitability of the retail organisations are going to
enhance in the coming years. However, researchers like Ma and Osiyevskyy (2017), identify that
the feasible market conditions for enhancement of buyer power in the upcoming years will also
probe new and upcoming retail brands in both physical and online retail domains. This
emphasizes that they would be hard competition for the big and global retail brands like
Walmart, with the new, entrepreneurial and innovative retail brands coming up to occupy
segments of market share of Walmart in USA as well as abroad.
Social
Social forces are essential factors considering the influence on profitability in case of
international business. In the last decade, there has been used changes in customer demographics.
There is great propensity among the millennial generation for shopping online. Enhanced use of
modern digital Technologies as well as enhanced use of Smartphones has encouraged the trend
of online shopping format to a great extent. Describe its rate for the physical detail Agencies like
Walmart that has not able to increase their online presence Global wave. Apart from using
Technology, the customer service of Walmart customer convenience, common social media
presence as well as customer engagement also important friends where the organisation is
lacking in competition with the eminent online eCommerce agents like eBay, Amazon, Alibaba
and so on (Huchzermeier, 2016).
Technological factors

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Technological factors essential for growth of retail businesses, in this century. Aligning
customers with the products, needs strong marketing and emphasis on online domains. Besides,
importance of HR technology in maintaining use workforce in the brick and mortar stores as well
as the online domain has also occupied essential role. Whether it is needed for the supply chain
for the physical stores themselves, Walmart is investing in technological advancement so that
they can help the customer to find the most appropriate products for their and enhance their
experience of the customers. The organisation is investing especially in the domain of
Information Technology as well as development ofof artificial intelligence. This two factors
come very essential for success in retail organisations.
Environmental
Sustainability is important for all businesses. Evening the retail sector, carbon footprints, waste
management for my energy consumption as well as packaging waste disposal along with other
factors have a great variance on environmental factors. Apart from such areas, Walmart is also
emphasising on Sourcing down their supply chain, responsibility. Non zero waste as well as
better packaging, using eco friendly materials. In the US, 81% of the materials used by the
organisation for packaging and other users in their stores, clubs as well as distribution centres are
sourced from raw materials that have been diverted from landfills (Vracheva, Judge & Madden,
2016).
Legal factors
Several laws effects legal upheavals of the retail brands. They needed to maintain compliance
with organisational culture. Non compliance to this loss can result in the outcome like poor
reputation along with financial losses. Maximum Encounters which law that organisation has

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faced, have been in relation with labour force. Several Human Rights organisations have come
up with allegations regarding running sweat shops in the less developed countries. In the recent
years, organisations like Walmart is emphasizing on developing the working conditions for staff
across the globe, with enhancement of compensation rate (Lasserre, 2017). However, bye now
the organization has resulted in several legal challenges and financial losses going to provision of
substantial fines to several decorators who alleged the organization of over exposing employees
and exploiting them.
SWOT analysis of Wal-Mart
One of the biggest strengthorganisation is that we have the reputation of being the largest retailer
in this world. Which more than 2.3 million staff, the organisation has their operations spread
over more than 90 countries. In terms of retail companies, the organisation has been ahead of the
rest for top rated retail Agencies since the financial year 2013. In the latest financial year, the
organization has recorded for 500.34 billion US dollars revenue which is far ahead of the next
highest revenue collector Amazon which stands at 170 7.86 billion US dollars (Lasserre, 2017).
Maintaining brilliant Economics of scale, the organisation can share their fixed costs over several
products which makes Walmart one of the cheapest shopping destinations for customers across
the globe. The organisation also excels in efficient using of resources live distribution facilities,
information system other skills and capabilities, more efficiently over several locations.
Because of experimenting with less trends, organisation has been able to ensure success of their
new Store format without losing substantial amount of revenue or profit.
Weaknesses

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The challenges in context to weaknesses of the organisation are related with the generic business
strategy implemented by the organisation regarding Business Development, resource
development, ensuring profit margin as well as capability development. Implementation of the
cost leadership generic strategy, the organization has been drawing the following weaknesses
towards them. The first factor is thin profit margin because of which organisation has to exercise
a lot of market operations in order to generate maximum profit. There also emphasizing on easily
copied business model because of which organization can lose out business.
The high andspeciality sellers are giving high level of competition to agents like Walmart.
Opportunity
Expansion in the developing countries is one big opportunity that lays before organisation since
we have very list operations in Europe and Asia which are two very less saturated markets with
immense potential. Improvement in the human resources is needed for development of
competitiveness in the labour market and the organisation has lead on a strict HR policy which
will bring about improvement in the human resources in due time. Improvement in quality
standards can also help the organisation to develop (Carroll, Primo & Richter, 2016)..
Threats
Aggressive competition is one factor that is a treat for Walmart. Online retailers of different sizes
are generating market shares in their favour because of which the demographic segmentation in
favour of Walmart are reducing.
Strategic implementation of Walmart

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Starting from 2020, Walmart need to implement new training program for their employees. They
need proper scheduling so that the work pressure can be smooth as well as diversified. In this
regard Walmart can exercise the development of new training manuals, classroom training
process better and more advanced workshops along with job exercises that will help in
improvement of employee morale, in hands customer service increase productivity, reduce the
turnover rate of employees along with providing all Employees with valuable skills that will be
applicable for the future career of the employees (Nygaard et al. 2017).
It is expected that in the future 5 years, the implementation of this strategy will be necessary for
the improvement of business and will also be accountable for the saving of several millions of
dollars for the organisation.
The large turnover rate will need a loss compensation of $5000 per employee. However, after the
implementation of a discreet employee management strategy, the organisation will be able to
save adequately on individual employees' compensation. Nevertheless, it can be argued in this
context that the organisation need to implement a tighter strategy for their supply chain. They
need to diversify their supply line so that in future the product delivery cost and time can be both
reduced.
Summary
In summarisation, it can be reflected that is organisations of the world. However, in order to
implement their development strategy for their brick and mortar shops, the organisation is Losing
out on employee management, lacking technological development and thereby the need to come
up with new marketing techniques which can help them in acquiring market share in the new
World markets like Europe and Asia.

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Reference List
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Huchzermeier, A. (2016). How Walmart built sustainability into the supply chain. The Business
& Management Collection.
Kshetri, N. (2018). 1 Blockchain’s roles in meeting key supply chain management objectives.
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Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Laudon, K. C., & Laudon, J. P. (2016). Management information system. Pearson Education
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Ma, Q. A., & Osiyevskyy, O. (2017). Maximizing the strategic value of corporate reputation: A
business model perspective. Strategy & Leadership, 45(4), 24-32.
Nygaard, A., Biong, H., Silkoset, R., & Kidwell, R. E. (2017). Leading by example: Values-
based strategy to instill ethical conduct. Journal of Business Ethics, 145(1), 133-139.
Power, D. J., & Mitra, A. (2016). Reducing “Bad” Strategic Business Decisions. Drake
Management Review, 5(1/2), 15-21.

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Vracheva, V., Judge, W. Q., & Madden, T. (2016). Enterprise strategy concept, measurement,
and validation: Integrating stakeholder engagement into the firm's strategic architecture.
European Management Journal, 34(4), 374-385.