Evaluation of Walmart in Africa Case Study

This case study evaluates the internal environment of Walmart Inc. in relation to its operations, with a focus on its strategies in Africa. It analyzes the company's internal structure, resources, culture, employees, strengths, and weaknesses.

Running head: EVALUATION OF WALMART IN AFRICA CASE STUDY 1
Evaluation of Walmart in Africa Case Study
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Introduction
The Purpose
The paper will address the internal environment of Walmart Inc. in relation to its operations. The
major part is concerned with Walmart Inc. in the African continent and the several strategies it
employed to thrive on the global market. The internal analysis, however, will include the
company internal structure, resources, culture, employees and its strengths and weaknesses.
Key Definition
According to the business definition, internal environment refers to the company environmental
surrounding conditions, factors, events and entities within its structure that influences its daily
operations. The influence is on employee behavior throughout their duties and operations in the
organization. This also incorporates the company’s leadership styles, mission statement, and its
operational organizational culture.
History of Walmart Company
Walmart Inc. is a leading American based retail multinational firm that mainly operates in
different stock operations including hypermarkets among others. The firm was established by
Sam Walton in the year 1962 who initially owned some large retail business including Ben
Franklin. The expiry of the lease triggered him to begin his own Dime and Walton Five that later
resulted in the emerging of Walmart Company. The company has gained international
experiences through its subsidiaries and joint venture operations in several countries such as
Argentina, Mexico, China, and Canada among others.

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The company provides quality services to consumers which have attracted many potential
customers through its customer-centered strategy. Walmart Inc. The company faces competition
from various other global companies such as Amazon, Lowe’s Home Depot, eBay, Alibaba,
Costco among other well-established firms. In most cases, the company has fully utilized its
supply chain management strategy to override other competitors on the market structure with
several sustainable competitive advantages which include but not limited to lower costs of
production, in-store variety selection, and improvement, inventory carrying cost reduction as
well as consumer high competitive pricing.
Internal Environment Analysis
Internal factors are major contributors of organizational moves both as the response to the
external environment and its self-sustainability. The factors, however, include the company
mission statement, leadership, communication strategies, organizational culture and structure,
and employees.
Walmart Mission Statement: “To save people money so that they can live better”.
The mission statements reveal the ideals of the founder of the company who was Sam Walton.
Looking at this statement keenly one will realize the company is majorly a customer-centered
platform which encourages their less expenditure with surety of good living. For example, in the
case study of Walmart in Africa, despite the numerous challenges the company faced to
penetrate the global market, it still emerged a winner at the end through its suitable strategic
measures according to Bezuidenhout, & Kleynhans, (2015). The dwindled opportunities on the
local market due to the 2018 crisis made possible for the company to sail through the global
African market. There were several external factors which seemed challenging to the company

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including poor economic conditions and political instabilities among African countries. The
company only focused on delivering quality services and products to customers through its
ideological needs to enhance its performance.
The company Internal Environment
Reputation with customers
The company has maintained its good rapport with customers through the provision of its goods
and services at lower prices. This has left customers more satisfied as they are in a better position
to save especially those in rural areas. The company has also become powerful by selling well-
known product brands to the market at affordable prices which is a superior value of attracting
and maintaining potential customers.
Organizational capabilities
The remote frequency devices are well linked with consumer preferences providing the company
with first-hand information about their preference. The technology enables tracking products
sold from the store for effective accountability. The presence of an electronic data interchange
device has improved transaction efficiency between the company and customers that majorly
help in tracking business-related transactions within the firm.

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SWOT Analysis
Strengths
Good leadership structure
The organization is led by Doug McMillon who is the CEO of the company. The good leadership
style embraced in the firm has greatly improved its production services. The mixture of both
top-bottom and down-top strategies are used in the management of the organization. In most
cases, this has encouraged innovations among other organizational employees to foster
organizational production. The company encourages the sharing of ideas by the junior employees
to their seniors on their ideas so as to get support on their noble ideas. Through this leadership
and management strategy, the company has realized improved technological and production
aspects that have improved its production levels (Aitchison, 2016). The company leadership is
also effective in handling organizational issues in a prompter way such as making informed
decisions, solving conflicts so as to achieve its main goals and objectives at the end of the day.
Competent employees
The sufficient training facilities offered by the company has played a key role in ensuring
employees are ready for their daily duties. This has however enhanced their performance through
improved knowledge and skills (Steenkamp, 2017). This has enabled the company to utilize the
available technological machinery in production to favorably compete with other firms on both
the local and global market (Leuprecht, & Sokolsky, 2015). The good technology operations
have played a bigger role in its expansion to the African continent despite the alarming
challenges.

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The presence of private satellites, logistics, and trucks in the organization has facilitated its
efficient operations.
Controlled and systematic management with employees and suppliers has played an essential
role in ensuring business continuum.
Weaknesses
Low penetration due to poor big-box retailing format: The factor hindered the company
penetration to urban areas limiting its operations.
Abuse of employees and suppliers: the company through its chain is known to abuse suppliers
and employees through forced financial examination. This, however, lowers their morale
resulting in a significant output in production. The other aspect is the lack of employee welfare
which has led to their dissatisfaction.
The organization is linked to thousands of people losing their jobs indirectly.
Ignorance on price increase which has in some case led to shut-down of suppliers or even being
forced into mergers to facilitate production transfer.
Opportunities
The company is willing to provide training facilities to employees to ensure they are conversant
with different production aspects to curb the cost control.
Threats
Unreliable employees: this is due to poor treatment by the company lowering their levels of
morale and hence negatively affecting production.

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Walmart Sources of Revenue
The company has ever since funded its project with huge amounts of revenue realized. There are
several sources of revenue for the company which include;
Net sales: the company recognizes the net sales, revenue generated from sales, sales returns and
also taxes during selling to merchandise customers (Mazouni, 2018). Other sales are made
through e-commerce which includes but not limited to shipping revenue that is recorded during
delivery to customers.
Membership fee: the company recognizes its membership fee from both globally and the United
States over membership terms which are believed to be around 12 months. The fee is estimated
to be about $1.4 billion each year from 2017.
Gift Cards
The purchase of gift cards by customers isn’t termed as sales but the independent source of
revenue. This holds until the gift card is redeemed for merchandise purchases. In most states, the
card does not bear an expiration date and this gives customers redemption of the card
indefinitely. However, in some countries where Walmart operate they carry an expiry date and so
it should be redeemed within 12 months.
Financial Services
The organization also generates revenue from transaction services it performs.

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For instance, the company’s financial capabilities have facilitated its projects for better
operations. Its financial stability has enabled the company to outcompete other organizations on
the current market through improved production. According to statistical analysis, the company
generated a total of $500.34 billion from global sales in the year 2018 (Caraway, 2016). The
revenue generated has enabled the company to stays in a stable economic condition and
conducive environment worth production.
Sustainability in Strategy Implementation
The sustainability vision of Walmart Company suppliers and employees was laid out by Scott. In
his speech he called for waste reduction with more utilization of renewable sources of energy.
Furthermore, Scott advocated for selling products that are sustainable to people and the
environment (Elder, & Dauvergne, 2015). Whenever sustainability rises, the cost goes down.
Core and non-core business
The core business activities are the ones considered to be the main income generations in a
business while the non-core business activities are incidental activities that are not considered
central business operations. The main core business of Walmart Company is provision of retail
goods and services to customers such as financial services, retail goods, wireless services and
also pharmacy.
Global Strategy for Walmart
The successful operations of Walmart organization in the United States mainly relied upon
Multidomestic strategy. Since the adoption of the global strategy without proper development in

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the economies of scale in countries such as Korea and Germany led to its downfall. In the United
Kingdom, the transnational strategy worked so well but has since failed in other countries.
Strategies for diversified Companies
A diversified business company refers to a firm that constitutes multiple business that are
unrelated that require management with higher expertise. Perhaps many companies come
together so as to attract a large pool of customers for their products.
Strategies used
 Adoption of improved technologies to enhance performance
 Expansion of economies of scale to maximize on profits
 Effective management and leadership to ensure competency among workers
 Diversified employees to promote equity in the organization
Action Plan for Business integration
Business Integration refers to the absorption of Information Technology into business operations.
Technology plays an important role in ensuring business success (Thompson, et al. 2015). The
following are essential in creation of an integration plan.
 Review of the current business performance in relation to the market demand
 Benchmarking from other competitors
 Review of the intermediary and influencer
 Review of the SLEPT element

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 Selecting goals and objectives of the company and also developing of the performance
tracking platform.
Strategies
o Selection of a suitable integration system
o Defining an integration system with available traditional channels
o Reviewing the existing marketing mix
Action to be taken
o Recruitment of competent IT personnel
o Creation of a plan that is suitable to customers
o Creation of campaign and content plans
Review of Walmart presents Situation
The company is a powerful retailer both globally and locally around the United States. Despite
its superiority, the company does not maintain its positive image to the public and the suppliers
according to intensive research carried out (Frynas, & Mellahi, 2015). This, in other words, may
end up affecting their performances. In most cases, during success analysis, people may tend to
remember the negative elements more than positives of the company.
Recommendations
Walmart needs to create a positive image so as to avoid being blamed by suppliers who have all
lost their jobs. The company should try their level best to curb the situation such as through

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engaging suppliers based on the price increase of the stock. Furthermore, the company can also
engage in societal charitable work to give back to society. The aspect of developing a kitty to aid
the jobless could also bring a positive impact to society. The implementations of such
suggestions could greatly improve the performance of the firm as compared to the current
situation.

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References
Aitchison, M. (2016). Walmart and the Architecture of Logistics Jesse LeCavalier. In The
Architecture of Industry (pp. 107-128). Routledge.
Bezuidenhout, H., & Kleynhans, E. (2015). Implications of foreign direct investment for national
sovereignty: The Wal-Mart/Massmart merger as an illustration. South African Journal of
International Affairs, 22(1), 93-110.
Caraway, B. (2016). OUR Walmart: A case study of connective action. Information,
Communication & Society, 19(7), 907-920.
Elder, S. D., & Dauvergne, P. (2015). Farming for Walmart: the politics of corporate control and
responsibility in the global South. The Journal of Peasant Studies, 42(5), 1029-1046.
Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press,
USA.
Galpin, T., Whitttington, J. L., & Bell, G. (2015). Is your sustainability strategy sustainable?
Creating a culture of sustainability. Corporate Governance, 15(1), 1-17.
Leuprecht, C., & Sokolsky, J. J. (2015). Defense Policy “Walmart Style” Canadian Lessons in
“not-so-grand” Grand Strategy. Armed Forces & Society, 41(3), 541-562.
Mazouni, M. (2018). The Effect of Global Investment Decisions and Financial Risk on
Multinational Corporations: Walmart Corporation Case Study. Available at SSRN
3257136.

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Steenkamp, J. B. (2017). Global brand strategy: World-wise marketing in the age of branding.
Springer.
Thompson, A., Strickland, A. J., & Gamble, J. (2015). Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.\
https://bookshelf.vitalsource.com/#/books/9781285687452