Capability Analysis of Walmart using VRIO Framework

Running head: MANAGEMENT
Management
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The importance of the effective management of the business operations is seen to
increase in a significant manner in the recent years and the enhanced intensity of the business
competition is considered to be one of the key factor responsible in influencing the senior
management of the organizations for incorporating scientific management inside their
organizations. Other than this, majority of the companies operating in retail industry are
facing the necessity of managing the existing business competition with the effective
management of their resources and under such situation, it becomes important for the
companies to make sure that they have a clear idea of their capability and the ability of their
resources in providing them the much required competitive advantage in their respective
industries (David & David, 2013). Hence it becomes crucial for the companies to conduct the
capability analysis and the tools such as the SWOT Analysis, VRIO Framework, Resource
Based View plays an important role in analysing the resources of the group in an effective
manner (D’Auria, 2014). The paper provides an in depth analysis of the resources of
Walmart, a market giant in the global retail industry. The paper follows the VRIO framework
for the capability analysis and includes a brief overview of the group and the business
operations of it as well.
Company Overview:
As mentioned earlier, Walmart is one of the largest organizations in the global retail
industry in terms of the market share and the revenue. The chosen organization was formerly
known as Wal –Mart Inc. and from the year 1970, it is known as Wal-Mart Stores, Inc
(Walmart.com, 2019). The group is a public limited group and was founded in the month of
July, 1962 in Rogers, Arkansas (Walmart.com, 2019). The founder of the organization was an
eminent American entrepreneur, Sam Walton. The organization is currently headquartered in
Bentoville, United States (Walmart.com, 2019). The group have a strong store presence
across the globe which enables the group in serving the clients across the world. The current

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managerial team of the group includes the chairman of the group, Greg Penner along with
President and Chief Executive Officer of the group, Doug McMillon (Walmart.com, 2019).
Other than this, the current owner of the group, Walton Family, is seen to contribute
in the financial sustainability of the group. In addition to this, the group is currently
experiencing the expertise of 2.2 million number of employees (Walmart.com, 2019). Apart
from this, the group is able to increase the efficiency of their business operations with the
formation of the divisions such as the Global eCommerce, Walmart International, Sam's Club
and Walmart U.S. Along with this, the group has the expertise in providing electronics,
clothing, footwear, toys, jewellery, health and safety equipment along with sporting goods
and accessories. In addition to this, the services such as the Walmart-2-Walmart, Walmart
Pay, Walmart.com and Walmart MoneyCard are also increasing the effectiveness of the
business operations of the group. Considering the financial statistics, the revenue of the group
in the year 2019 is 514.4 billion US dollars and along with that, the operating income of the
group in the same year is 21.96 billion US dollars (Walmart.com, 2019).
Internal Analysis:
The internal analysis of the group can be successfully conducted with the application
of various tools such as the SWOT, VRIO or RBV analysis. As the capability analysis of
Walmart is to be conducted on the basis of the VRIO framework, it becomes important to
understand the tool and the application of the tool in identifying the resources that have the
potential to provide the necessary competitive advantage to the chosen group. Considering
the VRIO framework, it is important for the managers of the group to identify the resources
that have the capability to satisfy all the criteria of the tool such as Valuable, Rare, Inimitable
and Organized to be recognised as capable of providing the competitive advantage to the
organizations (Simão & Diaz, 2013).