Dynamic Strategy and Disruptive Innovation: A Case Study of Walmart

This presentation provides a comprehensive analysis of Walmart's dynamic strategy and disruptive innovation. It covers the company's organizational structure, value system, SWOT analysis, PESTEL analysis, marketing strategies, and recommendations for future growth. The presentation also includes a brief introduction to Walmart and its international operations.

DYNAMIC STRATEGY
AND DISRUPTIVE
INNOVATION
Walmart

INTRODUCTION
Chosen company- Walmart
Founded inn the year- 1962
Founder- Sam Wilton
It is the largest retail company in world
The company operates retail stores in
many formats all over the world
International operations of Walmart is
in Canada, Argentina, Brazil, China, UK
etc.
It employs around 2.1 million people of
US
Tier, Mark. How to Spot the Next Starbucks, Whole Foods, Walmart, or McDonald's BEFORE Its Shares
Explode. St. Martin's Press, 2017.

INTERNAL PERSPECTIVE
A) ORGANISATIONAL
STRUCTURE

INTERNAL PERSPECTIVE
B) VALUE SYSTEM
A) 3 basic beliefs and values
• Respect for the individual
• Striving for Excellence
• Service to our customers
B) Sundown Rule
• Answering suppliers, employees and customer queries on the same day
C) Open door policy
• The doors of the managers are open to all the employees at all the levels
D) Grass Root process
• Capturing the ideas and suggestions made from the parts of sales floor and the front
lines.
Carolan, Michael J. "Food systems." Companion to Environmental Studies. Vol. 192. No. 198.
ROUTLEDGE in association with GSE Research, 2018. 192-198.

INTERNAL PERSPECTIVE
C) SWOT ANALYSIS
Strengths Weaknesses
1. High level of efficiency of the supply
chain due to advanced technologies
2. Global supply chain provides
Walmart a business resilience from
the market specific risks
3. Global organisational size of Walmart
gives it deep pockets for funding
expansion and growth.
1. A business model that could be
easily copied.
2. Very thin profit margins is a very
typical effect of making use of cost
leadership strategy.
3. It does not have enough competitive
differentiators, excluding its business
size.
Carolan, Michael J. "Food systems." Companion to Environmental Studies. Vol. 192. No. 198.
ROUTLEDGE in association with GSE Research, 2018. 192-198.

SWOT ANALYSIS
Opportunities Threats
1. Expansion in the developing nations
depending on their high growth
economic condition
2. Improvement in the human resource
practices
3. Improvement in the quality standards
1. Aggressive competition
2. Healthy lifestyle trend is a threat for
the company as many of its goods
are not healthy, natural and organic
3. Small-scale online selling as dues to
internet, the individuals could bypass
the company and make use of its
websites for selling its products to
the online customers
Chatterjee, Sayan. "Two efficiency-driven networks on a collision course: ALDI’s innovative grocery
business model vs Walmart." Strategy & Leadership 45.5 (2017): 18-25.

RECOMMENDATIONS
A) Walmart needs to prioritise making use of its strengths for
exploiting the opportunities in the international retail market.
B) The threats and weaknesses of the company should be made the
secondary priority.
C) It needs to improve its standards of HR management and
product quality for improving its firm performance
D) It should expand its business for exploiting the economic
opportunities in the development markets.

EXTERNAL PERSPECTIVE
A) PESTEL ANALYSIS
Political Economic Social
1. Moderate political risk
2. The Australian
government wants to
strengthen its
relationships with the
USA
3. Hike in VAT
4. There is 5% lower
income tax in Australia
than its neighbouring
countries
1. High rate of
unemployment (24.6%)
2. Global economic crisis
3. Spending down of
retail
4. Entrenched market and
prevalence of few
global players
1. Price sensitive
business and customer
market
2. Fastest population
growth
3. Increasing travel
lifestyle
4. Continuous customer
demographics
Lukic, Radojko. "Analysis of energy costs in retail trade." Management Research and Practice 8.4
(2016): 5.

PESTEL ANALYSIS
Technology Legal Environmental
1. The use of Electronic
Funds Transfer Systems,
electronic scanners have
influenced and improved
the efficiency of stocking
activities and distribution
activities
1. Selling below the cost
is forbidden
2. Strict competition
3. Anti-trust laws
1. Shortage of
infrastructure capacity
2. Recycling
3. Issue of contamination
Shin, Seungjae, and Burak Eksioglu. "An empirical study of RFID productivity in the US retail supply
chain." International Journal of Production Economics 163 (2015): 89-96.

EXTERNAL PERSPECTIVE
B) FIVE FORCES ANALYSIS
Bargaining Power of the
customers
Bargaining power of the
suppliers
Barriers to entry
1. Low
2. Customers make small
purchases
3. The main customers of
the company are the
individuals
1. Low switching costs
from supplier to
supplier
2. The products of
Walmart have a lot of
substitutes
3. Purchases high
qualities of products
from the suppliers
1. Medium-high
2. Very high capital
requirements
3. Low switching cost
among the companies
4. Consumers look for the
products that are with
low prices and have
high quality
5. Needs precise system
of distribution
Zhou, Maggie. "Alibaba's window on world now challenging Amazon..." Asia Today International 33.5

CONTINUATION…..
Power of substitutes Rivalry
1. High
2. Low switching costs of consumer
3. Performance of the substitute
products are similar
4. The quality of the products and their
prices are competitive
1. High
2. Competitors have same sizes
3. Slow industry growth
4. High exit barriers
5. The main competitors are K-Mart,
Dollar General, Target and Lowe’s
Food.

RECOMMENDATIONS
A) It should continue to use the low cost strategy
B) It should maintain its organisational culture and
practises
C) The company should focus on its product expansion
strategy and also, for international expansion it should
research the market well and must focus on the areas
where it could do the best. It should close down its
operations in the countries where it is not performing well
D) It should consider customers from all market segments
while making marketing and pricing strategies.

MARKETING PERSPECTIVE
Customers
• “Customers would be provided what they want, when they want it, all at a
value.”
Team Spirit
• “ Treating each other as we would hope to be treated acknowledging our total
dependency on our associate- partners to sustain our success”

MARKETING STRATEGIES OF
WALMART
A) Walmart tailor their store experience and
merchandise assortment for meeting the
specific needs of broader customer base.
B) At present, Walmart has created more than
120,000 new employment opportunities for
the people and is operating in more than 3000
global stores while buying its products from
seventy different nations.
Xu, Jun, Xiangzhu Gao, and John Hammond. "E-tailing in Australia: A preliminary analysis of David
Jones." International Technology Management Review 6.4 (2017): 149.

TECHNOLOGY PERSPECTIVE

RECOMMENDATIONS
A) The company needs to acquire an AI company
B) It should actively invest in the application
development and the R&D for enhancing the
shopping experience and for defending its market
share. It would net the company 18.5 billion dollars
in the additional profits by the year 2022.

REFERENCES
Tier, Mark. How to Spot the Next Starbucks, Whole Foods, Walmart, or McDonald's BEFORE Its
Shares Explode. St. Martin's Press, 2017.
Carolan, Michael J. "Food systems." Companion to Environmental Studies. Vol. 192. No. 198.
ROUTLEDGE in association with GSE Research, 2018. 192-198.
Chatterjee, Sayan. "Two efficiency-driven networks on a collision course: ALDI’s innovative
grocery business model vs Walmart." Strategy & Leadership 45.5 (2017): 18-25.
Lukic, Radojko. "Analysis of energy costs in retail trade." Management Research and
Practice 8.4 (2016): 5.
Shin, Seungjae, and Burak Eksioglu. "An empirical study of RFID productivity in the US retail
supply chain." International Journal of Production Economics 163 (2015): 89-96.
Zhou, Maggie. "Alibaba's window on world now challenging Amazon..." Asia Today
International 33.5 (2015): 41.
Xu, Jun, Xiangzhu Gao, and John Hammond. "E-tailing in Australia: A preliminary analysis of
David Jones." International Technology Management Review 6.4 (2017): 149.

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