Business Strategy Report: Walmart's UAE Entry and Strategic Analysis

This report, prepared for a corporate strategy consulting project, examines Walmart's potential entry into the United Arab Emirates (UAE). The analysis begins with an assessment of the macro-environment using PESTLE analysis to identify key political, economic, social, technological, legal, and environmental factors influencing Walmart's strategic decisions in the UAE. The report then delves into Walmart's internal environment and capabilities, utilizing frameworks such as McKinsey's 7S model, Value Chain Analysis, and VRIO/VRIN to assess strengths and weaknesses. Furthermore, the report applies Porter's Five Forces model to evaluate the competitive forces within the UAE market, subsequently devising strategies to enhance Walmart's competitive edge and market position. Finally, the report proposes a strategic management plan, incorporating concepts like Porter's generic strategies, Ansoff's matrix, and Bowman's strategy clock, to establish tangible strategic priorities and objectives, and to produce strategic directions and tactical actions for Walmart's successful entry into the UAE market.

Achievement Feedback Summary
Assessor’s Name
Prof. Zawahir
Siddique
Pass Merit Distinction Grades Awarded
LO1 Analyze the impact and influence which the
macro environment has on an organization and its
business strategies.
LO1, 2, 3 & 4
D1 Critique and
interpret information
and data applying
environmental and
competitive analysis
to produce a set of
valid strategic
directions, objectives
and tactical actions.
P1 Applying appropriate
frameworks analyse the
impact and influence of
the macro environment
on a given organisation
and its strategies.
M1 Critically analyse
the macro
environment to
determine and inform
strategic management
decisions.
LO2 Assess an organization’s internal
environment and capabilities.
P2 Analyse the internal
environment and
capabilities of a given
organisation using
appropriate frameworks.
M2 Critically evaluate
the internal
environment to assess
strengths and
weaknesses of an
organisation’s internal
capabilities, structure
and skill set.
LO3 Evaluate and apply the outcomes of an
analysis using Porter’s Five Forces model to a
given market sector.
P3 Applying Porter’s
Five Forces model
evaluate the competitive
forces of a given market
sector for an
organisation.
M3 Devise appropriate
strategies to improve
competitive edge and
market position based
on the outcomes.
P3 Achieved
M3 Not Achieved
LO4 Apply models, theories and concepts to assist
with the understanding and interpretation of
strategic directions available to an organization.

P4 Applying a range of
theories, concepts and
models, interpret and
devise strategic
planning for a given
organisation.
M4 Produce a strategic
management plan that
has tangible and
tactical strategic
priorities and
objectives.
P4 Achieved
M4 Not Achieved
Overall Feedback Summary
Over All Grade REDO Date
[To Achieve a PASS, all P
grade descriptors should
be achieved; To achieve
a MERIT, all P and M
grade descriptors should
be achieved; To achieve
a DISTINCTION, all P, M
and D grade descriptors
should be achieved.]
Summative Feedback
Overall feedback on
current work with
emphasis on how the
student can improve and
achieve higher grades in
future.
Kindly go through the
comments and make
the needed changes.
Please ensure that your
answers are more
comprehensive in
nature to improve your
work.

Business Strategy: Project Task
Project title BUSINESS STRATEGY
LO1: Analyze the impact and influence
which the macro environment has on an
organization and its business strategies.
LO2: Assess an organization’s internal
environment and capabilities.
LO3: Evaluate and apply the outcomes of an
analysis using Porter’s Five Forces model to
a given market sector.
LO4: Apply models, theories and concepts to
assist with the understanding and
interpretation of strategic directions available
to an organization.
Scenario:
You are hired as a Corporate Strategy
Consultant by Walmart [American
Multinational Retailing Corporation] to plan
its entry strategy in United Arab Emirates
[UAE]. You have been assigned to prepare a
report that includes the environmental
analysis and strategic growth management
plan based on the use of recognized internal
and external analytical tools.
Note: Please ensure that the specific
requirements of the M and D grade
descriptors are addressed for achieving
higher grades. Remember that each of the M
and D grade descriptors requirements have
to be addressed within each of the
corresponding P criteria(s) itself while
answering any specific question(s) given
below. DO NOT try and answer the M and D
grade descriptors separately as a separate
task.

The report should include the following:
1. Critically analyze the impact and influence
of macro environment in UAE on the
strategic management decisions to be
made by Walmart applying appropriate
frameworks like SWOT Analysis, PESTLE
and Stakeholder Matrix.
2. Analyze the internal environment and
strategic capabilities of Walmart using
McKinsey’s 7S Model, Value Chain
Analysis and VRIO/VRIN frameworks.
3. Critically evaluate the internal environment
to assess the organization’s internal
structure, capabilities and skill set.
4. Evaluate the competitive forces in UAE
applying Porter’s Five Forces Model for
Walmart. Devise appropriate strategies to
improve competitive edge and market
position based on the outcomes of Porter’s
Five Forces analysis.
5. Interpret and devise a strategic
management plan for Walmart applying a
range of theories, concepts and models
like Porter’s generic strategies, Ansoff’s
matrix and Bowman’s strategy clock.
6. In the proposed plan discuss the tangible
and tactical priorities and objectives, and
thereafter critically analyse and interpret
the relevant information to produce
strategic directions, objectives and tactical
action which Walmart can adopt.
The submission on the LMS is in the form of an
individual written report. This should be written in
a concise, formal business style using single
spacing and font size 12. You are required to
make use of headings, paragraphs and
subsections as appropriate, and all work must be
supported with research and referenced using
the Harvard referencing system. Please also
provide a bibliography using the Harvard
Referencing System. The recommended word

limit is 4000–5000 words, although you will not
be penalized for exceeding the total word limit.
ANSWERS
INTRODUCTION
Business strategy is also known as business management. It is a science, craft and art
of formulating, implementing and evaluating decisions of all functional areas which enable a
company for achieving its goals and objectives within a time period. It integrates and
coordinates all activities of different functional areas of business for achieving long term
goals and objectives of a company. WALMART Inc. is a multinational retail corporation of
America which operates a chain of grocery stores, hypermarkets and discount department
stores. This organisation is having the highest revenue approx. US$480 Billion. It is the most
profitable and largest grocery retailer of the US. WALMART invests outside North America
their outcomes are mixed: it operates in china where having a positive results and United
Kingdom and South America are having a negative results. In this report, discussion will be
carried out on the impact on macro environment and its strategies as well as on porter’s five
forces of model. along with they will analysing internal environment and capabilities using a
framework appropriately.
TASK 1
P1 Impact of macro environment on WALMART and its strategies
PESTLE analysis stands for political,environmental, social, technological, legal and
economical. PESTLE is a macro environmental analysis. Company used this external
strategies to analyse their position at market as well as their competitors planing to gain high
market share. Which help to provide necessary information and data's in order to achieve
competitive advantage at market share. It is a framework which are used by marketing
manager of an organisation to observe the impact of external factor on business's activities.
This external strategy are focus on strategic need of social culture, economic and ecological
concern. WALMART has used this strategies for effectively work at UAE. Elements of
PESTLE analysis are discussed below:
 Political factor: UAE have seven emirates Abu Dhabi, Fujairah, Ras al-Khaimah,
Ajman, Umm al-Qaiwain and Sharjah. On the other hand one of the biggest problems
which associated with United Arab Emirates are, they have political conflict with
their nearby countries about ownership of land and oil reserve thus create negative
impact like sales, profits etc. on WALMART. UAE have healthy trade relationship
with others countries, so that WALMART used this advantage and run their whole
business operation in an effective manner.
 Economical factor: Form last few years oil prices are decline, so its create negative
impact on UAE economical environment. They reach 2.3% of GDP in 2016.
Environmental situations are different in each one of Emirates so that all seven
Emirates have their own GDP. But the Abu Dhabi GDP is 60% all country growth.
They dominated by economical strength and hydrocarbon production capabilities.
WALMART run their business's activities at Abu Dhabi which provide high
profitability and market share. Economical growth of UAE is 2.5% expected in 2017,
so that company also can not gain growth as compare to last year. Contribution of
service sector in GDP are 45.8% so that WALMART have an opportunity to run their
business in an efficient manner. Economical freedom have very high in UAE their
position in world are 8th. So that company enjoy these freedom which help to grow
rapidly. This country has highest amount of foreign direct investment in their region.

 Social factor: UAE people lifestyle is very comfortable as compare to other countries
because of well paying jobs. WALMART pay high salary to their workers in UAE as
compare to other countries stores employee. Globalisation is gradually resulting in
mix of various culture with in Emirates. Company receive advantage of economic
process. Company face the problem related to religions. Example special clothing
system for every women.
 Legal factor: All the seven emirates have their own administration and governed by
Emir. Each one of Emir manages has Emirates resources autonomously. Supreme
council is a highest authority of the UAE. They hold executive and legislative power.
WALMART gain advantages of stability in the government body, thus help to
develop long term plan and implemented them in a effective manner. All seven
Emirates themselves have governance body which help to manage flexibility of
country.
 Technological factors: In present times, its variables are much important than ever. In
context of UAE population of middle-aged and wealth their should cause a issue of
technology. Their are some factors which effect united Arab Emirates are Young
population are relatively very informed about modern technology which allow
WALMART all over UAE to purchase technology.
 Environmental factor: These factors are left till last. Their are some UAE
environmental factors are this country is having a dry climate, hot which outcomes in
many various things. For example, lower productivity, farming is not easy and selling
of air conditioner as well and it also finds near a few areas of coastal, allow for trade
by sea easily.
WALMART are having many stakeholder who either having indirect or direct
connections with organisation. It is a new functions designing of an company which can
impact the results it can be external as well as internal. Some of popular examples are
shareholders, government, employees etc. Stakeholder matrix are divided into four parts
which are exampled in detail below:
 High power, high interest: In UAE stakeholder have rights to take decisions
regarding WALMART as they are having capabilities to decide future of firm as
well as they can take part in all activities of industry. UAE governments are also
having higher power and their interest within a organisation are also high. As they
have to keep satisfied to their share holders, directors etc. Some of examples are
majority shareholders, directors of company, UAE government etc.
 High power, low interest: In this stakeholders are having higher power but they don't
take much interest in the business activities of WALMART in UAE. They send their
annual reports each year and issues if any they are discussed and make their
stakeholder satisfy so that they be with WALMART. Silent partners, some members
in boards of directors are some of its examples.
 Low power, low interest: Stakeholders are not having much powers as they do not
care much about companies performance. These kinds of stakeholders are not having
rights for making or changing in the decisions taken by higher authorities like top
level management. Shareholders who are not considering much shares are a perfect
example.
 Low power, high interest: In this stakeholders are having very low powers but their
interest in the business activities are high. According to UAE they should keep
informing about companies decisions to their employees which are not having much
power but they are having interest and their efficiency at a high level within a
WALMART. Employees are some of its example.

TASK 2
P2 Internal environment factors and capabilities of a business by using proper structure
Decision making process and strategies of an organisation are directly influenced by internal
environment factors. Companies are analysing these factors for implementing their plan and
policies at work place in an effective manner. McKinsey 7S framework introduced by Tom
Peters and Robert Waterman in the year 1980. This framework analysis internal environment
factors and their impact on an organisation work. 7S frameworks consist seven internal
environment characteristic of company, that need to be aligned, if it is to be successful. 7S
frameworks has work in a variety of situations. Where organization perceptive is useful like
improve overall firm performance, future requirements of changes within a company,
institute plane and process during acquisition and mergers, implementing planned strategies
with in a work place etc. McKinsey 7S framework involve 7S or seven mutualist factors
which are divided into two categories hard and soft.
(Source: McKinsey 7S framework, 2014)
Hard element: These factor directly identified by an organisation's management, they
organise, controlling and directing these factor with in working place. These are generally IT
systems, strategy planning, organisation structure charts and conventional work process.
 Strategy: Company make strategies to gain competitive advantage at market place as
well as increase overall profitability. Organisation's management has taken decision
according to their needs and wants which provide benefits in future. WALMART
makes strategies accordingly to current situation and firms needs and wants.
 Structure: Organisation structure consists hierarchy of employees as well as
management. These all influence company's management decision and strategies.
WALMART make appropriate internal organisation structure for give authority as
well as responsibility of every employee’s and management with in a work place. In
this structure on the top CEO and MD has came and in next step deputy CEO has
placed. These both work as a top management for WALMART. Then in next level all
department managers have came and then after all employee’s as well as team leaders
are set in an organisation structured.
(Source: Organisation structure, 2015)
 System: This element shows, daily activities and procedure of employees to
completing their task effectively. Organisation's management has make blueprint of
work process, so employees are competing their task accordingly. WALMART has
strong work system with in firm, so their employees are competing their work on
time.
Soft element: Soft elements difficult as compare to hard elements. They intangible in
nature and mostly influence by organisation's cultures. These elements are more important as
compare to hard elements because they create more impact on employee’s performance and
productivity as well as overall firm profitability.
 Shared value: When organisation's management has developed new strategy at work
place, they consider core value of corporate culture and business plan. Company has
communicate values with their employees, so they provide help for achieving these
core values in a given time frame. WALMART has share company's values with their
employees, so they follow these value at work place. They also share their value with
their other stores as well as with their competitors to gain positive impact on
consumers mind.

 Skills: Firms are analysing their employee’s actual skills, knowledge and
competencies for competing their job effectively. WALMART is conducting training
and development program on continuous basis for enhancing employee’s professional
skills and knowledge which provides high productivity and quality of product and
services.
 Style: An organisation's management has adopted appropriate leadership style
according to firm’s current needs and wants. WALMART has use effective leadership
style in their organisation for gain positive outcomes.
 Staff: Company hires talented workers and identify their capabilities to assign task.
WALMART analysing their worker’s capabilities i.e. adaptability, learn ability etc.
for enhancing their performance. WALMART recruit talented employee’s and
increase their work productivity in order to sustain at market long period of time.
Value Chain Analysis:
Value mean, the total amount (profits or revenue of an organisation) thus customers are ready
to pay for the product and services at market place. Value chain mean, creation of value by
several activities, that include primary activities and supportive activities. Value chain
analysis is introduce by Michael Porter in the year 1985, thus include various activities like
design, produce, market, delivery and support sales of product & services.
Through this analysis, firm understanding how company has create value and finding new
ways to add more value in existing product and services to gain competitive advantage at
market place. Value chain has divided into three categories i.e. manufacturing, services and
both manufacturing as well as services. WALMART has work in services sector, so they
follow services based value chain analyses.
Element of Porters value chain analyses:
Primary activities:
 Inbound logistics: In this process firm are receiving, storing and distributing inputs
with in work place, so they establish good relationship with their suppliers which are
the key factor for creating value. WALMART storing, distributing and receiving their
materials in a very effective manner.
 Operations: Operations mean, transformation of several activities into value.
WALMAERT has establish systematic operation at their work place for completing
task in a given time frame.
 Outbound logistics: WALMART is a retail store chain, so they deliver their services
at store. They collecting product from suppliers and store them. Company has use
effective distribution system for deliver their product and services to their customers.
 Marketing and sales: Through marketing activities, firm are creating awareness
about their product and services among the consumers in order to increase their sales.
In this activity WALMART has differentiate their product with their competitors.
 Service: Company manage core values of the product and services among customers.
For example; WALMART provide after sales services to their clients. So they
enhancing their customer's services in a effectively manner in a given time frame
Supportive activities:
 Infrastructure: WALMART has maintaining their daily operations and support
system. Legal, accounting, management and administration are the example of firm
infrastructure.
 Technology development: WALMART managing and processing their internal as
well as external information with in work place. Company has use advanced
technology as compare to competitors for gain competitive advantage at market
place (Cascio, 2018).

 Human resources management: This process show, how firm are effectively
recruits, select, motivate, reward, trains and retain its employees at work place.
WALMART use human resource management tool for motivating their employee’s
as well as provide training & development program to enhancing workers’
productivity.
 Procurement: An organisation has find potential suppliers and vendors for
purchasing required resources. WALMART has purchased their required resources
by big vendors and suppliers. They bargaining with their suppliers as well.
VRIO framework: This framework are help to an organisation for analysing their
internal resources and capabilities in order to gain sustainability at market place. VRIO
frameworks has introduce by Jay B Barney. WALMART use this strategy for gain sustained
competitive advantage as compare to their competitors. In this frameworks include four
factors, those are as follows:
(Source: VIRO analysis, 2017 )
 Value: Resource has always scare , that is not unlimited. So every resources has a
certain value, so company has analysis their each resource value, and compare it with
others. WALMART are analysing their resources value on continuous basis so they
save resources.
 Rarity: Rarity mean company use resources those are not easily available at market
place, that create differentiation between their own product and competitors product.
WALMART use rarity in their service quality and product availability, so they gain
competitive advantage at market place. WALMART are using resources in a very
effective manner so they save rare resources and raw materials.
 Imitability: Firm resources and capabilities can be imitated by competitors which
lead to deficiency of originality of their services and products. WALMART use rare
resources those cannot be imitated by other companies and create competitive
advantage at market place. Example: WALMART POP system was rare, company has
continuously expend and sustain sales so that their should be no fear of direct
substitute and they have shorter value chain etc.
 Organisation: Firms are organising their resources and employees within a work
place. For this, they have use management control system, compensation policies and
company's reporting system or structure (Spender, 2014). WALMART organises their
activities in an effective manner in order to achieve long term profitability and
sustainability within specific time frames.
TASK 3
P3 Explain Porter’s Five Forces model for evaluating competitive forces of WALMART at
market place
WALMART has a biggest retail company in a world. Most of external factor in a industry
has create pressure on them, that must be address by firm. So WALMART has analysing
their external factors by using Porter's five force model. This model has applicable, when
firm is thinking to expand their market and analysing existing competitors and supplies
powers. WALMART need to develop plan and strategies to address bargaining power of
suppliers and buyers and withstand threats of existing substitute and new entrances at market
place. This model has analyse reveals that the institute are must keep evaluating to assure
long term sustainability and viability at market place.
WALMART has focused on their competitors and new entrance by analysing external
environment of retail industries. Porters five forces model element are as follows:
(Source: Porter's five forces model, 2013)
Rivalry among existing competitors: An organisation has analyse their competitors
strength and weaknesses in order to gain high market share. WALMART has use aggressive

strategies to remain competitive at market place. Company is currently market leader, so they
must keep their growth position. WALMART has analyse following external factor with
regard to competition:
 Large number of competitors at retail market place (Parnell and et. al., 2012).
 Variety of firm are available in retail sector.
 High aggressiveness of retail company.
 Quality differentiation by WALMART as compare to several other retail firm at
market place.
 Customers loyalty toward companies product and services.
 Competitor are create high switching cost for retain their consumers.
Bargaining power of buyer: Buyers have bargaining power because they have
several option at market place to full fill their needs and wants in a very effective manner.
Large number of customers has make difficulties for WALMART to impose some pressure
on their competitors or other retail firms. Some factors of bargaining power of buyers are as
follows:
1. Large number of customers or buyers at retail market.
2. Very high diversity of customers. They have several option for full fill their needs
and wants.
3. Small size of purchase. Individual customers have needed less number of product for
their personal use.
 Buyer compare product price and abilities with other companies
Buyers are always price sensitive in their nature.
 They are analysing product differentiation with comparison of several competitors.
 Consumers has ability to substitute their product with another product (Scholes,
2015).
Bargaining power of suppliers: Suppliers has their own bargaining powers. But in
retail industry suppliers has weak bargaining power because several vendor are ready to sell
their product to large firm. WALMART has large firm, so their order size is very big as
compare to small firm, resulted vendors has low bargaining powers because many suppliers
are available at market place (Higgins, Omer and Phillips, 2015). Some important factor of
bargaining power of supplier are as follows:
 High number of suppliers may available in retail sector.
 Due to large vendors competition are very tough.
 Full availability of suppliers in a retain industry, so WALMART cannot make more
afford to Find out appropriate vendors.
 Both size small as well as lager suppliers are available easily in retail market.
 Big vendor has capabilities to substitute product and services at market place.
 Sometimes suppliers create high switching cost for retail company, so firms easily
cannot switch their supply.
Threat of substitutes of product and services: In a retail industry several substitute
are available for consumers. WALMART offer various product and services to their
customers. They also offer some goods and services those are less substitute option at market
place. Some factors of substitute are as follow:
 WALMART has less number of product and services those have substitute at market
place.
 WALMART has create high switching cost for their customers.
 Convenience availability of substitute at retail market.

Threat of new entrance: WALMART is a market leader in retail industry. So they
less threat of new entrance in their sector. Small firm has gain profits on the basis of
locations, convenience, speciailty and any other factor (Johnson, 2016). Some important new
entrance threat are as follows:
 Small firm has invest low cost in their business so they cannot achieve economic of
scale, WALMART has achieved economic of scale and they provide low cost product
to their customers.
 Average capital cost.
 Cost of brand development.
WALMART core Competences, resources and capabilities : WALMART is a market
leader. They have several core competences and strategic capabilities for gain high market
share which provide sustainability to firm in a long period on time. Many tangible and
intangible product are used by company those create product differentiation. They have some
core competences at retail industry to run their all business activities and operations in a very
effectively manner.
Core competences and strategic capabilities:
 Culture: WALMART has healthy culture environment with in an work place.
 Good relationship with their suppliers: WALMART has establish healthy relationship
with their vendors to gain timely delivery of product and services.
 International growth: WALMART has expand their business's activities and operation
at international level.
 Market leader: WALMART has market leader in retail industries, so they enjoy high
market share and long term sustainability.
 High product quality differentiation: WALMART make high quality product and
services for their customers to provide satisfaction and positive brand image in their
clients mind.
 Low cost operation: Company use systematic operation process for save cost and
increase productivity.
Form the above discussion its should be concluded that WALMART used
promotional strategy to build strong brand image in customer's mind which improve their
market position. For this they use social media platform, internal, billboards, newspaper, TV
advertisements and many more.
Resources:
 Tangible resources- WALMART use building, furniture, surrounding store fronts
etc., most of the real estate components are tangible for the company. Some
infrastructures are owned by company and some are on lease. Company has expand
their market share at global level, so they find out new location, market and other
requirements. WALMART is a retail store, so they have display all product in front
of consumers.
 Intangible resources- Customers experience has intangible in nature. WALMART
has create positive environment for their clients like low sound, , fresh air etc.
(Verbeke, 2013).
Skills:
Planning: Planning is very effective tool for an organisation in order to gain high market
share. Whatever plans are made within an organisation gives proper efficiency to employees.
Physical organisation: Product are position in a proper way, it looks attractive to people.
Physical evidence is so attractive and efficient in WALMART.