MG624: Strategic Marketing Report on Walmart's UK Market Strategy

This report provides a comprehensive strategic marketing analysis for Walmart's potential entry into the UK market. It begins with an executive summary and introduction, then delves into a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors influencing Walmart's operations. The report explores various market entry options, including mergers and acquisitions, strategic alliances, and foreign direct investment (FDI), evaluating their suitability for Walmart. It also addresses market segmentation, identifying potential target markets within the UK's retail industry. Furthermore, the report applies Porter's generic competitive strategies to determine how Walmart can gain a competitive edge in the UK retail landscape, concluding with a summary of findings and recommendations. The assignment covers the critical aspects of strategic marketing, providing a framework for Walmart's successful market entry and competitive positioning within the UK's retail sector.

Strategic Marketing
Table of Contents

EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
PESTLE Analysis........................................................................................................................4
Market Entry Options..................................................................................................................6
Market segmentation:..................................................................................................................8
Porter’s generic competitive strategies........................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

EXECUTIVE SUMMARY
This report evaluates the external factors present in the macro business environment that
could have an impact on the operations of a business organisation such as Walmart in UK. The
report identifies market entry methods Walmart should use and identifies their target market in
UK’s retail industries. The report also applies Porter’s Generic Strategies model to the operations
of Walmart to assess how it can gain a competitive edge in the UK’s retail markets.

INTRODUCTION
Strategic marketing is very necessary for an organisation, because this give opportunity
to that organisation for promoting its product and service at the large scale in the market.
Currently each business or company is investing very huge fund for making their marketing
functions more and more effective. There is strategies marketing factor is also a part of all
marketing functions. There are effective and productive strategies and tactics plays great roe in
any company’s marketing functions. That’s why currently top-level management within each
business focuses on developing some innovative marketing strategies to boost their products and
services in the market (Kim, 2018). This discusses strategic marketing aspect of the Walmart. It
is of most popular American retail companies in the world, headquartered in Arkansas, United
Status. Some major marketing solutions has been included in this report which will support to
Walmart for highly promoting its products and services when it will enter in new market
segment the United Kingdom.
MAIN BODY
PESTLE Analysis
The PESTLE analysis identifies various political, economic, social, technological, legal
and environmental factors in the external business environment that could have an impact on the
operations, productivity, performance and profitability of business organisation such as Walmart.
The PESTLE analysis for Walmart in the UK’s retail markets is provided below:
Political Factors: The current political instability in the UK termed as Brexit can have immense
impact on the operational performance, productivity, profitability and efficiency of Walmart
should they enter into UK’s retail markets. Though the exact details of the changes and updates
to laws, regulations and policies post Brexit still haven’t been made available to the public and
are highly debated by the various analysts and economists, Brexit can provide Walmart with
opportunities for increased productivity and profitability in UK’s retail markets as it would
inevitably scrap the complex and opaque international trading laws and regulations that are
currently in place with easy to understand, transparent regulations, aiding the import and export
operations of Walmart (Perera, 2017). Contrastingly, Brexit can also increase the taxation rates

that are levied on the goods and products imported, exported by Walmart for their operations
decreasing their overall productivity and profitability in the UK’s retail markets. As the details of
the changes post Brexit still are not clear to anybody, Walmart is advised to keep a thorough
track of the situation as the political factors can have massive impact on the productivity and
profitability of Walmart in the UK markets.
Economic Factors: There are also numerous economic factors that can have immense impact on
the operations, productivity and profitability of Walmart in the UK’s retail markets. The most
significant of these is the reduction to the corporate tax that was levied on the profits generated
by business organisations. From April 2020 onwards, the UK government has announced a
decrease in the corporate tax charged from 19% to 18% for all business organisations operating
in the UK’s consumer markets. This would effectively allow for greater profitability for Walmart
as less taxes now have to be paid to the relevant authorities, for the same amount of profits
generated, increasing their profitability in the UK markets.
Social Factors: The current social trend to arise out of the digital revolution in the 21st century is
that of online shopping, which has been effectively adopted by the consumers of retail industries
in the UK. As the internet has been widely adopted by a large section of the UK’s population,
increasing number of people now choose to exclusive do their shopping through the internet,
based on the convenience this approach provides. This trend can have immensely positive impact
on the operations and functions of Walmart, as if they operate their own online store, they will be
able to capture a very large share of market with competent services provided (Fozer and et.al.,
2017). As Walmart already operates its online store in the US, operating one in the UK should
not be excessively arduous a task for Walmart, doing so will effectively increase Walmart’s
productivity, profitability, market share and customer base in the UK’s retail markets.
Technological Factors: There are also present numerous technological factors that could
influence the productivity, efficiency, performance and profitability of Walmart in the UK’s
retail markets. These factors present Walmart with immense opportunities to grow and expand
their operations in the UK’s retail markets and increase their operational performance, efficiency
and productivity. The biggest technological factor that can have immense impact on the
operations and profitability of Walmart is that of self-checkout counters (Corban and et.al.,
2019). Implementing self-checkout counters in the physical retail stores of Walmart will

effectively allow it to decrease its operational staffing and wage costs by a huge margin as these
self-checkout counters are guided by Artificial Intelligence systems and can perform the
checkout tasks performed by employees with increased performance and efficiency. Though an
expensive investment, these self-checkout counters will increase the profitability, performance
and efficiency of Walmart tremendously in the long run.
Legal Factors: There are also various legal factors that can have an impact on the operational
performance, productivity and profitability of Walmart in UK’s retail markets. Any updates or
changes to UK’s legally mandated laws and regulations such as the minimum wage act, health
and safety at work act, labour laws etc., can become a threat to the operations of Walmart and
have a negative impact on the productivity, performance, efficiency and profitability of Walmart
in the retail markets (Rastogi and Trivedi, 2016). As Walmart would have no choice but to
comply with whatever changes the government makes to these legally mandated rules and
regulations, it poses as an immense threat to Walmart’s productivity, performance, efficiency
and profitability in the UK’s retail markets.
Environmental Factors: There are also present numerous environmental factors in the external
environment in which Walmart operates in, which can have immense impact on its productivity
and profitability in the UK’s retail markets. Changes to government mandated laws in relation to
the procurement of raw materials required by Walmart for their operations, which harm the
environment in one way or another can have a negative impact on Walmart’s profitability and
productivity in the UK’s retail markets. Further changes to fuel and energy prices all of which
impact the environment of the UK can also have negative impact on the operations of Walmart
are pose threat to its productivity, profitability in the UK’s retail markets.
Market Entry Options
There are various options available to Walmart towards their efforts to enter into new
markets in the UK. Most popular market entry options available to Walmart are as follows:
Merger and Acquisitions: Merger and acquisition are the strategic processes through which
Walmart can consolidate the operations of other business organisations operating in the UK’s
retail markets into their own. Merger is the voluntary consolidation of two business organisations
into a new business entity, which has a new ownership and operational management structure.

Mergers are friendly collaboration between to business and require no financial inputs, but tend
to dilute the power of each business’s ownership and employees. Acquisition is the strategic
process of taking over the operations of other businesses in the operating industries, often
involuntary and hostile in nature. Acquisitions require great amount of financial resources but
provide immense power to the buyer over the operations and functions of the acquired
businesses. Mergers and acquisitions allow for fast entry into the new markets which can be a
major advantage to businesses if they have the prior knowledge of the market, consumer to enter
successfully (Zou and Yu, 2020). If done successfully, mergers and acquisitions also provide
businesses with great benefits as they have the potential to drastically increase the productivity,
profitability and market share of a business organisation. Acquisitions can also be used to take
out competitor businesses from the operating industries. Contrastingly mergers and acquisitions
also have significant risks attached as businesses usually find it hard to acquire and merge
together with other business organisation who operate with a different structure, culture and
employee skills.
Strategic Alliances: Strategic Alliances are another method of market entry that Walmart can
make use of with the intention to enter the retail markets of UK. Strategic alliances are formed
between two business organisations with the intention to undertake together a project that can be
mutually beneficial for both the business organisations while they both retain their independence,
authority and power over their own businesses. Though often confused as the same, strategic
alliances are different from joint ventures as the two business organisations do not come together
to create a separate business entity, instead they only form a strategic alliance through mutual
agreements for a joint project. Strategic alliances allow a business to enter into a new market by
making use of the market knowledge of its partner in the strategic alliance. This method of
market entry is significantly flexible for business organisation and carries less risks when
compared to merging and acquiring another business, but also provides lesser increase in
productivity and profitability as all profits of the joint project have to be shared amongst both
partners.
Foreign Direct Investment (FDI): This is another popular method business organisation use to
enter into foreign markets with the intention to increase their productivity, profitability and
market share. Through Foreign Direct Invest, a business organisation such as Walmart can

purchase the facilities in the country whose markets it wants to enter into. This method involves
the transfer of various financial, human, technological resources from one country to another
(Huber, 2019). This method is chosen in countries where the government has restricted the
importing of goods and products, but allows for businesses to build a production site in the
foreign markets which allows businesses to produce goods locally but also has considerable risks
involved if thorough market analysis of foreign markets isn’t conducted.
As Walmart is such a profitable organisation, it can take relative risks in hopes of
generating great rewards. If Walmart conducts thorough market and competitor analysis of the
retail markets of UK, then it will be able to successfully acquire a business organisation that
operates in the retail markets of UK, effectively allowing it to enter foreign markets and greatly
increase its market share, productivity and profitability without sharing with others.
Market segmentation:
It refers to classification and division of people on basis of various factors such as
culture, tradition, preference and belief of people that are living in the society. Company
classified or segment people into various categories or different segments so that it can plans
method to satisfy need and preference of particular target market. It helps in effective analysis of
various requirements and unsatisfied need of people in particular market segment so that
strategies can be formed to meet needs (Đokić, 2016). Market can be segment into four
categories- demographical, physiographical, behavioural and geographical. Therefore,
demographical segment included components such as total population, number of males, and
female, adult and aged people or on basis of disposable income of customers within country.
Market can be segmented on basis of geographical or location where people lives. Behaviour is
another factor that stated values, preference and taste of particular individual to prefer specific
products and services that are available in the market. Physiological describes attitude, interest
and perception of individual regarding specific products and services. Therefore, all such are
basis of segmentation of customers so that company can plan innovative strategies to attract
particular target customer to make purchase and enhance sales volume of firm.
Targeting: Companies also plans in advance to target specific group of people so that it can
increase its market share and profitability. There are various types of market that firm want to
target such as concentrated, mass and selective marketing. In concentrated market company

satisfied need of few number of people that are living in the society whereas in mass marketing
company objectives is to meet needs of large number of people. On the other hand, targeting
marketing is used when company plan to market differentiate products to differentiate segment
market in order to expands its business operation and gain competitive advantages.
Positioning: Firm can also gain competitive advantages in new market segment by effectively
positioning its brand image, products and service in mind and heart of people. Attractive
infrastructure and use of innovative technology such as social media can helps firm in attracting
wide range of customers within limited time period and efforts (Tomczak, Reinecke and Kuss,
2018).
Therefore, it can be stated that positioning, targeting and segmentation play an important
role in effective marketing of products and service to customers as there is high relevant focus
towards bringing various strategies which will enhance further marketing. Walmart is one of the
biggest retail companies having various productive sales strategies, marketing essentials in its
business activities and the various functional ethics compliance through which further productive
synergy grows among all operations. For its business expansion into UK the hypermarkets,
stores and various stores opening have to be fragmented and established with structural planning.
STP will enable company to serve its customers well, targeted segments all the marketing
essentials through which further productivity is established for long term business revenues.
Targeting the segmented customers into varied categories will bring customised products.
services among consumers where later positioning role will be highly enhanced. There is strong
focus towards bringing efficiency within all delivery services of products to customers through
digital marketing platforms which not only elevate various grounds for expansion into UK
economy. The company has used marketing STP parameters to reach varied customer segments
and positioning will enable Walmart to practically be one of the major competitive force on
which further goals can be enhanced. STP marketing techniques bring high growth synergy
factor among all levels of marketing functions where it becomes relatively very easy and
impactful to reach new segments of customers.
Porter’s generic competitive strategies
Sustainability and growth of organisation in the industry depend upon level of performance
and productivity as per average industrial performance. There are various strategies that helps
company in company in gaining competitive advantages in the market but among them two are

best suitable for each and every organisation- low cost or differentiation. Therefore, it can be
stated that company can use these two strategies to increase its brand image and customers
satisfaction. Some of the strategies are depend upon scope of operation and objective of firm to
expand its business in particular segment such as focus differentiation and focus cost. Various
strategies are explained below for sustainability growth of organisation in long run:
Cost leadership: In this strategy company plans to attract large number of customers through
reducing its profitability and increase manufacturing of products and services. It is one of
traditional method that helps in growth and expansion of business by increasing its sales volume.
Company tries to use new and innovative technologies to reduce cost of production and bring
economic of scale to provide various products and service at affordable prices (Mghebrishvili,
2016). Effective utilisation of resource and minimum wastage of time and effort lead to
maximum output at minimum rates so that company can gain competitive positioning in the
market.
Differentiate leadership: When company want to expand its business across nation this strategy
is best suitable as it helps company in gaining competitive advantages through manufacturing
unique and qualitative products. Organisation can also charge high price from customers due to
highly differentiation between qualities of products render by particular company to other
competitors. Company that have innovative technology and high skilled employees in research
and development department helps in bringing continuous new and innovative ideas so that
unsatisfied desired of people can be satisfied. It had to take first mover advantages by launching
new products and services in market to make customers feel happy and satisfied with company
operation (Kalva, 2017). Effective marketing is also required to explain people about uniqueness
of products so that they can pay extra to prefer products of company over another. Therefore,
differentiate leadership helps in increasing brand image and customer’s satisfaction, loyalty so
that company can earn large amount of profit for longer run.
Cost Focus: Some of the firm use cost focus strategy by targeting only few amounts of
customers that have similar need and wants. Company analysis and evaluated need of target
segment and manufacture product at low cost for particular target market. Therefore, it can be
stated that in such market there is little competition and organisation earn minimum amount of
profit.

Differentiate focus: This strategy state that company is targeting only few amounts of customers
to provide unique and qualitative products to earn high profitability and market share. Such as
most of the company target high class people to offer high standard and qualitative products that
helps in saving of time and effort of individual and firm. Thus, promote growth and
sustainability of organisation within industry and charging higher price from target customers.
From the analysis of various strategies that can be used by company to market its
products and services for achievement of goals. But among four strategies differentiate is the
best strategy that can be used by Walmart to increase its market share and profit margin. Thus,
company is planning to launch innovative and creative products that can enhance customer
satisfaction and brand loyalty and promote growth and expansion of business through attracting
existing as well as new customers within organisation (Direction, 2018). It helps in increase
profitability margin and sales volume as firm can charge extra price for offering standard,
qualitative and unique products in the industry.
CONCLUSION
It can be concluded that there are effective marketing strategies are very necessary for the
top-level management of Walmart need to give special instruction to its marketing manager for
using such marketing strategies in daily marketing functions which can provide huge return to
the company. Currently there are huge market competition in the international retail industry.
That is the main reason that marketing manager of Walmart needs to be more active in its
existing job role. Marketing team of company should use STP model in its marketing operations,
because this is of the best marketing strategies which will support to company for properly
promoting its selected products and services in the select new market segments. There is porter’s
generic strategy also has mentioned here which can support to company for attracting lots of new
customers towards brand. These all marketing strategies and techniques will give opportunity to
the Walmart for gaining huge competitive advantage in the new market segment.

REFERENCES
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