Strategic Analysis of Walmart Inc.: A Comprehensive Case Study

This case study examines Walmart Inc., the world's largest retail chain, focusing on its competitive advantages, particularly its low prices and extensive product selection. The analysis includes an application of Porter's Five Forces model to understand Walmart's competitive position within the retail market, evaluating existing competition, bargaining power of buyers and suppliers, and the threats of substitutes and new entrants. The study identifies Walmart's advantages, such as economy and variety, and disadvantages, including healthcare and employee policies. Recommendations are provided to enhance customer experience, optimize inventory management, improve store design, and refine pricing strategies. The study concludes by emphasizing Walmart's need to adapt to market changes and maintain its competitive edge through strategic adjustments and continuous improvement. This case study offers valuable insights into the business strategies and challenges faced by Walmart in the retail industry.

Running head: CASE STUDY OF WALMART INC.
CASE STUDY OF WALMART INC.
Name of the Student
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CASE STUDY OF WALMART INC.
Executive summary
Walmart is one of the largest retail chain of the world which has many competitive
advantages and proved to be one of the best retail store in the world due to its low prices and
availability of a wide variety of products and goods. There are many advantages that Walmart
provides to its customers as well as its employees as well. There are certain room for
improvement which if rectified would help in performing and serving better in the forth-
coming years. Here the advantages and disadvantages of Walmart is discussed and some
recommendations are made in order to take corrective measures.

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CASE STUDY OF WALMART INC.
Table of Contents
Introduction................................................................................................................................3
Five forces:.................................................................................................................................4
Understanding the case of Walmart using porter’s five force model:...................................4
Existing competition in the market:.......................................................................................4
Bargaining power of the buyers:............................................................................................5
Bargaining power of the suppliers:........................................................................................5
Threat of substitutes:..............................................................................................................6
Threat of new entrants:...........................................................................................................6
Advantages:................................................................................................................................7
Disadvantages:...........................................................................................................................7
Recommendations:.....................................................................................................................8
Conclusion:..............................................................................................................................11
References:...............................................................................................................................12

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CASE STUDY OF WALMART INC.
Introduction
The only company that changed the face of retail is ‘WALMART’. It is the largest
retail store in US, and also the largest retail chain, which not only provides products to its
customers at a comparatively less rate but also provide the service that strive for excellence.
The main goal of Walmart is to provide customers a quality service, and respect for
every individual associated with it. The only retail company to remain on top consecutively
for several years, on the Fortune 500 is ‘WALMART’.
The assortments of the products in Walmart is he and provides a high range and
variety of goods (Seenivasan and Talukdar 2016). The business strategy of keeping prices
low has helped Walmart to be on good terms with the customers and provide quality products
conveniently (Thompson, Strickland and Gamble 2015). Walmart provides all the general
merchandise that includes apparel, beauty products, jewelry, shoes and many more.
The main competitive advantage of Walmart includes selection and improvement of
in-store varieties, less carrying cost and high competitive pricing for the consumers (Chekwa,
Martin and Wells 2014). This report discusses about the success and failure of Porter’s five
model, analysis and evaluation of five forces of Walmart Inc., advantages, disadvantages of
using this model and then provide recommendations for improving.
This model helps in analyzing the competitive position of any firm. It also helps in
understanding the strategy that needs to be followed and also helps in improving the potential
profit of the organization (Elder and Dauvergne 2015).
The main problem associated with this analyzing tool is that it doesn’t help in
identifying the industry/firm clearly (Nurlansa and Jati 2016). There is a chance of doing

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CASE STUDY OF WALMART INC.
many mistakes through this tool. As a result, it becomes difficult to formulate the required
strategy accordingly.
Five forces:
Understanding the case of Walmart using porter’s five force model:
The five factors that are essential to determine the competitive position of any
orgnisation are competitive rivalry, bargaining power of the supplier, bargaining power of the
buyer, threats of new entrants, threats of substitutes. All these factor must be critically
analyzed by any firm in order to have an improved structure in terms of profit to the company
(Omsa, Abdullah and Jamali 2017). Discussed below is the identification of Porter’s five
forces for a particular organization named Walmart.
The forces has been identified and rated either weak or strong, and the following
forces have been done for Walmart.
 Existing competition in the market: strong
 Bargaining power of suppliers: weak
 Bargaining power of buyers: weak
 Threat of substitutes: weak
 Threat of new entrants: strong
Existing competition in the market:
The market comprising of retail industry is highly saturated; which means that the
market is now placed with higher volume of goods and services of that particular industry.
Consequently, organizations of several firms are competing with each other in this
environment. However, there are certain basic external factors that must be kept in mind as it
is a result explaining why competitive rivalry is a strong force for Walmart.

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There is a development or emergence of many new firms which kind of impose a
challenge for the Walmart hence strengthening the competition in the market. Besides, the
assertiveness among several companies to remain in the market makes it a really strong force
thus leading to stronger competitive rivalry.
As a result, Walmart must stay strong and continue growing so that the position
continue to exist and remain as the major retailer across globe (Shambaugh 2018).
Bargaining power of the buyers:
The intensity in the bargaining power of the buyers for Walmart is considered as a
weak force because the citizenry is so high that it makes it difficult to express a pressure on
them.
There are certain external factors that should be considered as they determine why
bargaining power of the buyer is a weak force for Walmart. The diversity among the
customers is very high and there is mostly purchasing of a very small quantity by most of the
individuals. Besides, population also is a major concern for this firm in the market.
As a result, all these factors make it difficult and hence weak power for customers
bargaining. The impact of individuals on the global revenue of a company is negligible
making it a weak force for Walmart.
Bargaining power of the suppliers:
The suppliers of retail industry is huge thus making affect all these suppliers becomes
very easy for bigger firms like Walmart and hence Walmart experiences a weak force in
terms of bargaining power of suppliers. Again, there are some factors that helps in the
determination of the weakness of this particular force of the supplier.

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CASE STUDY OF WALMART INC.
Since, the suppliers are more in the market and there is a very strong and tough
competition among them also the availability of supply is very high as compared to the
buyers.
Thus, all these factors make it a weak force. The only thing that helps in managing the
influence of supplier’s on business is the social strategic responsibility of Walmart.
Therefore, there is a difficulty in competing for space that is limited in various retail store
(Gielens et al. 2018).
Threat of substitutes:
There is a weak intensity of the substitutes acting on the environment of retail
industry. As, the organization Walmart offers a wide range of products and many services
which do not have many or even no substitutes that would have an impact on Walmart.
There are certain external factors present that helps in determining the weak force of
the substitutes as well which includes the availability of the substitutes that is present and
which can be considered as a moderate weak force acting upon.
There is a very low variety of substitutes and also the cost of the substitutes is so high
that one cannot afford it. These are the factors that decide that the threats to substitutes is a
weak force for Walmart (Banerjee 2015).
It is not that there are no different substitutes against Walmart, but the thing is most of
the customers do not like to switch and make a choice that is against Walmart as it is a very
renowned and one of the classic retail stores of the world.
Threat of new entrants:
This threat has a strong force on the company and Walmart needs to address this
particular force in order to remain in the market for long. Entry of various retail firm is very

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easy and small retailers can easily get into the market if they have a better and convenient
facility, if location is appropriate for the customers to visit the store and many other factors.
Certain factors that helps in breaking down so as to analyze what makes this threat of new
substitutes a stronger one.
The cost of the development of brand is sometimes moderate and many a times high.
The cost of doing business is low as compared to other organizations and sectors. Also the
cost of capital associated with this particular industry is medium and neither high nor low
making it a stronger force of analysis.
Developing a new brand is very expensive but as some of the new entrants are quite
sound and have a great financial support, therefore, it becomes quite easy for them to sustain
and give a neck to neck competition to Walmart. There has been cases where it is seen that
some new entrants have and had already lowered their operational cost making it very easy
for them to enter the market.
The core of the business of Walmart is leadership. The major attraction of Walmart is
its low price from any of its competitors in the market. There are around 4400 retail outlets
employing about 1.4 million people of Walmart (Obeng et al. 2016).
Advantages:
1. Economy of Walmart: it has made and helped a lot of low-income families who fail
to avail many services as they are very much expensive for them, hence could not
afford (LeCavalier 2016).
2. Varieties: Walmart is an on-stop shop ad has a huge assortments of products to
provide to the customers at a fairly cheaper price than other companies.
3. Lesser price: many customer gets attracted due to the low price of the product and
one can easily save a lot of money while purchasing at Walmart.

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CASE STUDY OF WALMART INC.
4. Providing employment: Walmart provides a huge employment service to many
people across globe which also helps in increasing the economy of any country (Reich
and Bearman 2018).
5. Expanded area of business: new stores constructed helps in attracting n number of
other businesses due to competition, which again a very good thing.
6. Diversity in business model: there are different models that Walmart introduces
which help in maintaining a diversity within the organization.
Disadvantages:
1. Poor healthcare service: the health care service of Walmart is considered the worst
in America.
2. No employee policy: the respect given to employees of Walmart is considerably not
okay and they deserve more.
Recommendations:
There are many areas of improvement for Walmart which needs to be seriously
followed and implemented.
Improvement in the shopping experience of the customers is very important and the
stock must be kept in a proper position so that it is visible to the customers and they can
purchase their goods accordingly. It becomes and is mandatory to satisfy the demand made
by the customers and also maintain a good relation with them (Hwang and Park 2016).

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CASE STUDY OF WALMART INC.
It becomes important in maintaining the right inventory as Walmart has a huge
inventory and steps must be taken in improving sales and the margin must be achieved before
the date of the food products expire.
The major change that must be made is with the design and layout of the stores of
Walmart. Walmart can have their lighting fixed in terms of a more bright one which would
help n attracting more customers and resulting in more foot-fall for the firm (Jin et al. 2014).
The pick-up option can also be improved so that the store is present in other parts of
the city thus making the presence of the store everywhere. It becomes equally important that
the space of the store that is the retail space is utilized properly so that the services offered to
the customers is more and a feeling of satisfaction among the customers remain.
It would be very helpful for Walmart as far as competitive advantage is concerned if it
reduces the price even further. This would create an attraction and loyalty among the
customers for Walmart and they will be interested more with the firm.
One more thing that could be done is the addition of more variety of products and
making it available to the customers because the demand changes with change in preference
and style of the customers every year. They must recognize the need that what customers
want and can customize their product accordingly.
The headquarters and the stores must be properly aligned for the better working of the
organization and more power must be provided to the associates of the store so that there is
an improved and better relationship with the customers of the organization.
Maintaining the competitive advantage that includes large scale of operation and high
bargaining power is important for Walmart to sustain the market demands and have a long
term sustainability (Zhao and Wang 2015).

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CASE STUDY OF WALMART INC.
Walmart can try to lower the cost of distribution associated with its network and can
make a business model that is comparatively of less price and not exploiting the economies of
scale (Shabbir 2015).
The generic strategy of cost leadership that is used by Walmart can be improved as
this strategy can be easily copied by someone being the most simplest of all (Smith and
Crawford 2019).
New technologies can be introduced making it convenient for the customers to avail
the service and helping customers to shop more. Mobile shopping with Walmart has made it
very easy since it provides a better set of information about the type of the product and the
availability of the same.
Improvement in the decision making is also very important as it helps in giving a
better role to play for the customers and the personnel as well and a sense of responsibility
about the product and the firm develops (Smith and Crawford 2019).
Now, I will be discussing on how I feel and what my thoughts are when it comes to
Walmart. Walmart being the largest retail store is able to satisfy most of our demands and
needs and wants at quite a reasonable amount, and it gives privilege to the one with low
income and to them too who cannot avail the products because of the high prices made by
other retail stores.
However, practice makes a man perfect and there is always a room for improvement.
Walmart can make changes that is required to change and that could help the organization to
perform better and earn more profits for the company. The base of any competitive advantage
is the differentiation of the product from the competitors which is significant and visible
enough for the other persons to see and then evaluate.

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CASE STUDY OF WALMART INC.
Hence, Walmart should keep that base very strong so that the required result is met
and employee as well as the customers both remain satisfied with the goods and products
provided by Walmart. There is a lot of scope for many retail giants like Walmart as the retail
sector is expected to grow more in the forthcoming years (Gaur and Kesavan 2015). It is very
important that a proper utilization of both function of price and the characteristics of the store
and its layout is done in order to improve the quality of chain of product and supply as well.
Walmart had a great impact on the market structure. It had an unique entry as far as
grocery retailing is concerned and it had already taken a dominant position in the market due
to its extensively networks of store and a very creative and great art of the distribution
system. The focus was mainly on the sales and then the focus shifted to the entry and exit
barrier (Ellickson 2016).
Walmart being the largest retail chain of the world has attracted many customers that
are loyal and had provided a better and effective pricing range for its customers which help
them to attract a huge number of customers will a huge variety of products, convenient for all
to reach the desired destination at a quick pace of time (Tate et al. 2014). There are many
perks that are associated with the people who are employed as a full time employer in
Walmart.
There are many options to expand for Walmart in the coming years to several
different countries and hence customers can have an improved perception or view point and a
better communication. However there are many scope of fragility as well. Walmart needs to
cover those area that are causing a barrier to it sometimes.
There are certain examples like the carrying capacity of inventories by Walmart is
huge and it needs to be quickly dissolved in order to have a better performance and less
shrinkage of good especially staples.

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A problem arises when the taxation tariff is increased and most of the firm could not
cope up with this and lastly they have to dilute themselves. Hence, taxes must be kept in
mind always.
Conclusion:
Walmart has always been appreciated and has proved to be good for many people as it
helps many people to save their money due to the low prices strategy. This was the smartest
move made by Walmart and because of this only reason it continues to be the best and rule
the market since years.
Unlike earlier there is a reduced pressure on the employees of the Walmart and now
they perform better. Therefore it can be concluded that there is a better chance of growth for
Walmart and they can expand and target international markets as well.

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