Detailed Report: Organisational Structure and Strategy of Walmart

This report provides a comprehensive analysis of Walmart's organizational structure and strategic management. It begins with an overview of Walmart, including its mission, vision, goals, brief history, organizational structure (hierarchical functional), organizational culture, and corporate social responsibility initiatives. The report then delves into a strategic analysis, examining Walmart's internal strengths (business size, efficient supply chain) and weaknesses (thin profit margins, high employee turnover), and external opportunities and threats using Porter's five forces model, industry life-cycle analysis, and external environment factors. A SWOT analysis evaluates these factors, followed by financial analysis, and an assessment of Walmart's overall competitive position. The report further explores Walmart's corporate-level strategy, identifying its strategic business units and analyzing the relationships between them. Business-level strategies are also examined, along with functional strategies that build competitive advantages. Finally, the report discusses Walmart's control systems, encompassing both strategic and operational aspects, concluding with a summary of the key findings. References are included at the end of the report.

Running Head: Organisational Structure of Walmart
Organisational Structure of Walmart
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Running Head: Organisational Structure of Walmart
Table of Contents
I. Introduction – Company Overview...........................................................................................3
A. Mission, Vision, Goals..........................................................................................................3
B. Brief History..........................................................................................................................4
C. Organizational Structure.......................................................................................................4
D. Organization Culture.............................................................................................................5
E. Corporate Social Responsibility Initiatives.........................................................................5
II. Strategic Analysis......................................................................................................................6
A. Internal strength and weakness............................................................................................6
B. External Opportunity and Threats........................................................................................6
1. Porter's five forces model..................................................................................................6
2. Industry life-cycle analysis...............................................................................................7
3. External environment factors............................................................................................7
C. SWOT Analysis Evaluation..................................................................................................8
D. Financial Analysis.................................................................................................................8
E. Overall competitive position................................................................................................9
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Running Head: Organisational Structure of Walmart
III. Corporate Level Strategy Analysis.........................................................................................9
A. Identification of corporate level strategy in Walmart.........................................................9
B. Identification of strategic business units/divisions...........................................................10
C. Analyze the relationship between the company's businesses units/divisions.................10
1. Do the business units’/divisions’ trade or exchange resources? Why? How?.............10
2. Is the company just running a portfolio of investments? Explain................................10
IV. Business Level Strategy.........................................................................................................10
A. Competitive strategies for each the business units/divisions..........................................10
B. Functional strategies that build advantages in competition through quality, superior
efficiency, innovation, and customer responsiveness............................................................11
V. Control Systems.......................................................................................................................11
A. Strategic...............................................................................................................................11
B. Operational..........................................................................................................................12
VI. Conclusion..............................................................................................................................12
References.....................................................................................................................................13
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Running Head: Organisational Structure of Walmart
I. Introduction – Company Overview
A. Mission, Vision, Goals
The main mission of the Walmart is to save the money of the people so that they can
live in a better way. By this statement, it is clear that the price of the goods will we
reasonable to attract the customers. The strategy made by the organization is also price
effective. The company motive is to be the destination for the customers to save money and
buy the products. The company vision statement is to be the best retailers in the heart of the
customers. The company main motive is to become the top player in all over the world in
the retail sector. The value of the organization always keeps the interest of customers first.
There are various generic and intensive strategies made by the organization to achieve its
mission. Cost leadership generic strategy is used by the Walmart to minimize the operational
cost and achieve the financial advantages. These advantages include attractive low selling
prices along with profit maximization. A generic strategy is directly linked to the corporate
mission and vision statement of the Walmart (Banerjee, 2015).
B. Brief History
Walmart is an American company that began in the year 1962. It is one of the largest
supermarket chains in the whole world. There are around 200000 employees working with
the organization. The main motive of the company is to increase the sales volume by
decreasing the prices of products. The company is headquartered at Bella Vista. There are
around 8500 stores of Walmart in all over the world. Every week around 2.1 million people
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Running Head: Organisational Structure of Walmart
visit the Walmart store. But around 50 years ago there was five and dime store of Walmart.
It is one of the largest retailers in terms of revenue and number of employees.
C. Organizational Structure
Organizational structure means how activities are performed in the organization as
supervision, allocation of task, coordination, etc. Walmart has a hierarchical
functional organizational structure. In simple words, hierarchy feature means the authority
and command pertains to the vertical lines in the organizational structure. In this case,
except for the CEO, every employee of the company has a direct superior. Mandates and
directives that come from the higher level of the management are directly implemented by
the middle managers down to the file and rand of employees in the stores of Walmart. It is
also called the matrix organization. In this kind of structure authority and power are
formally separated and it comes together into a competitive, efficient and functional unit. In
this type of structure every unit or entity except one, of the organization is subordinate to
other single entity. It is advantageous for the organization because the responsibilities and
roles of employees are fixed that helps in facilitating the easy accountability of work
(ZHANG, 2018).
D. Organization Culture
Every organization has a different organizational culture, same is with the case of
Walmart organizational culture. The organization has four main gears. All components of
the organization behaviour help in guiding the behaviour of the employees that also helps in
determining the capacities of Walmart. It adds the value in the stipulation of the retail sector
and services related to the customers. The main gears are providing service to the customers,
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Running Head: Organisational Structure of Walmart
acting with integrity; strive for excellence and respect of every individual. In case of
providing services to the customers, the organization prioritizes clients in its procedure of
selling the products. The company also appreciated the contribution of each and every
employee in the success and in achieving the targets. The organization always tries to
perform excellently as an individual, as a team, and as an entire company. In terms of
maintaining the integrity organization always tries to promote fairness, the intrinsic worth of
honesty and neutrality in making decisions (Santos & Laczniak, 2015).
E. Corporate Social Responsibility Initiatives
There are different types of corporate social responsibility of each and every
company in all over the world. As CSR strategy of Walmart totally depends on three
principles such as, the first principle is the creation of the various kinds of economic
opportunities for the suppliers, employees and the people who work in the retail supply
chain beyond Walmart. The second principle is the enhancement of the sustainability of
operations and product supply chain for the people and the planet. The third principle is to
build communities where retailers can operate without any kinds of hurdles. There are other
initiatives also taken by the company in respect of the corporate social responsibility as a
company tries to save the planet along with the resources. The main motive of the company
is zero waste and to sell the products that sustain the environment along with people (Ofili,
2016).
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Running Head: Organisational Structure of Walmart
II. Strategic Analysis
A. Internal strength and weakness
Strength The main strength of Walmart is the size of its business. This strength helps the
company in withstanding the threats in spite of various weaknesses. The supply
chain of Walmart is also very big that helps the company in profit
maximization. Along with the size of the supply chain, its efficiency is also
very high (Laudon & Laudon, 2016).
Weakness The biggest weakness of Walmart is thin profit margins because of company
sales the products at reasonable prices. The cost leadership strategy if the
company is easily copied by others. The employee’s turnover of the company is
also very high because of the lack of motivation among the existing employees
(Chatterjee, 2017).
B. External Opportunity and Threats
1. Porter's five forces model
The five forces are:
Competitive rivalry The intensity of competition of the company is highly strong as
there is large no of firms along with the large variety of products
and retail outlets (Spicer, A., & Hyatt, 2017).
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Running Head: Organisational Structure of Walmart
Supplier power The supplier's power is a weak force for Walmart. As there are
many suppliers in the industry. The external factors that affect the
bargaining power of Walmart are many suppliers, tough
competition and more availability of supply.
Buyer power Walmart faces a weak intensity in terms of buyer power. The
external factor that affects the buyer’s power of Walmart is a
small portion of the purchase of individual, highly diverse
customers and large population (Tarofder, et. al., 2017).
Threat of substitution There is a weak threat of substitution for the products for Walmart
as the company offers the product to the customers with the few or
no substitute.
The threat of new
entry
The threat of new entrants in the market, Walmart addresses the
strong force in this case. Many small retailers can enter the market
and can cause an adverse impact on the organization (Acquaah &
Amoako-Gyampah, 2016).
2. Industry life-cycle analysis
Industry life cycle contains various stages in it. The beginning stage of the
organization was very good as the business was growing further without any concern. The
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Running Head: Organisational Structure of Walmart
company uses the life cycle analysis for measuring and analyzing the funds to be invested in
the business. It is the tool that helps the organization in various respects such as it helps
Walmart to sustain in the competition. The phase growth of the industry was also very
beneficial. The company has shown the regular growth in all respects as today's it is the
world largest retail outlet. Shakeout stage of the company was not eventually good as at this
stage the company was not earning more profit. Maturity stage of the company was well
established as an organization was successful in capturing the markets (Found, et. al., 2018).
3. External environment factors
External analysis means the examination of the industry environment of Walmart.
There are various factors included in external factors such as economic, legal, political,
technical, and socio-cultural. All kinds of organizations are affected by all such
environmental factors. If there is any kind of change in legal policies all procedures of the
Walmart can be altered by the alteration in any kind of law. Walmart is more under the
pressure of the economic factors as any change directly changes the amount of revenue for
the company. There is a major need for Walmart to address technological trends. Walmart
needs to increase its investments in technological factors. For increasing the sustainability
of the business Walmart needs to improve efficiency in its operations. Innovation in
technological factors helps Walmart in improving the efficiency of its business (Barber,
2018).
C. SWOT Analysis Evaluation
It is concluded by the swot analysis of the Walmart that company should prioritize its
strength to grab the opportunities in the worldwide market. The company should improve
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Running Head: Organisational Structure of Walmart
its human resource strategies for effective growth and development. The main weakness of
Walmart is employee turnover as people thinks that the company does not treat employees in
a good manner. The brand image of Walmart is affecting badly due to the cries of their
employees. The competition for the company is also a major threat as the company is best
known for its high-quality products. The company should expand its business all over the
world. In some products of the company the customers are not satisfied as the quality of the
goods is very cheap. It can be analyzed that Walmart should step up their performances for
the employees along with the customers (Rothaermel, 2018).
D. Financial Analysis
The revenue of Walmart is continuously increasing day by day with the growth of the
company. The growth of the company is consistent along with the historical trends that help
the organization in gaining the market share and to expand its operation in international
markets. During the year 2017, the revenue of Walmart increased by 0.8% and it reached
$485,873 million. In the year 2017, the cash generation in cash from operating activities was
$31,530 million. Out of the cash was used in the expenditures regarding capital and, $6,216
was distributed in the form of a dividend to the shareholders. The company used around
$8,298 million in repurchases of its own shares form the market. The company paid interest
of $2,351 million on debt and around $4,507 million was paid as different types of taxes
(Simpson & Power, 2016).
E. Overall competitive position
The overall competitive position of Walmart is good. Walmart is a leading retail
business in the US as the company is successful in capturing the market. The brand equity
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Running Head: Organisational Structure of Walmart
of the company is very high as many buyers like to purchase the products from Walmart. As
the prices of the products of Walmart are also low it is the main reason that the company is
able to win the hearts of the customers and to capture the market share. The brand is the
most loved brand in the US due to its quality of products. The customer service also plays a
major role in the success of the company and Walmart provides the best services to the
customers. Price and quality of goods help the organization in managing the equity. Strong
brand equity is directly linked to the customer's loyalty. The company is able to achieve its
sales criteria due to the trust of customers on Walmart (Ghosh & Shah, 2015).
III. Corporate Level Strategy Analysis
A. Identification of corporate level strategy in Walmart
Corporate level strategy means the strategy made by Walmart for gaining the
competitive advantages by management and selection of the mix of businesses competing in
product markets or various industries. The corporate strategy of Walmart is termed as the
focus strategy that helps in emphasizing on providing the products and services to the group
of specified buyers or the particular market segment within the geographic market. The
organization generally focuses on the long term policy of the cost leadership. This policy
helps Walmart in offering the good quality of goods at reasonable prices. By this strategy,
the company is successful in offering the good quality of products in the market as
compared to the competitors. This has helped the company in capturing the market in a short
span of time (Robson & Pitt, 2018).
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Running Head: Organisational Structure of Walmart
B. Identification of strategic business units/divisions
Strategic business units are the team or divisions of the Walmart that is solely
responsible for their own bottom line and strategy. In several cases, they are run as a
completely different unit. The examples of units are products, customer segment, and
services. As there are a variety of products, that is manufactured by Walmart for different
customers. Services are also provided in a different manner to different customers. All units
are different and they operate differently. The motive behind the strategic unit/ division is
the company at a time can’t perform all the functions so for functioning various strategic
units are made (Grube, et. al., 2017).
C. Analyze the relationship between the company's businesses units/divisions
1. Do the business units’/divisions’ trade or exchange resources? Why? How?
Yes, the business units of Walmart trade and exchange the resources within the
organization. The main reason behind the exchange is the scarcity of resources. The extra
resources are given to different unit so that they can function properly through the proper
communication channel in the organization (Smetana, et. al., 2017).
2. Is the company just running a portfolio of investments? Explain.
Portfolio of investments means the group of investment made by the Walmart in
respect to the bonds, equity, debentures, banknotes, securities, etc. The company is not only
running the portfolio of investments but it is also exchanging the trade and resources
whenever they are required (Freidberg, 2015).
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