Strategic Analysis Report: Walmart's Strategies and Performance

This strategic analysis report examines Walmart's business strategies, focusing on its success factors, strategic positioning, and instances of failure, such as in the German market. It delves into the company's background, adopted business strategies, and strategic position within the industry. The report applies various analytical tools, models, and theories, including strategic fit, models of failure, resource-based view, strategy clock, and Porter's Five Forces, to assess Walmart's internal and external environments. It also provides strategic recommendations for the company's future endeavors, highlighting the importance of adapting strategies to different target markets and maintaining a strong competitive edge. The analysis includes a discussion of Walmart's strategic capabilities, resource-based views, and supply chain management, as well as a business canvas model, offering a comprehensive understanding of the factors contributing to Walmart's long-term success. Desklib provides access to this and many other solved assignments.

INDIVIDUAL STRATEGIC ANALYSIS
REPORT
(A case study of Walmart)
Name of the Student:
Name of the University:
Student’s ID:
Referencing style: Harvard
Word Count: 3200
Author’s Note:

STRATEGIC ANALYSIS REPORT
Table of Contents
1. Introduction..................................................................................................................................2
1.1 Company background............................................................................................................3
1.2 Business strategy adopted by Walmart..................................................................................3
1.3 Strategic position of the company.........................................................................................4
2. Various lenses, tools, concepts and theories................................................................................6
2.1 Strategic fit.............................................................................................................................6
2.2 Models of failure....................................................................................................................7
2.3 Resource-based view and strategic capabilities.....................................................................8
2.4 Strategy clock........................................................................................................................9
2.5 5 Forces analysis..................................................................................................................10
2.6 Theory of strategic management.........................................................................................11
3. Internal environment analysis....................................................................................................12
4. Strategic recommendations........................................................................................................12
5. Conclusion.................................................................................................................................14
References......................................................................................................................................15
Appendices....................................................................................................................................18
1

STRATEGIC ANALYSIS REPORT
1. Introduction
Companies use different strategies and plan to remain in a particular target market. There are
several stances where the strategies have shown a great increase in the productivity and revenue
of the companies, while in the stances, the strategies of the companies have shown it to face
failure. Hence, the strategies that lead a company to make it a typically successful or failed
company is an important topic to discuss. In this report, the researcher has provided a brief
industrial analysis and the critical success factors of Walmart, which is one of the largest
growing companies in the US. In this report, a short discussion about the stances where the
company has failed to provide adequate services and faced huge failure in Germany has also
been provided.
From the very beginning of the report, it could be analyzed that Walmart has been constant in its
market position, and there were very few chances where the company provided any sort of
opportunities to its competitors. In the midsection of the project, a brief discussion about various
tools, models and theories have been provided with proper justification to determine the business
strategies of Walmart. In the last few chapters of the report, the researcher has provided the
business canvas model and the internal and external market analysis of Walmart. This will help
the readers to understand the ways in which the company maintains its internal organizational
culture and the strategies. Additionally, it is also necessary to understand that these strategies
have helped the company to retain its success for such a long period.
2

STRATEGIC ANALYSIS REPORT
1.1 Company background
Walmart is a discounted chain of stores that was formally established in the southern UK
primarily in the year 1962. The discounts that the company provided and the high quality of the
products were the two most important factors that attracted the customers to opt for the
company’s products and services. Walmart has a huge domestic and international market base
and works in more than 20 countries (Amuna et al. 2017). However, the maximum revenue for
the company is generated by the US, Argentina, Brazil, the UK and Japan. Other than that,
Japan, Canada, Chile and China are also a great source of revenue generation for Walmart. The
journey of the company to be a globalized icon has not been smooth and easy all the ways long,
rather a lot of hardships covered the entire journey. The cases of strategy failure, legal disputes,
property aspirations and legal troubles were a very common concern. In the following sections,
the success factor of the company has been linked up with the failure factors as well (Ansoff et
al. 2018). This will help the readers to understand the necessity of changing strategies based
upon the target audience and target market.
1.2 Business strategy adopted by Walmart
Constant business change has been one of the leading strategies of Walmart. Proving the
customers with the ease of shopping ion a daily basis has been one of the easiest ways to attract
and retain brand loyal customers. According to Baumgartner and Rauter (2017), the “everyday
low price” makes it easier for the customers to opt for the company’s services, regardless of their
holidays or the company’s value-added services. Sale of the products and increase in the
customer’s satisfaction make it easier for the company to grow, both in the bricks and mortar
stores as well as in the online shopping trends. In this regard, it can be noted that more than 75%
of the company’s revenue and sales are gathered by the selling in the official shopping store of
the company, Walmart.com (Boyle 2017). However, it the recent few years, certain changes and
modifications in the business strategies of the company has been done. Some of the major
strategies are listed below:
a. Increasing the focus upon the customer’s sales and services: From February 2015,
Walmart has decided to spend 1 million USD in the US market. The investment was
made to hire strained and skilled labors and provide training to the newcomers by
providing adequate services. This made the company gain a large number of career
3

STRATEGIC ANALYSIS REPORT
builders to join with the services of the company. Moreover, with the increased services
and proper training to the employees, the sales and services that are offered to the
customers have also increased to several folds (Chiang et al. 2018).
b. Improving the groceries: There are many ways and aspects where the changing
marketing pattern of Walmart can be analyzed. However, changing the grocery items and
the value content are most prominent. In the recent few months, the company has
increased the production and display to fresh and organic food material in all its branches
that are specifically displayed and targeted to the health conscious customers and
youngsters.
c. Developing the flexibilities of the shopping experiences: Enhancing the business by the
help of digital application is the latest trend, which Walmart is applying in most of its
stores. With the help of digitalization, the company is able to determine the maximum
and a minimum number of sold products, time each customer are spending in the stores
and many more such liabilities (Cokins 2017). On the other that the customers who are
willing to buy online goods are able to manage theory delivery charges, procedure and
address very well with the digitalized version of the company.
1.3 Strategic position of the company
The strategic position of a company is determined by the grip that it holds in a particular industry
or target market. In contrast to Walmart, the organization’s position in its own grocery service
providing market is undoubtedly a stagnant position. The ways in which the company attracts
customers towards its services and offers and the rates and reviews that it has gained from its
customers all these years are worth the factor to place it in the topmost position in the
competitive market. As per the view of David and David (2016), however, in not only the
domain market, but Walmart has shown a stagnant positioning in other industries as well. As an
example, Walmart has company collaboration with TruConnect, which is a wifi and
telecommunication service providing company.
Making collaboration with this company has reduced the charges to use the wifi largely.
Moreover, the company has also achieved a prominent position in the soft drink market by
making collaboration with Sam’s Choice Cola, a company that manufactures and deals with
large scale soft drink manufacturing companies. Moreover, the company collaboration with Ol'
4

STRATEGIC ANALYSIS REPORT
Roy dog food and Great Value brand, has managed the company to retain their brand value and
market position in the pet food industry ad perishable service providing industry respectively
(Engert et al. 2016).
5

STRATEGIC ANALYSIS REPORT
2. Various lenses, tools, concepts and theories
2.1 Strategic fit
Strategic fit is regarded as the degree up to which a company maintains and manages its
resources and capabilities to meet the demand and need of the customers. Strategic fit is more
used to determine the effectiveness of a company in its external market and environment. A vital
measurement is used by the companies to analyze the resource and capabilities to support and
execute their respective strategies (Ethiraj et al. 2018). Based on the ways and areas where the
strategies are applied, the strategic fits are divided into four main categories; the technological
fit, the operating fit, the managerial fit and the customer and distribution related fit. A brief
discussion about the different strategy it is in contrast to Walmart has been provided below:
The technological fit: Increasing the focus on the products that provide maximum profit to the
company and reducing the display of the products with the least productivity is included in this
strategy. As an example, the company has removed Pactiv Corp.'s Hefty and Clorox's Glad brand
products with the SC Johnson's Ziploc and Walmart's own Great Value private label.
The operating fit: Maintaining the balance between the fast, friendly and clean products makes
the customers easy to opt for the services of Walmart. Development of the smooth merchandize
flow that aims to replenish the product cycle within 48 hours has been one of the greatest mean
to manage the cost and productivity (Ginter et al. 2018). In this regard, the development of cross-
docking process at the inventory level das eliminated unnecessary data storage and handling
processes.
6

STRATEGIC ANALYSIS REPORT
Figure 1: Geographic market share of Walmart
(Source: Shams et al. 2018)
The managerial fit: The green policies of Walmart are the ultimate sustainable planning of the
company. The supply chain management system hence needs minimum effort to continue. The
distribution and production of the products from the raw material to the finished products, and
maintaining the supply chain management system efficiently from the production centre to the
distribution centre, then to the stock market and ultimately to the stores are managed by the
effective supply chain management system of the company (Karadag 2015).
The customer and distribution related fit: Price leadership and consumable goods are the
properties of the products that Walmart is well known for. As opined by Grover et al. (2018), in
this regard, enhancing the everyday low pricing policies and reducing the prices of each of the
product segment is one of the major criteria. Therefore, the company is aiming to achieve this by
implementing price leadership in its product distribution and selling strategies.
2.2 Models of failure
Although Walmart has a huge market grip in many countries, there are certain areas where the
company has failed to manage its identity and product distribution strategies. Therefore, the
compound failure model will be highly applicable to the company’s failure aspects. The main
failure scenarios can be analyzed by the business growth and development strategies in Germany
from 1997 to 2006 (Herrmann and Herrmann-Nehdi 2015). The compound failure model will be
appropriate for this case because not a single individual was responsible for the failure; rather,
the entire system and planning was responsible.
The foremost failure of planning can be noticed from the planning of implementing low price
strategy. The plan was highly unsuccessful because many German companies were already using
this strategy, and it was difficult for Walmart to attract customers towards the company by
applying this strategy. The top competitor of the company, Metro, executed all the paths and
blocked the chances of international expansion in Germany by sharing maximum resources in
the target market. Hence, the availability of a strong competitor in the target market was also one
of the reasons for the failure of the strategic plan of Walmart to penetrate the German market. In
7

STRATEGIC ANALYSIS REPORT
regards to determine the failure factors of Walmart in the German market, discussion about the
governmental policies is very important.
During the previous years of their implementation, the company managed to sell their products at
the lower prices that the manufactured prices. Although this policy was not governed by any
other state or country, Germany had a strict regulation for this strategy (Jansson et al. 2017).
Hence due to governmental disputes and insufficient knowledge about the policies and
regulations of the German government, Walmart failed to get a superior position in the target
market of Germany.
2.3 Resource-based view and strategic capabilities
The strategic capabilities and the resource-based views of the company can be determined by the
distribution and procurement abilities of Walmart. In the primary review, it can be analyzed that
the product manufacturing and distribution process of Walmart is very smooth. Availability of
the handheld computers makes the customers easily avail the services and products available in
different locations within the centre. As compared to the competitors in the market, the shipping
charges of Walmart are just 3% whereas 5% is of the other competitors. Moreover, production
from the own warehouse of Walmart gains 85% productivity and sell, whereas the competitors
gain 500-60% (Jenkins and Williamson 2015).
8
Sophisticated
barcodes
Product
distribution and
management
Hand held
computers

STRATEGIC ANALYSIS REPORT
Figure 2: Strategic capabilities
(Source: Uhl and Gollenia 2016)
The product distribution and management can analyze the greatest example of the strategic
capabilities of Walmart by the implementation of sophisticated barcode technology. This helps
all the employees of the company to get the same knowledge about a product without any
miscommunication or doubt while explaining to the customers. Moreover, Availability of these
sophisticated barcodes enables the employees to determine the amount of packaging that is
needed to be domain and help the customers to save time in unnecessary billing procedure.
Hence, the marketing strategy and resource capabilities of Walmart are highly comparative as
compared to other players in the same target market. Availability of more than 3500 trucks of the
company’s own patent mark helps the company to reduce the distribution charges to a large
extent. Therefore, the product distribution timing is managed in a maximum of 48 hours
(Kerzner 2019). This capability of the company is gained by the strategy of hiring skilled labor
who have driven more than 300,000 kilometres without any accidental cases and minor accident
prone areas.
2.4 Strategy clock
The strategy clock helps to determine the effectiveness of a company based on the strategies it
follows and the result it receives from its customers. Based on the various level of market
success and failure, Bowman distributed the strategy clock into 8 major subunits. Starting from
the market success value to the market failure factors, there are 8 sections in the strategy clock.
Determining the effectiveness of Walmart based upon the rating of the strategic clock ‘will help
the readers to analyze its effectiveness in the external market.
As stated by Lasserre (2017), various strategies that have applied by Walmart and has been
discussed in the previous sections, it can be analyzed that Walmart lies in the low piece and low
added values in the strategic clock. The low price is applicable, because the management
provides services like everyday low price value, whereas the lower added value is applicable
because the strategies like lower expenses for supply chain management and technical stability
measures are highly implemented and followed by the company.
9

STRATEGIC ANALYSIS REPORT
Figure 3: The Strategy clock
(Source: Morecroft 2015)
2.5 5 Forces analysis
Porter's five forces help to analyze the external market environment of the company.
Determination of different forces and various aspects of external market make the companies
analyze the effectiveness of their strategies and the urge to change their current marketing
strategies. Based on Porter's five force market analysis, the effectiveness of Walmart in the
international .and domestic platform can be analyzed.
Intensify of the competitive rivalry: The number of similar forces in the retail market is highly
available, and their varieties are also very much diversified. Therefore, the intensity of the
competitive rivalry in the international and global market is very strong.
10

STRATEGIC ANALYSIS REPORT
Bargaining power of customers or buyers: Due to the availability of a large number of
consumers and diversified workforce, the bargaining power of the buyers or the customers is
lower (Morschett et al. 2015).
Bargaining power of suppliers: The suppliers are available at a large pace, and the supply chain
management of the company is also very much sorted. Therefore, the bargaining power f the
supplier is comparatively lower.
Threats of substitutions: Substitutes are moderately available; most of them have lower variety
and higher cost. Therefore, the threats of the substitutions are very weak for Walmart.
Threats of new entry: Increasing rate of brand development and their strategies of sharing
products in lower costs make the threats of the new entries for Walmart very strong (Moutinho
and Vargas-Sanchez 2018).
2.6 Theory of strategic management
The theory if strategic management revolves around four major aspects; mission, corporate
analysis, value system and societal values. According to this theory, a company that analyses
these four aspects gets a brief idea about the effectiveness of their strategic management in a
particular target market. Based on this, the theory has been applied for Walmart as well;
Identifying the company’s mission: The mission of Walmart is to provide minimal cost with
maximum value-added services to all the people around the globe.
Corporate analysis: As discussed earlier, the resource capability of Walmart is very stable and
unique has compared to that if the competitors (Morden 2016).
Value system analysis: The reliable and reasonable cost for the products to the customers makes
it easier for the company to attract a number of customers. This has also helped the compact to
penetrate in the developing countries as well (Noe et al. 2017).
Societal value analysis: Strategies like green policies and sustainable development plans provide
a wide range of scope for the company to make a great impact on society and customers.
11