Strategic Analysis: Walmart's Competitive Strengths and Strategy

This report provides a comprehensive strategic analysis of Walmart, examining its competitive strengths, market position, and areas for value chain improvement. The report delves into Walmart's cost leadership strategy, customer service initiatives, and effective operational management. It analyzes Walmart's strategic plan, including its vision and mission statements, objectives, and the use of tools like the Ansoff Matrix and Porter's Value Chain analysis. The report also explores Walmart's market penetration, development, and diversification strategies. Furthermore, the report discusses the importance of monitoring and controlling the strategic plan to ensure the achievement of organizational goals. The analysis draws upon various sources, including books, journals, and online statistics, to provide a well-rounded understanding of Walmart's strategic management practices.

STRATEGIC
MANAGEMENT
(ASSESSMENT 2)

Table of Contents
Part A (1)......................................................................................................................................3
Competitive strengths of Walmart ..............................................................................................3
Market position of Walmart.........................................................................................................3
Need of improvements in value chain.........................................................................................4
Part A (2) .....................................................................................................................................4
Monitoring and controlling of strategic plan...............................................................................7
Part B...........................................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

Part A (1)
Walmart is into the business of both retail and wholesale operating both online and in-
shop worldwide. Their product line include foods clothing and many others. They enjoy global
presence and leading the market and giving competitive edge to its competitors like Amazon.
Here in this report the evaluation of Walmart's performance in terms of its competitive strengths,
its market position and also the areas where the company can focus to improve its value chain
has been discussed.
Competitive strengths of Walmart
There are some factors highlighted that placed Walmart ahead of its competitors and
motivate customers to buy their products.
Lower prices: One big advantage which makes Walmart competitive is its strategy of
keeping prices low. In its slogan where they promise to save its customer's money for better life
has been fulfilled by it through keeping prices of necessities lower than its competitors (Tan and
et.al., 2018,).
Customer services: Walmart always tend to focus on better service to its customers
through the provision of both online and offline access of products and services. Its after sale
services include return policy etc. and training programs for motivating its employees for
customer satisfaction has made them attractive in the market.
Cost effective operations: It enjoys good bargaining power as against its competitors
through proper management of human and knowledge resource. Investing in cost effective
technology and its scale of operations helps them in achieving economies of scale.
Market position of Walmart
Walmart enjoys a good position in the market due to its lower price strategy, better
customer satisfaction , supply chain management and its speed to expand worldwide. Its has
created goodwill and better brand image in the minds of customers.

It is being close to achieve monopoly in local grocery market. This has become possible just
because of its positioning strategy where they focus on lower prices to target large group of
customers. It has its presence in 28 countries with 11500 operational units along with that it has
sales growth of 3.7% as against its competitors. It has achieved a sales figure around 520bn USD
which is much bigger than its competitors. They have created a perception in the market that
their prices are lower than others that helps them in choosing their brand products and services
over its competitors. It has gained position ahead of its major competitors like Ali baba and
Amazon (Walmart - Statistics & Facts. 2020).
Need of improvements in value chain
Value chain includes all the activities right from the inception like procurement of raw
materials till the final sales of product and services.
There are some areas where Walmart can focus to improve its value chain:
Firstly, they can focus on more competitive activities and outsource less attractive one
which will be helpful in cost advantage over others and always create new entrants away from
the market due to the competitiveness and monopoly of one company both in terms of customer
base and cost effectiveness.
Walmart can strive hard for achieving joint optimization among the firms and units which
have same or closely related resource requirements.
Walmart needs proper and improved flow of information which is helpful grabbing and
exploiting new opportunities and also aid in demand and sales estimation. This information flow
would also be beneficial for customer to access product related information and quick responses
from the company side (LeCavalier, 2016.).
Part A (2)
Strategic Plan is a well designed document describing where the company is currently
and where it aspires to be in future. It shows the vision, mission, goals and objectives of the

company that it aims to achieve by developing competitive advantage in the market. It can play a
crucial role in growth and development of the business as it establishes clear direction for the
employees to respond to in order to achieve organisational objectives. An effective strategic
planning shall reflect all the opportunities available which can be captured by using its strengths
and the threats that are posed because of weaknesses of the company.
Walmart, a global leader in the retail industry has gained its current position by effective
and efficient strategic planning. The vision and mission statement of the company is considered
to be fundamental principles for the conduct of its operations. The fulfilment of its objectives is
attained by incorporating generic strategies in its plans with the help of various tools like Ansoff
Matrix, Porters five force model and VRIO etc. It has always focused on developing competitive
advantage to fight the competition in the market given by its various competitors like Amazon,
Whole Foods Market, eBay, Costco Wholesale, Home Depot etc (Gamble, Thompson and
Peteraf, 2010).
Vision statement of Walmart currently says that it wants to be a place where customer
can save their money in whichever form they want to shop. This vision that was formulated in
2017 has a complete customer centric approach. The aim behind such a vision is a flexibility in
the operations of the company which can ultimately lead to customer satisfaction. It highlights
that Walmart has build strategies to gain cost leadership in the market. Apart from that the way
of shopping is also freedom of customers in the sense it can be online or brick and mortar as per
their convenience.
Earlier the vision statement of the company used to describe its concern for both
customers and employees, by willing to rule the hearts and minds of both employees and
customers and establish as the leader. Now the shift in the vision discloses change in strategies
based on change in the market condition.
Mission statement of Walmart defines that its customers should save more, spend less
and lead a better life. The company's motive is clear that it wants to build price leadership in the
market by selling at lower prices than its competitors. This helps in attracting customers based on
selling point. The marketing mix of the company also states that it wants to sell at low prices to
gain the competitive advantage in the market and can acquire huge market share. The strategic
decisions of the company are taken then in direction of the mission. Apart from this it also

focusses that by saving its customers should improvise their standards of living. But the second
part of the mission can be argued upon as Walmart itself does not provide much pay to its
employees and also the human resource management is a bit poor (Casadesus-Masanell and
Ricart, 2010).
Objectives of Walmart recently are to meet up the growing demand of online and
electronic means where existing stores are refactored and better distribution network is formed.
Achieving their target of lesser wastages and harmful emissions, growing internationally by
establishing more stores, going green initiatives of the company and engaging with the
community etc. are some of the goals it wishes to fulfil shortly. This shall also contribute to
achieve the vision and mission formed.
Strategic Plan for Walmart-
The strategic plan for Walmart shall be prepared by using two of the tools namely Ansoff
Matrix and Porters Value chain analysis for justifying the strategic choices made.
Ansoff Matrix can be used as a strategic tool to determine growth opportunities associated with
the inherent risks. It has four segments-
1) Market Penetration- It has always been a focus for Walmart to penetrate into newer
market segments which it does by cost leadership strategy. The thought is to provide the
customer with all the products under one roof at the minimum possible prices. The lowest
prices it offers to the buyer has proven to be a core competency for Walmart. Its idea is to
maximise the market share rather than the profit.
2) Market Development- After a point the market penetration strategy no more works as it
then brings on cut throat competition to the business. So now comes in market
development as a strategy, which Walmart has done quite efficiently like it has expanded
its business into different segments, globally has established its stores in various growth
oriented countries and also from brick and mortar it has evolved to the online selling of
the grocery products.
3) Product Development- Walmart stands third in the expenditure made on R and D
facilities in order to achieve better technologies, equipments and skills to innovate the
existing product line. Many new up gradations and inclusions are done in the product line
and further strong marketing to make it successful.

4) Diversification- Diversification into new streams and industries that are completely
unrelated to its retail business has also been a strategy. It has diversified a lot over the
years according to growth potentials. For example Walmart Financials, a financial service
company and Vudu a video streaming company.
Porters Generic Strategies can be used to formulate an effective plan in which either Walmart
can gain competitive advantage by low cost or differentiation strategy.1) Cost Leadership- It is Walmart's main competitive generic strategy to sell its products at
low selling prices, and this only is its core competency which gives an edge over the
competitors. The company uses various techniques to minimise its cost like automation
of its operations, expenses towards human resource of the company, proper division of its
activities and optimal utilisation of resources.2) Differentiation- As Walmart is into more of price leadership, the differentiation strategy
shallows off. It decreases its prices to a large extent and is not much concerned about
differentiating its products and services from existing ones. Certain expense on research
is done that to for achieving lower prices as possible with the help of technology. Some
differentiation takes place in the product lines and in market share to be acquired.3) Focus strategy- Focus strategy is the company's strategy to serve some special target
segment and focus on it where they can generate more profits with lower costs and which
is less prone to competition. In this strategy whole efforts and resources are directed
towards that particular niche market only. Focus strategy again has two types which is
cost and differentiation focus strategy. From this Walmart has picked cost focus strategy
where they are concerned on gaining cost advantage by exploring alternatives for cost
effectiveness (Butuner, 2015. ).
Monitoring and controlling of strategic plan
For the better implementation of strategic plan it is very important to monitor it on timely
basis. Monitoring ensures achievement of the path of destination. Thus, it is required for every
company like Walmart needs to have an effective system in place to continuously monitor the
implementation phase in order to control deviations between planned and actual performance.
Walmart can have systems like benchmarking and variance analysis to monitor and control its
performance. For this they must be actively kept an eye on competitors act and reshape their plan

accordingly. As a market leader and to remain in the market above its competitor, continuous
monitoring and controlling of strategic plan is must, which includes whether the target audience
are satisfied or not, products are as per their requirement or not, competitors price movement and
customer services,etc. This all ensures that the plan and strategy made is generating the required
results.
Part B
CONCLUSION

REFERENCES
Books and journals
Tan, B.and et.al. 2018, December. The impact of blockchain on food supply chain: the case of
Walmart. (pp. 167-177). Springer, Cham.
LeCavalier, J., 2016.The rule of logistics: Walmart and the architecture of fulfillment. U of
Minnesota Press.
Gamble, J., Thompson, A. A. and Peteraf, M., 2010. Essentials of strategic management.
McGraw-Hill Publishing.
Casadesus-Masanell, R. and Ricart, J. E., 2010. From strategy to business models and onto
tactics. Long range planning. 43(2-3), pp.195-215.
Butuner, H., 2015. Systematic strategic planning: a comprehensive framework for
implementation, control, and evaluation. CRC Press.
Online
Walmart - Statistics & Facts. 2020. [ONLINE]. Available
through<https://www.statista.com/topics/1451/walmart/ >
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