Strategic Management and Business Strategy Report on Walmart Inc.

This report provides a comprehensive strategic management analysis of Walmart, a multinational retail corporation. It begins with an introduction to strategic management concepts and then delves into Walmart's background, mission, and objectives. The internal audit identifies strengths such as global size, effective supply chain, and IT competence, while weaknesses include operational inflexibility and challenges from competitors. The external audit explores opportunities like e-commerce growth and threats like economic downturns. The report employs various strategic management tools, including IFE, EFE, SWOT, Grand Strategy Matrix, BCG Matrix, and QSPM, to assess Walmart's competitive position and recommend strategies for improvement, particularly in addressing challenges in the European market. The analysis also includes recommendations for leveraging functional approaches and mitigating potential risks associated with cost leadership strategies. This document is available on Desklib, a platform offering a wide range of study resources for students.

Running head: STRATEGIC MANAGEMENT
Strategic management
Name of the student
Name of the university
Author Note:

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Table of Contents
Introduction......................................................................................................................................3
Background of the company............................................................................................................4
Current mission and vision:.............................................................................................................6
Objectives........................................................................................................................................6
Internal audit....................................................................................................................................7
Strength between 4 and 6.................................................................................................................7
Weaknesses between 4 and 6...........................................................................................................8
Internal factor evaluation...............................................................................................................10
External audit.................................................................................................................................12
Opportunities between 4 and 6......................................................................................................12
Threats between 4 and 6................................................................................................................14
External factor evaluation (EFE matrix)........................................................................................15
SWOT matrix analysis...................................................................................................................17
Grand Strategy Matrix of Walmart................................................................................................25
BCG Matrix of Walmart................................................................................................................30
BCG Matrix...................................................................................................................................30
Quantitative Strategic Planning Matrix (QSPM)...........................................................................34
External Factor Evaluation Matrix (EFEM)..................................................................................35

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Opportunities.................................................................................................................................37
Threats...........................................................................................................................................38
Internal Factor Evaluation Matrix (IFEM)....................................................................................39
Recommendations..........................................................................................................................40
Purpose Statement.........................................................................................................................41
Challenges in Europe.....................................................................................................................43
Strategies to avoid the Challenges.................................................................................................44
3. QSPM are implemented along the strategy lines and Functional Approach.........................45
References......................................................................................................................................48

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Introduction
Strategic management is considered as the establishment of main goals of the company in
order to achieve the objective of business. Strategic management is the process of implementing
the goal and initiative of management to achieve the objective and vision of the particular
company. Strategic management underlies on the available resources of the organization. It also
can be considered as the assessment of external and internal environment of the particular
company.
Hence, the first and foremost step of strategic management is to set a valid plan for the
company which can bring success in the long run of the business. In order to achieve future goal
and objective of the company, process of strategic management should be considered by each
company. After setting plan, next step is to assess the internal and external environment of the
company using different theoretical framework and model and matrix which can help to receive
a clear picture of the rival companies and industry. Last step of strategic management approach
is to recommend few better techniques to overcome present challenges.
In this case report, Walmart has been chosen as selected case study of strategic
management. Internal and external environment has been analyzed through Internal Factor
Evaluation Matrix, external matrix, BCG matrix and other relevant models. Existing issues have
been discussed with examples. A detail recommendation has also been given for the betterment
of the company.
Background of the company
Walmart is a big multinational corporation of retail industry of United States. Walmart
Inc operates a chain of grocery store, discount department store and hypermarkets. This company

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is the largest chains of supermarket in United States. Walmart operates in twenty eight countries
all over the world. It has 11,718 stores in the world. By revenue, this company is the largest
company.
Logo of Walmart
Source: Website of the company
This company holds variety of product ranges that includes products which are sold in
departmental stores, grocery products and many more. The business organization was established
in the year of 1962 and was incorporated in the year of 1969. The management of the business
organization generates approximately 480 billion US dollars per year and that makes it the
largest business organization in the world with respect to generating revenues. It is quite
astonishing that in recent times it is one of the most successful family controlled business
organization that has been immensely successful1. In the year of 2013, the business organization
1 Johns, Jennifer, et al. "Geography and history matter: International business and economic
geography perspectives on the spatial and historical development of multinational
enterprises." The Rise of Multinationals from Emerging Economies. Palgrave Macmillan,
London, 2015. 51-80.

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won the award of largest grocery retailer in the market of America as the 62% of the sales of
Wal-Mart came from the stores of the company located in America. It is seen that in the year of
1963, the management of the organization set foot on the stock market and they started releasing
shares of the market and later in by the year of 1989 the organization earned the name of the
largest company with respect to generating revenue2. The operations of the business organization
are divided into four parts and those are WalMart US, WalMart International, Sam’s Social Club
and Global E-Commerce. The management of the business organization offers numerous retail
formats throughout these divisions of the company and those involve; hypermarkets, cash-n-
carry stores, apparels, restaurants and many more3. It is seen that Walmart US is currently the
largest division of the business organization and that generates nearing 65% of the sales of the
corporation and WalMart US has three major retail formats in the market of America and those
are Discount Stores, Neighborhood Markets and Super Centers. Since the year of 2006, the
management of the organization has initiated a pilot program for selling generic drugs at 4
dollars per prescription and that program was initially launched at the company’s stores located
in Florida, Tampa and within the next year the program expanded to all the retail stores of the
2 Johns, Jennifer, et al. "Geography and history matter: International business and economic
geography perspectives on the spatial and historical development of multinational
enterprises." The Rise of Multinationals from Emerging Economies. Palgrave Macmillan,
London, 2015. 51-80.
3 Gassmann, Oliver, Karolin Frankenberger, and Michaela Csik. "Innovation Strategy: From new
Products to Business Model Innovation." Business Innovation: Das St. Galler Modell. Springer
Gabler, Wiesbaden, 2016. 81-104.

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company. In the year of 2007 the organization also launched a movie download service though
that wing of the organization somehow failed to experience profitability and thus was
discontinued in the next year of its initiation. It is a matter of fact that in the financial of 2015,
the organization reportedly earned more than 480 billion US dollars and out of that the
international operations generated mighty 40% of the sales. Thus it is seen that global reputation
of the organization is immense. The managerial board of the organization constitutes of fifteen
board members and the management of the organization is in the hand of the family that makes it
interesting.
Current mission and vision:
The business organizations mission and vision is to become the best retailer in the minds
and hearts of the customers of the company and also for the employees of the business
organization.
Objectives
One of the major strategic objectives of the management of the business organization is
to maintain the operational costs of the company as low as it is possible. Apart from that the
management of the corporation aims to reduce the other expenditure of the organization and they
want to attain economies of scale in order to support the generic strategy of cost-leadership.

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Internal audit
Strength between 4 and 6
In this section of this report the strengths of the business organization is incorporated. It
is seen that the global organizational size of the company, highly effective and global supply
chain are the pillars of strength of the organization in contemporary times. Not only that the
management of the organization has achieved a core competence utilizing the Information
technology wing of the company in order to support the international logistic of the organization.
For an example, it can be said that the IT wing of the company allows seeing how the individual
goods of the company are performing country wide and store by store at a glance. The global
organizational size of the business organization allows the company to have a firm financial
stability to fund and back up the continuous growth and expansion of the company4. The
international supply chain of the company also allows the management to show resilience
towards some of the market specific risk factors. Apart from that the highly efficient supply
chain of the business organization allows the management of the company to utilize highly
advanced technologies to control and track the products which ar moving from the suppliers to
the stores. It can be said that a dedicated strategy regarding the human resource management of
the company gives the management a competitive advantage in the market full of competition.
Incessant training and developmental programs arranged by the HR officials of the company
allows the organization to have an employee base that is highly effective and it has potentially
4 Gassmann, Oliver, Karolin Frankenberger, and Michaela Csik. "Innovation Strategy: From new
Products to Business Model Innovation." Business Innovation: Das St. Galler Modell. Springer
Gabler, Wiesbaden, 2016. 81-104.

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increased the overall organizational performance. Above all, it has been seen that Wal-mart hs
developed and expanded significantly over the last few decades and has seen an international
expansion that helped the management to earn a global recognition that has effectively increased
the brand value of the company; and it is a matter of fact that brand value can manipulate the
buying choices of the consumers and that has rightly helped the company to increase their
profitability substantially5.
Weaknesses between 4 and 6
There are some factors of weakness for the management of the organization too and the
management should deal with those issues with caution. In this regard, it can be said that the
organization has invested in various sectors as food, clothing and stationary products. Whereas
the competitor organizations do not dell a range of products which comes from different sectors
that allows them to focus on the flexibility in the operation of their businesses6. Thus, it can be
said that the management should focus on how to make the operations of the company more
compact and flexible to gain the competitive advantage in the market steeped with rivalry. In the
market of North America, the management of Wal-mart is currently facing some challenges from
5 Galbraith, Jay R. Designing organizations: Strategy, structure, and process at the business unit
and enterprise levels. John Wiley & Sons, 2014.
6 Johns, Jennifer, et al. "Geography and history matter: International business and economic
geography perspectives on the spatial and historical development of multinational
enterprises." The Rise of Multinationals from Emerging Economies. Palgrave Macmillan,
London, 2015. 51-80.

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the competitor companies like K-mart and target. Apart from that many small scale companies of
North America has been able to do good business and has already captured a niche customer
base. Thus, Wal-mart needs to work on those factors in order to regain their competitive
advantage in the domestic market. in recent days Wal-Mart is one of the largest retailer of
grocery goods and successfully controls the empire, but lack in effectiveness of the IT wing of
the company can effectively expose the management to face some major issues, thus the
management of the organization should engage in effective advancements in the IT wing of the
company. There are some other weaknesses of the company that are refraining the organization’s
ability to face the challenges and these weaknesses are related to the strategy of the organization
to attain success in the global and domestic market of operation. As the management of the
organization tends to use cost leadership strategy, it exposes the organization to some risk factors
and those are mentioned below. The management currently sees thin profit margins and the
model strategy of the organization can easily be copied. As the management of the organization
follows a strategy of cost leadership, it makes it easy for the other business organizations to copy
their model strategy and give them a good competition be it in the domestic or in the
international market of operation. On the other hand, the thin profit margin of the organization is
an archetypal effect of utilizing the strategy of cost leadership and it minimizes the selling prices
and minimizes the profit margins of the company7.
7 Gassmann, Oliver, Karolin Frankenberger, and Michaela Csik. "Innovation Strategy: From new
Products to Business Model Innovation." Business Innovation: Das St. Galler Modell. Springer
Gabler, Wiesbaden, 2016. 81-104.

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Internal factor evaluation
IFE (Internal factor Evaluation) matrix is a tool of strategy formulation that is utilized to
evaluate the weaknesses and strengths of the business organization. in this regard it can be said
that IFE matrix is vital to understand the factors that are included rather than the actual numbers.
Thus it can be said that intuitive judgment would be essential to develop the IFE matrix8.
The first column of the matrix jots down the weaknesses and the strengths of the company and
this matrix should incorporate at least 10 to 20 key factors relevant to the topic of discussion.
The second column of the matrix weights to each and every factor that ranges from 0.0 to 1. (0
not important and 1 is very important)9. More weights should be given ti the internal factors that
have more influence on the overall performance of the business organization. It should be
mentioned that sum of all weights should be equal to 1. The third column of the matrix rates all
the factors ranging from 1 to 4, and it should be mentioned that 1 stands for significant
weakness, 2 means minor weakness, and 3 and 4 stand for minor and major strengths of the
8 Galbraith, Jay R. Designing organizations: Strategy, structure, and process at the business unit
and enterprise levels. John Wiley & Sons, 2014.
Galbraith, Jay R. Designing organizations: Strategy, structure, and process at the business unit
and enterprise levels. John Wiley & Sons, 2014.
9 Johns, Jennifer, et al. "Geography and history matter: International business and economic
geography perspectives on the spatial and historical development of multinational
enterprises." The Rise of Multinationals from Emerging Economies. Palgrave Macmillan,
London, 2015. 51-80.

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company. The fourth column of the matrix calculates the weighted score by multiplying every
factors score by its rating. Finally the total weighted score must be found by adding the scores to
each and every variable.
Strengths Weight Rating Weighted score
Shopping under one
roof
0.15 4 0.60
Financial position 0.10 3 0.30
Image of the brand 0.12 4 0.48
Range of services
provided
0.10 4 0.40
Customer oriented 0.13 4 0.52
Weaknesses
Inadequate mission
statement
0.08 2 0.16
Speed of depart lines 0.10 2 0.20
Do not have
developmental facility
0.06 1 0.06
Top management of
wal mart is dominated
0.08 2 0.16
Undifferentiated
services and products
0.08 2 0.16