Management Principles: Walmart Analysis of Value Chain, SWOT, Porter's

This report provides a comprehensive analysis of Walmart, examining its operations through the lens of management principles. It begins with an illustration of Walmart's value chain, breaking down primary and secondary activities to understand how the company creates value. The report then conducts a SWOT analysis, identifying Walmart's strengths, weaknesses, opportunities, and threats. Finally, it applies Porter's five forces framework to assess the competitive landscape, including competitive rivalry, the bargaining power of buyers and suppliers, the threat of substitutes, and the threat of new entrants. The analysis incorporates information from Walmart's website and academic sources, offering insights into Walmart's strategic position and competitive dynamics within the retail industry. The report concludes with a list of references to support the analysis.

Running head: MANAGEMENT PRINCIPLES
Management Principles
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MANAGEMENT PRINCIPLES
Table of Contents
Illustration of Value chain of Walmart......................................................................................2
SWOT analysis of Walmart.......................................................................................................3
Porter’s five-force analysis of Walmart.....................................................................................4
Reference....................................................................................................................................6

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MANAGEMENT PRINCIPLES
Illustration of Value chain of Walmart
The value chain analysis of Walmart can be conducted by taking into consideration
the important elements of the concept.
Secondary activities
Firm infrastructure: The firm infrastructure is high with the existence of 2485
Walmart stores all over the world (Walmart.com, 2018).
Human resource management: Employees are provided with competitive wages and
benefits. Walmart also has a comprehensive recruitment programme that helps it to continue
and develop its business.
Technological development: Advanced technology links every activity of Walmart
with its supply chain with the effective use of e-business and electronic data interchange.
Procurement: A good relationship with the suppliers allows Walmart to keep a low
cost of material with the intake of standard products as mentioned in the supplier’s code
(Walmart.com, 2018).
Primary activities
Inbound logistics: Suppliers are the key stakeholders that provide success for
Walmart. The financial influence and firm size helps Walmart to negotiate with the suppliers
in terms of setting low prices.
Operations: The operations of Walmart are spread across 28 countries and the recent
growth of retail markets has helped Walmart in its development as well (Walmart.com,
2018).

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MANAGEMENT PRINCIPLES
Outbound logistics: Walmart uses its supply chain management practise called the
cross docking for managing the inventory it possesses.
Marketing and sales: The pricing strategy of Walmart is a key element for its
success. It uses the slogan “Save money. Live better” as its marketing strategy.
Services: Walmart stores maintain uniform prices and remain in operations for about
17 hours for 6 days a week and 11 hours on Sundays.
Figure 1: Value chain analysis of Walmart
(Source: Mudambi & Puck, 2016)
SWOT analysis of Walmart
Strength
 Large scale of operations
 Competence in the information
system
Weakness
 Law suits related to labour
 Huge employee turnover
 Less differentiation

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MANAGEMENT PRINCIPLES
 Diversity of products
 Effective cost leadership strategy
 Negative publicity
Opportunity
 Growth of retail market
 Ability to accept risks
 Develop a trend towards healthy food
habits
 Growth of online shopping
Threat
 Increase in competition all across the
world like Tesco, Woolworths and so
on
 Increase in the resistance of local
communities
 Rise of commodity prices
 Threat from local Government
Table 1: SWOT analysis of Walmart
(Source: Walmart.com, 2018)
Porter’s five-force analysis of Walmart
The five-factor analysis Walmart is provided below:
Competitive rivalry: The competitive rivalry is strong as it is faces threat from a large
number of similar retail organisations.
Bargaining power of buyers: This particular threat is weak for Walmart due to its
diverse products and a wide range of customers.
Bargaining power of suppliers: Similar to the buyers, Walmart maintains a healthy
relationship with its suppliers. Hence, this factor is weak.
Threat of substitutes: In the case of Walmart, the threat is weak as the quality
provided by Walmart can be difficult to match.

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MANAGEMENT PRINCIPLES
Threat of new entrants: This can be considered as a strong force as retail
organisations are growing at a rapid rate in the market. Hence, brand name needs to be
maintained.
Figure 2: Five force analysis of Walmart
(Source: Dobbs, 2014)
Competitiverivalry(Strong)Bargainingpowerofbuyers(Weak)Bargainingpowerofsuppliers(Weak)Threatofsubstitutes(Weak)Threatofnewentrants(Strong)

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Reference
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), 32-45.
Mudambi, R., & Puck, J. (2016). A global value chain analysis of the ‘regional
strategy’perspective. Journal of Management Studies, 53(6), 1076-1093.
Walmart.com (2018). Retrieved from https://www.walmart.com/