Question

In a narrative format, discuss Wal-Mart from a strategic perspective. Discuss Wal-Mart’s strengths and weaknesses? Information concerning recent changes in the firms is readily available online and should be accessed. Strategic issues should be discussed in “real time.

Answer 1

Walmart Inc. (formerly Wal-Mart Stores, Inc.) is one of the largest retailers in the world in terms of revenues and number of employees.Walmart’s corporate mission and vision statements define the fundamental guiding principles of the business. ). The generic strategy and intensive strategies grow Walmart’s business and ensure its competitive advantages, to achieve goals based on the specifics of the corporate vision and mission statements.Walmart follows its vision statement and mission statement through the cost leadership generic strategy (based on Porter’s model) that builds competitive advantage in dealing with competitors, such as Amazon.com Inc. and its subsidiary Whole Foods Market, as well as Costco Wholesale, eBay, and Home Depot. Various intensive growth strategies like market penetration and market development contribute to Walmart’s success in following its mission and vision.

Walmart value chain analysis

Porter value chain analysis is a systematic tool for business activities developed by Michael E Porter of Harvard Business School to create sustainable value and competitive advantage to the business process as a whole. Walmart is market leader for its cost leadership strategy. Value chain analysis of Walmart is chain of activities from concept and raw material of product to its sales & marketing and customer service. These activities are further classified into primary and supporting activities which indulge cooperation from suppliers in to provide their customers with goods whenever and wherever they want at suitable pricing thus supporting their tagline “Save Money, LiveBetter”.

Walmart human resource management

Walmart is in Fortune’s 100 Best places to work list though in past it faced severe criticism for poor human resource management and surpassed that phase. There is open communication between employees and organization to promote new ideas, take risks and to strive for excellence. It focuses on employees’ career development by providing competitive wages and comprehensive benefits like medical coverage, vacations, holiday pay etc. The employees are taught that the customer is always right and to replicate the same.

walmart business strategy

Cost leadership strategy of Walmart revolves around being lowest cost company in its domain creating unique products that customers will be ready to pay at its best price. Focus Strategy is further segmented into cost focus strategy and differentiation strategy and hence it focuses on targeting a particular segment in their domain by modifying the products or services according to the need of consumers.

Walmart strength

Walmart’s strengths are all related to the size of its business. These competitive strengths enable the company to withstand threats despite its weaknesses as a low-cost retailer. For exploiting global expansion opportunities, Walmart’s strengths for further global growth are:

a. Global organizational size

b.Global supply chain

c.High efficiency of supply chain.

Walmart’s supply chain has high efficiency because of advanced technologies for monitoring and controlling the movement of products from suppliers to its stores.

Walmart weakness

weaknesses are directly related to the company’s generic strategy and its implications in business development, capabilities, resources, and profit margins. Walmart uses the cost leadership generic strategy, which leads to the following weaknesses:

a.Thin profit margins

b.Easily copied business model

c.Competitive disadvantage against high-end specialty sellers.

Walmart reflect business vulnerability to innovative competitors and disruptions in the industry environment, especially in the presence of major e-commerce firms like Amazon.Thin profit margins are a typical effect of using the cost leadership strategy. Because Walmart minimizes selling prices, it also needs to minimize profit margins and rely more on sales volume. The cost leadership strategy also makes Walmart’s business model easy to copy. The firm does not have significant competitive differentiators, except for its business size and prices.