Wal-Mart updated5

Report
Team B
Michelle Barnes
Sharl Flowers
Alex Layton
Andrew Miller
Anh Linh Tran
I.
CURRENT SITUATION
II. STRATEGIC MANAGERS
III. EXTERNAL ENVIRONMENT
IV. INTERNAL ENVIRONMENT
V. ANALYSIS OF STRATEGIC FACTORS
VI. ALTERNATIVE AND RECOMMENDATION
VII. IMPLEMENTATION
VIII. EVALUATION AND CONTROL
A. Current Performance
•
•
•
Continuous growth in sales and earnings
Declining share prices
Great international expansion
B. Strategic Posture
1. Mission
•
Saving people money so they can live better regardless of
background or where they may live and to build a better life.
2. Objectives
•
•
•
•
“Increasing sales with low prices under one roof. “
“To be the very best in the business by putting the associates first.”
“Emphasis on everyday low prices, corporate growth, concern for
people, and loyalty to the company.”
“To increase
3. Strategies
4. Policies
1.
Board of Directors
13 members, eleven are outsiders.
B. 2 board members controlled close to 41% of the shares
outstanding.
C. Outstanding diversity
D. Each director attended at least 75% of meetings.
A.
2. Top Management
A.
B.
C.
Lee Scott was only the third CEO in the entire history of
Wal-Mart when he was selected to the position.
During the 12 years David Glass, the previous CEO held
the position, sales grew from 16 billion to 16.5 billion
annually.
Uniquely qualified individuals
A.
Natural Environment
1.
B.
One of the first retailers to embrace the idea of “green” marketing.
Societal Environment
a)
Economic
1.
2.
3.
b)
With quarterly losses in 2006, things still looked impressive for Wal-Mart
stores as international growth increased.
Rising fuel prices and terrorist attacks have cut into profits for the global
giant.
Global Markets continue to combine into the U.S. domestic market,
giving Wal-Mart a variety of options to carry out overseas activities.
Technological
1.
2.
Most sophisticated inventory control system
Carefully selected distribution centers that were also used as a network to
carefully analyze buying trends.
External Environment Cont.
c. Political-Legal
1.
2.
3.
4.
Increasing tension between employees and Wal-Marts low pay and stingy benefits has created an uproar
among former employees.
In 2003, raids on stores around the country found illegal immigrants working in their factories and stores.
Outsourcing has also been a key factor of concern between employees and customers in the U.S.
Customers were found to no longer pleased with the way Wal-Mart was conducting their business abroad
and in the U.S.
d. Sociocultural
1.
Geared towards the low-income customer.
C. Task Environment (Industry Analysis)
a)
b)
c)
d)
e)
f)
Wal-Mart has significant influence over its suppliers, therefore they are ready to supply.
Threat of substitutes is high and entry barriers are high
With companies such as Target, Costco, and other retail giants nipping at their heels, the rivalry in
such a business is tough at the top.
Specialty companies are cutting into Wal-Marts share of profits by providing specialized products,
such as companies like Burlington Coat Factory and Bass Shoes.
Bargaining power of buyers is high.
Relative power of other stakeholders is medium: Many groups and local communities have begun to
oppose the groups entry into markets where they have not been. Many organizations have been
active promoting fair labor and union laws for the companies employees.
A.
Corporate Structure
1.
B.
Corporate Culture
1.
2.
3.
C.
Structured into three business units, Wal-Mart Stores USA, Sam’s Club, and Wal-Mart
International.
Down to earth, and committed to being the very best there is from top to bottom
Culture comes from the Sam Walton spirit, or known as the philosophy that people are the way
to success from top to bottom.
Buying out companies overseas seems to be a way into international markets for Wal-Mart.
Resources
1.
2.
3.
4.
5.
6.
7.
Financially Stable and buying power
Organizational Structure
Logistics, inventory management, trucking fleet
Innovation and expansion strategy
Reputation and Brand name
Store location
Distribution Centers
Internal Environment Cont…
D. Capabilities
1.
2.
3.
4.
5.
Distribution centers and logistics
Point of Sales data through management
Production of products
Research and innovation
Exploits opportunities
E. Core Competencies
1.
2.
Ability to exploit opportunities
Distribution and logistics management
A.
Key Internal and External Strategic Factors (SWOT)
1.
2.
Strengths
a.
Management of distribution and logistics
b.
Exploitation of opportunities
Weaknesses
a.
Cultural roots in large cities and other countries
Customer satisfaction
Opportunities
b.
3.
4.
B.
a.
Inventory control system
b.
International Growth
Treats
a.
Low pay and stingy benefits for employees
b.
Specialty companies and rivals
Review of Mission and Objective
1.
2.
Mission is appropriate
The objectives are too vague and focus on what is/has taken place. They need to be more specific,
quantified and met in a specified amount of time.
A. Strategic Alternatives – pros and cons
1.
Horizontal Growth: expand operations into more international
locations and offer more fashionable merchandise both domestically
and internationally.
a.
Pros: Joint Ventures and acquisitions offer greater opportunity
into the international market.
b.
Cons: Wal-Mart has already entered quite a few international
markets and some of them have failed due to inadequate
geographical and demographical research.
Alternatives/Recommendation
Cont.
 2. Pause/Proceed-with-caution strategy: Wal-Mart’s
current strategies work but the result is less than
expectation. Therefore a pause strategy may be
appropriate.
 Pros: this give a temporary break (with a set time) to
review, make adjustment, and then proceed with all
the necessary tools.
 Cons: it may set performance activities in limbo
(especially with new hired managers) and may be
freeze (if sitting idling longer the needed time) or fall
into the wrong direction.
Alternatives/Recommendation
Cont.
B. Recommended Strategy
a pause/proceed with caution strategy for a short time
(6 months or less)
2. Proceed with horizontal growth strategy
1.
A. The way to increase profit further is to expand into
international markets.
B. Wal-Mart needs to enter into an agreement and enter
into the Australian market, which in turn could result
into a 15% increase in revenue for the company.
C. With the logistics system Wal-Mart has, implementing
this program would be very smooth for the company.
D. Wages and job relocation are delicate subjects to
consider for this move.
Implementation Continued
A. Acquisitions may be key to entering this venture into
Australia.
B. Developing a standard operating procedure will be
essential to making the joint venture work.
A.
B.
C. Continuing check and balance system, updating
information system and security software, preparing for
horizontal growth strategy.

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