WALLMART

CASE SOLUTION
1. What are the key issues?
There were following key issues/ problem with Walmart.
a. The employees and labor relations
b. The strict law and regulations of the government.
c. Lawsuits and all fines were also the main reason for the decline in its reputation.
d. The main issue was to grab the online market in which Walmart fails to attract its
customer because of the competitive market and availability of the amazon and Alibaba.

2. What is the market cycle of the case company?

Walmart is in the standard cycle market, it happen when the competitive advantage of the firm
are shielded moderately from the imitation. Walmart is in standard cucle market because of the
its economies of scale, they are focusing on continuous improving the quality as well as cost. It
has its own brand and also they have proprietorship rights.
3. Choosing the best alternative and your recommendations for Preferred Outcome?
- Walmart should give its more focus on online retailing it is a very good opportunity for
the Walmart to convert its opportunity to its strength.
- The growth in online retailing are quite high and there is a huge market available.
- Walmart should improves its HR functions to retain its employees.
- Should do the continuous reduction in its cost to be on the same strategy.

4. Pastel Analysis and any identify key factors.

Pestel define Identify/ Reasons Actions/ Strategies
Political/legal The political The labor laws
factor includes and regulations
regulations, which affects the
laws, tariff Walmart.
restriction, Penalties and
trade laws, fines for the
Anti-trust law corruption and
which affect bribes affect
the business negatively to the
Walmart.
Employees and
labor union
power also affect
its
reputation(critic
for fire of labors)
Economical These factors Recession affect
include badly to the
interest rate, wallmart.
inflation, Growth rate for
growth rate, the online
fiscal and retaining gives an
monetary opportunity for
policy which wallmart.
will affect the
company.
Technological These factor As online retailing Develop the strong online
also affect was increasing platform for the customer
business like people were to compete with amazon
new ways of transferring and Alibaba.
producing, towards online
distributing shopping which
and become a threat
communicatin as well as
g the product opportunity for
into the the wallmart.
market.
Socio-cultural These factors Customer Winning customers loyality
include behavior towards with online ordering and
demography, online shopping creating strong
education was increasing. positioning.
level, income
level, trend,
lifestyle etc.

5. Porter’s Five Forces Model.

Five Forces Define Identify/ Reasons Level Actions Strategies
Are
Threat of Low As wallmart offer almost Low
substitute Offer each and every products
products convenienc and its substitutes at low
e to prices.
customers
Threat of Low - They have the Medium-
new Easy to economies of scale High
entrants create an - High investment is
online retail required.
 store but - Threats of new
difficult to entrant are at the
reach at medium level if
Amazon’s any firm/company
level come with
Well innovation then it
established would create
and have problem for the
first mover wallmart.
advantage
which will
keep the
entrants
away
however
the low
entrance
cost may
encourage
them.
Bargaining Low As they purchase in the Low to
power of As it offers bulk quality form its moderat
suppliers diversified suppliers e
products No of supplier are
that show available in the market
Low switching cost for the
less
Walmart to shift from one
dependency to another.
on the
suppliers.
Bargaining Low As there are other High
power of It offers available stores in the
buyers variety and market
convenienc Low switching cost
e at low
price
Intensity of Moderate Amazon and Alibaba are High
competitiv There are the main competitor in
e rivalry less direct online retailing
competitors
 and they Costo, target and other
are market competitors are create
leader that competition among all in
will sustain the market.
the
competitive
rivalry low

6. SWOT ANALYSIS:
Opportunities: Online retailing.
Geographic expansion
Increase the no of products
Diversification to any other
products and services
Threats: Heavy competition
Technology development
Regulation in different
countries

Strength: Customer loyalty and equity

Its products and services
Low priced products
Globally available in the
market
Efficient supply chain
Weakness: Weak reputation in the
market
Lawsuits and fines for
corruption and bribes.

7. Competitive Advantage includes, what type of Resources when bundled to create

organizational capabilities
1- Tangible resources
i. Physical resources (Walmart has wide range of warehouses, stores and procurement
centers, and buildings)
ii. Organizational resources(company is having defined structure at which jobs are rightly
assigned and fully utilized under organizational leadership)
iii. Technological resources ( Walmart is technologically sound and equipped but still
needs some more work on developing this resource)
 iv. Financial resources( it sounds revenues and profits lets Walmart financially more
stable and competitive enough in market)

2- Intangible resources
i. Human resource (their human work force and managers are the assets and managing all
the functions worldwide , making Walmart a successful retail chain)
ii. Reputational resources (its worldwide presences and brand name, creates a unique
image and reputation for company.
8. What are the Four Criteria of Sustainable Competitive Advantage which the company uses
its resources and capabilities to get competitive advantage and why is it so successful in it?
a. Valuable: these capabilities exploit the opportunities and neutralize the threat, in this
case Walmart has also some valuable capabilities like, they have no of huge product
available, its cost strategy.
b. Rare: which can’t be possessed by everyone in the market, whereas in the case of
Walmart, their supplier’s poll, extreme low cost are the rare capabilities.
c. Costly to imitate: which cannot be copied easily.
d. Non-substitutable: These are the capabilities that can’t be substitute by others and
these are not possess by Walmart because other players are also possessing and having
the same kind of availabilities.
9. Define the purpose and identify the activities of company’s value chain?
Purpose:
a. To be number one in customer and consumer loyalty.
b. To be number one in operational excellence.
c. Increase Distribution Channels
Primary activities:
- Inbound: purchase from the supplier are done in bulk quantity.
- Operation: they have three categories(super cents, discount centers, neighborhood
stores)
- Outbound:
- Services: company accept the return good and feedbacks are also given.
Secondary:
● Procurement ( this is their major activity of procuring and purchasing material at lowest
cost for better price offering to their customers)
● Human resource management (continuous incentives, training & development to their
sales team and other staff members, hiring and firing operations etc.)
● Firm infrastructure( heavy product availability , better customers experiences and
ensuring better operations at firm level)
10. Describe Company’s Business strategic positioning and key business strategies
Walmart has low cost strategy, they are focusing on everyday low pricing strategy.
11. Develop a Competitive Profile Matrix (CPM)
Total Weight 1.00. Rating 1to 4

WALMART ALIBABA AMAZON

Critical Weight Rating Weighted Rating Weighted Rating Weighted
Success Score Score Score
Factors
Global 4 0.48 3 0.36 4 0.48
0.12
presence
Cost 4 0.8 2 0.6 3 0.6
leadership 0.2
strategy
Brand name 0.11 3 0.33 3 0.33 2 0.22
Store formats 0.15 4 0.60 2 0.30 2 0.30
Strong 3 0.36 2 0.24 3 0.36
0.12
suppliers poll
Effective 3 0.18 2 0.12 4 0.24
0.06
marketing
Strong 2 0.24 3 0.36 4 0.48
distribution 0.12
channel
Financial 3 0.36 3 0.36 3 0.36
0.12
position
Total 1.00 3.35 2.67 3.04

12. Develop External Factor Evaluation (EFE) Matrix

Total Weight 1.00. Rating 1to 4

Key External Factors Weight Rating Weighted

Score
Opportunities
1. E-commerce & online development 0.25 4 0.1
2. Gap in middle class market 0.12 2 0.24
 1. Growing online sales 0.1 3 0.3
1. Moving to the new formats development and 0.06 2 0.12
products like organic products
Threats
1. Technology & e-commerce giants presence 0.25 4 0.1
1. Environmental challenges and related regulations 0.1 2 0.2
1. Regulatory & community issues related to middle 0.12 2 0.24
class retailers
TOTAL 1.00 1.3

13. Develop an Internal Factor Evaluation (IFE) Matrix

Total Weight 1.00. Rating 1to 4
Key Internal Factors Weight Rating Weighted
Score
Strengths
1. Global presence 0.15 4 0.60
1. Strong store formats & availability of 0.1 4 0.4
every product
1. Huge store sizes with extreme low 0.12 3 0.36
pricing
1. Strong distributional channel 0.15 4 0.60
1. Low cost & effective operation 0.09 4 0.36
management
1. Suppliers ‘poll 0.1 3 0.3
2. Fast international expansion 0.08 3 0.16
Weaknesses
1. Lawsuits and labor issues 0.08 4 0.32
2. tough workplace environment causing 0.05 4 0.20
demotivation & turnover
1. Sometimes Products quality issues and 0.08 2 0.16
not on standards
TOTAL 1.00 3.46