STRATEGIC MANAGEMENT FINAL EXAM

ASSIGNMENT
STUDY OF WALMART INC.

Prepared by
Delita Kusuma Gading
43116010284

Universitas Mercu Buana

Jakarta Barat
2019


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CONTENTS

Definition……………………………………………………………………………..…….3
Study of Walmart………………………………………………………………..………….3
Company CSR and Mission………………………………………………………..……….4
Walmart Global Responsibility Report…………………………………………….….….4-8
External Environment………………………………………………………………………8
Walmart Core Competence………………………………………………………….…….10
Walmart SWOT Analysis………………………………………………………………10-12
Walmart Value Chain Analysis…………………………………………………………….12
Strategic Analysis and Choice…………………………………………………………13-14
Long Term Objectives…………………………………………………………..…………14
Generic and Grand Strategies………………………………………………………….14-15
Short Term Objectives……………………………………………………………….……15
Functional Tactics……………………………………………………………………..16-17
Policies Empower Action……………………………………………………………..17-21
Strategic Control and Continuous Improvement…………………………………………20
Conclusion…………………………………………………………………………….20-21
References……………………………………………………………………………..…22


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Definition

Strategic management involves the formulation and implementation of the major goals and
initiatives taken by an organization's top management on behalf of owners, based on
consideration of resources and an assessment of the internal and external environments in
which the organization operates.

Strategic management provides overall direction to an enterprise and involves specifying the
organization's objectives, developing policies and plans to achieve those objectives, and then
allocating resources to implement the plans. Academics and practicing managers have
developed numerous models and frameworks to assist in strategic decision-making in the
context of complex environments and competitive dynamics.[5] Strategic management is not
static in nature; the models often include a feedback loop to monitor execution and to inform
the next round of planning.

Michael Porter identifies three principles underlying strategy:

• creating a "unique and valuable [market] position"
• making trade-offs by choosing "what not to do"
• creating "fit" by aligning company activities with one another to support the chosen
strategy
Corporate strategy involves answering a key question from a portfolio perspective: "What
business should we be in?" Business strategy involves answering the question: "How shall
we compete in this business?"
Management theory and practice often make a distinction between strategic management and
operational management, with operational management concerned primarily with
improving efficiency and controlling costs within the boundaries set by the organization's
strategy.

Strategy without implementation is just a plan, therefore implementation of strategic

management should be conducted correctly. Implementation is the process that turns
strategies and plans into actions in order to accomplish strategic objectives and goals.
Implementing your strategic plan is as important, or even more important, than your strategy.

Study Observation of Walmart Inc.

Walmart Inc. (formerly Wal-Mart Stores, Inc.) is one of the largest retailers in the world in
terms of revenues and number of employees. With millions of employees worldwide, the
company is an example of effective human resource management. From its beginnings in
Arkansas in 1962, the company developed its retail business with sound financial strategies
to achieve its current global position in the industry.

Walmart’s corporate mission and vision statements define the fundamental guiding principles
of the business. In this regard, the company’s success is linked to its effectiveness in fulfilling
its vision and mission. Such fulfillment involves implementing an appropriate generic
competitive strategy (Porter’s model) and related intensive growth strategies (Ansoff Matrix).

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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.

Company Mission and CSR

Walmart Inc.’s corporate mission is “to save people money so they can live better.” This
statement reflects the ideals of the company’s founder, Sam Walton. Strategic decisions in the
business are a direct manifestation of this mission statement, which is synonymous to the
company’s slogan, “Save money. Live better.” Based on this statement, it is clear that
Walmart’s business strategies involve using price as a selling point to attract target
consumers. The significance of such a selling point is exhibited in many of the company’s
strategies. For example, Walmart Inc.’s marketing mix or 4P involves low prices as a strategy.
Other areas of the company are determined by the need to minimize selling prices as a way to
achieve competitiveness.

Walmart fulfills the “save people money” component of the mission statement through its low
selling prices. For example, consumers save money by spending less in buying goods from
the company’s stores, compared to buying the same or similar goods from midscale and high-
end stores. However, it is not yet clear if the company satisfies the “live better” component of
this corporate mission. There are criticisms regarding very low wages that pose challenges for
Walmart’s employees when it comes to improving their lives, in addition to various human
resource management issues in the organization. There are also criticisms about the long-term
economic effects of the company’s large-scale sales of cheap imported goods.
In my perspective, contrary to Walmart’s statement that they want to build the community
where Walmart stores are, and this other resource statement proves that Walmart has not fully
reached their CSR report of the providing great jobs to the people. This need to be improved
if they want to gain more success in the industry of retailer because if people especially their
employees are disappointed with Walmart’s performance and combined with the competitor
thriving, people will eventually left Walmart to another company that treat their employees
better.

Walmart 2018 Global Responsibility Report

OPPORTUNITY - Increasing Economic Opportunity

Providing great jobs and inclusive advancement in retail

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Three-quarters of Walmart U.S. store management teams began as hourly employees. In the
U.S., where approximately 90 percent of the population lives within 10 miles of a Walmart
store or Sam’s Club, Walmart is a source for advancement in thousands of communities,
providing a wide variety of career opportunities for people of every background.

Walmart offers a wide range of opportunities where the only requirement is a work-ready
attitude. By removing barriers to entry, Walmart gives workers, especially hourly workers,
the chance to learn important—and transferable—job skills, while earning a paycheck.

Growing a local and inclusive supply base

Walmart aims to use our purchase orders, supplier relationships and philanthropy to foster a
more inclusive supply base that creates economic opportunity for individuals and their
families while driving economic growth. For example, we promote local manufacturing
innovation and growth in the U.S. In emerging markets, we are committed to helping
improve the livelihood of small producers through improved market access, skill
building and training in business acumen.

We also believe that our purchase orders should reflect the diversity of our customers and the
communities around the world where we live and work. We strive to grow the number of
products and services sources from diverse-owned businesses in all of our markets.
Our work in building an inclusive supply chain includes the following:
• Investing in American jobs
• Supporting small producers in emerging markets
• Sourcing from women-owned and diverse businesses

SUSTAINABILITY - Enhancing Sustainability in our operations

Reducing greenhouse gas emissions

In October 2016, Walmart became the first retailer to set an emissions-reduction plan
approved by the Science Based Targets initiative, in alignment with the Paris Climate
Agreement. The Science Based Targets initiative is a collaboration of leading global climate
change and conservation groups that help companies determine how much they must cut their
GHG emissions to prevent the worst consequences of climate change.

Reducing Waste

In 2005, Walmart began to look at the interplay of waste and usable materials and to seriously
examine our own operations, looking for ways to reduce waste of all kinds. Today we have a
deeper understanding of the challenges and are engaging suppliers and customers in pursuit
of the circular economy, in which products are made, consumed and recycled in a continuous
loop. We look to the Ellen McArthur Foundation approach of maintaining materials at their
best and longest use.
By the end of 2017, we diverted from landfills 81 percent of unsold products, packaging and
other waste materials in the U.S. and 78 percent globally*. Total annual waste generated from
operations in the U.S. in 2017 has decreased by 1 percent, compared to the 2016 amount.

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SUSTAINABILITY - Enhancing Sustainability in our value chains
Promoting Responsible Sourcing

Walmart has a large, geographically diverse supply chain that includes more than 100,000
suppliers around the world. Our sourcing efforts can help support local and small farmers,
foster growth of women-owned business and encourage the growth of small business. While
some value chains are generally subject to effective regulation and oversight, others can
present higher potential risks to worker dignity. In 1992, we formally launched our
Responsible Sourcing program to establish our expectations for suppliers and their facilities
in regard to operating sustainably and responsibly in a way that protects worker dignity.
Today, we have nearly 190 Responsible Sourcing associates around the world working with
our suppliers and enforcing our standards.

Our longstanding commitment to promoting safe, healthy and coercion-free work

environments was renewed when our president and CEO Doug McMillon spoke at the Net
Impact Conference in 2016. There, he shared our company’s goals for 2025—including our
goal to support the dignity of workers in the retail value chain. We are already engaged in
multiple supply-chain efforts, and by 2025 we will use our ability to bring together
stakeholders—including industries, civil society, governments and international organizations
—to address major potential risks to the dignity of workers in a minimum of 10 retail supply
chains. This commitment goes above and beyond our existing work to hold suppliers
accountable to our high standards. Please visit our responsible sourcing website to learn
more.

Reducing Environmental Impact

In the retail sector, our environmental impact extends far beyond retail operations, up and
down the value chains that deliver food, apparel, electronics and many other products to
customers every day. Farming, for example, plays a major role in GHG emissions, water
usage and deforestation.
As a global retailer, we are working to help reduce environmental impacts, from the farm to
the factory to the customer and at the end of the product life cycle. We hope to help create a
more circular economy, moving away from a take-make-dispose approach to one where
resources are preserved in production, and the materials and other component parts are
ultimately recycled back into the economic stream. Working with suppliers, customers,
nonprofit organizations and others, we’re drawing on our strengths—such as our store and
logistics infrastructure, our philanthropy and our connection to customers—to pursue
practical initiatives that we hope will start to build a stronger value chain and a more circular
economy.

We use three key strategies as we work to reduce environmental impact:

• Reducing emissions
• Achieving net zero deforestation
• Eliminating waste

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Providing Access to Affordable, Safer, Healthier Food and Products

At Walmart, our customers trust us to provide access to affordable, safe and healthier
products for them and their families. We work continuously to earn that trust by advocating
for them among suppliers and encouraging innovation and transparency in product
development and production.

We follow four key strategies to foster safer, healthier products in supply chains:
• Enhancing food choices
• Promoting food safety
• Advancing sustainable chemistry
• Fostering animal welfare and responsible antibiotic use

Supporting Measurement and Transparency

Customers have high expectations. They want to feel good about the products they buy. They
are asking for more visibility into how food is grown and products made, as well as
information about the people and companies involved in those processes. Measurement and
transparency can help us deliver on those customer needs.
Measurement and transparency can also enable transformation of value chains upstream and
downstream by, for example, helping to flag hot spots or assess the impact of one practice
versus another. We are working with others to improve measurement and transparency; it is
the right thing for our customers, for society and our business.
Measurement and transparency foster customer trust and can help accelerate sustainability
improvements in supply chains.
We follow three key strategies as we work to improve measurement and transparency:
• Driving change with the Sustainability Index
• Driving adoption of targeted measurement tools
• Providing better information to customers

COMMUNITY - Strengthening Local Communities

Relieving Hunger
Hunger is a reality for many families around the world. The United States Department of
Agriculture (USDA) estimates that in the U.S. alone, more than 41.2 million people face food
insecurity, which it defines as limited or uncertain access to adequate food. At Walmart, we
are dedicated to the fight against hunger and are determined to help families who need ready
access to nutritious food. To achieve long-term impact, we aim for whole system change.
Walmart and the Walmart Foundation have made significant progress toward the goal we set
in FY2015 of providing 4 billion meals over five years to people in need. Since FY2015,
Walmart has donated over 2.5 billion pounds of food from Walmart stores, Sam’s Club
locations and distribution centers including more than 675 million pounds of food in FY2018
—over half of which was fruits, vegetables and meat.

Providing Disaster Relief

Over the past year, many of the communities in which Walmart operates suffered disasters,
from earthquakes in Mexico and China to major wildfires in California and Canada, flooding

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in Peru and hurricanes that swept across the southern U.S. and Puerto Rico. In each case,
Walmart and the Walmart Foundation responded quickly to help support the local
communities that were hit hardest.

In times of disaster, Walmart aims to support the communities in which we do business, as

well as the safety and well-being of our associates, by bringing to bear our logistics
capability, technology, ability to source products, physical locations, associates and scale.
As with all our efforts, we aspire to improve entire systems, not just respond in the moment.
Walmart and the Walmart Foundation support efforts to help communities respond more
quickly and effectively in the wake of disasters. We also invest in technologies and other
innovations that help communities better prepare for disasters. In FY2017, Walmart and the
Walmart Foundation pledged $25 million in cash and in-kind donations to support disaster
preparedness and relief through FY2021. Recognizing the unprecedented impact of disasters
during 2017, Walmart and the Walmart Foundation have given well beyond the initial pledge,
providing more than $38 million in FY2018 alone.

Supporting Communities
Walmart’s 2.3 million associates are residents, neighbors, friends and relatives in thousands
of towns around the world. We aim to strengthen the health of our communities, not only by
providing products, services and jobs through our retail business, but also by facilitating
associate volunteerism, local donations through stores and customers, and support for
strategic diversity and inclusion initiatives.

We believe that strengthening local communities creates a virtuous circle of value for
business, as well as society. Inclusive, vibrant communities support business growth, which
creates additional opportunities for associates. In turn, having associates and customers who
are better engaged leads to more inclusive and vibrant communities.

Supporting Veterans and Military Families

Founder Sam Walton was fresh out of the army, where he served as a captain in WWII, when
he opened his first store. Walmart has always welcomed U.S. veterans into our workforce; it’s
part of our history. We know the value veterans bring to our business and to our communities.
Walmart has committed to hire 250,000 veterans by 2020.

External Environment of the US Retail Industry:

Walmart is at the helm of the US retail industry followed by the likes of Costco and Best Buy.
Several reports on the economic output of the US retail industry have showed that it is the
lifeline of the US economy. Apart from its large contribution to the national GDP, the retail
industry is also known for being the largest employer in the American economy. The retail
industry has been through challenging phase and it has seen various ups and downs in the
past decade. Growth has returned since after the recession. A few things that have kept
growing important in the context of the retail industry are technology, operational efficiency
and customer orientation. Sales in the retail industry are expected to have surpassed $28
trillion by 2020. Retail has also grown at a whopping speed challenging the growth of
traditional retail with Amazon at the helm of the commerce growth globally. The US retail

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industry is also the largest employer in US that employed more than 29 million people in
2012. These were the people employed directly in the retail industry whereas the figures can
be far higher and past 40 million if we include the people it employs indirectly. Apart from
that, as per 2012 figures it generated 1.2 trillion dollars in employment directly. Walmart,
Kroger, Costco and the Home Depot are some of the brands that hold the largest market
share in the US Retail industry.

Porter’s Five Forces Analysis of the US retail industry:

The US retail industry is made up of a large group of small and big retail brands. Walmart
and Costco are leading in the retail industry with their low prices and large assortments of
merchandise and services. While the US retail industry is marked by heavy competition,
growth in the recent years was primarily supported by higher digitization and better economic
activity. This is Porter’s five forces analysis of the US retail industry.
Bargaining power of suppliers:
The bargaining power of suppliers in the US retail industry is low. The big brands like
Walmart & Costco buy in bulk and are able to press the suppliers for lower prices. Moreover,
apart from a few of the bigger brands the smaller suppliers do not hold any major clout. They
are bound to offer their products on lower prices or risk losing business. There are more than
one lac small and big businesses that are the suppliers of Walmart. Moreover, the suppliers
are required to follow the rules set by the business. The immense bargaining power of the big
retailers like Walmart also comes from their financial clout.
Bargaining power of buyers:
Control is in the hands of the customers or the buyers in the 21st century. Retail brands are
doing every thing to keep their customers happy and satisfied. Apart from everyday low
prices, retail brands like Walmart are also focusing on better customer service as well as
leveraging technology to provide a better and personalized customer experience. Some of the
factors that moderate the bargaining power of the buyers are the brand image, low prices,
quality products and services and high level of customer service. The overall bargaining
power of customers in the retail industry is moderate to high. The bigger brands like Walmart
and Costco enjoy higher loyalty.
Threat of substitute products and brands:
The threat of substitute products in the retail industry is high because of the high number of
retail brands in the market. The threat gets moderated in case of the larger brands like
Walmart and Costco because of their competitive advantage in the form of lower prices and a
wider product assortment.
Threat of New entrants:
The threat of new entrants is moderate because it will not require a very large investment for
a new brand to enter the retail market and it is why several foreign brands are also in a race to
enter the US market. However, in case of the bigger brands this threat is low because of the
high level of loyalty that they enjoy as well as their international presence. The overall threat
remains moderately low. In case of the large brand like Walmart or Costco, switching costs
can be high for customers since all brands do not sell at as low prices.
Level of competitive rivalry in the retail industry:
The level of competitive rivalry in the retail industry is very high. There are several
influential and financially strong players in the market like Walmart, Krogers, Costco and
Bets Buy. Apart from them, there are hundreds of small and big players adding to the

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intensity of competitive rivalry including the e-commerce giant Amazon. The overall
competitive rivalry in the retail industry is highly intense.

Walmart Core Competence:

The core competence of Walmart is its everyday low prices that it has used to grow its market
share by increasing customer base. The brand offers a large range of good quality products
and services and that too at very low prices which can sometimes be much lower than the
nearest competitor. In this way the brand has been able to obtain very high level of customer
loyalty. Its low prices and high focus at customer service have helped the brand build an
image of America’s friendliest retail brand. Walmart buys in bulk from its suppliers which
allows it to obtain products at extra low prices and it passes on the benefit to the customers.
Its another core competence is customer service. Its customer centered business strategy also
focuses on high degree customer convenience. Higher customer convenience means higher
popularity and faster growth in customer base. A third core competence that is enabling its
growth in the recent years is technology. Walmart is investing in e-commerce and purchased
a large stake in Indian brand Flipkart apart from its own website in 28 countries. These are
some of the main sources of competitive advantage. In past Walmart was known to pay its
staff very less to minimize its operational costs and to protect its price advantage. however,
its financial strength allows it to retain its advantage while paying its staff well. During the
recent years, it increased the basic wages as well as benefits for its associates.

Walmart SWOT Analysis: 2018

Strengths:
• Strong financial performance – Walmart’s fiscal year ends at January 31st and it is when
the brand publishes its annual report. In 2018, the brand crossed the 500 Billion dollar mark
in terms of revenue for the first time. Net sales of the brand reached past 495 Billion. Fiscal
2018 has been very good in terms of financial performance. Compared to the last year,
Walmart’s revenue rose by around 15 Billion dollars.
• Large assortment of quality products and services – The primary strength of Walmart is its
pricing strategy and apart from that its wide range of quality products and services. Its
merchandise mix consists of three main categories that include grocery, health and wellness
and general merchandise. The general merchandise include entertainment, apparel, hardline
and apparel products. Apart from these Walmart offers fuel and financial services and
related products.
• Brand image – Overtime, Walmart created a customer friendly brand image. This is a major
strength for the brand which has helped it acquire higher popularity as well as increase its
market share and customer base. Its low pricing strategy and customer orientation have
made it America’s most favorite retail brand.
• Market share and large customer base – Walmart’s pricing strategy and quality have helped
it acquire the largest market share of all the US retail brands.
• International presence – Walmart’s international presence has continued to grow stronger in
thee years. India is still not open to Foreign direct investment but Walmart entered the
Indian market by buying a large and controlling stake in the Indian e-commerce brand
Flipkart. Apart from US, Mexico is the largest market for Walmart with the number of
stores there in 2017 at 2411. Its 2018 revenue from Walmart International was 118.1 Billion
dollars.

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• Growing e-commerce and digitization – Walmart took its first step in E-commerce in 2000
and since then it has come a long way and its commerce initiatives cover a large number of
markets. Its several websites operate under 65 banners in 28 markets. Growing focus on e-
commerce and digitization are also going to help the brand acquire faster growth.

Weaknesses:
• HR issues – One major problem with Walmart and its organizational culture since always
has been that the brand has been trying to cut down on operational costs to grow its price
advantage. However, this has a negative effect on the human resources and drives attrition
rate high. During the recent years, Walmart has increased the wages but yet, the HR
environment and culture at Walmart needs to be innovated to provide the workers with
security and satisfaction.
• Negative image of a large finance hungry corporation – However, friendly Walmart may
be to its customers, it has also acquired the image of a finance hungry corporation that is
eyeing a larger pie of the retail market continuously. This image happened because of its
poor record in supply chain and HR. While it has managed its reputation and image
somewhat better during the recent years, it will need to focus more on CSR, ethics and HR
management to shed its old image completely.

Opportunities:
• Growing e-commerce operations – E-commerce can be a major area of opportunity for the
Walmart brand. Apart from US all the major markets including the ones in Asia Pacific are
seeing higher sales online. Moreover, focusing on its online channels will also help
Walmart combat Amazon’s challenge.
• Changing consumer shopping habits – The demographics of the global population are
changing and the shopping habits of the millennial generation are much different from that
of the baby boomers. However, studying these habits and catering to their needs offers
faster opportunities of growth to the brand. This generation of consumers likes to shop
online and is a high tech savvy generation. Understanding its shopping habits and using
technological innovation to provide it with a better shopping experience will help increase
sales.
• HR Management – This is also an area where Walmart needs to innovate to establish
culture that encourages creative, collaboration and innovation. It will help the brand
manage a better reputation and create a positive work environment which is good for
productivity.

Threats:
• Intense competition from other retail and wholesale brands – Retail industry is marked by
intense competition and there are several retail and wholesale brands. the competitive
pressure from the online brands like Amazon has also kept increasing which has led to
Walmart focusing more on technological innovation and lower prices. Competition is one
of the biggest challenges in the retail industry and a primary threat to growth. To overcome
tis pressure, Walmart will need expand to more markets and increase its online presence.
• Increased legal and regulatory pressures – The legal and regulatory pressures have
increased in the retail industry and this has led to brands focusing more on compliance.

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 This increases the compliance related expenses and in case of non compliance the fines can
be immense.
• Stronger dollar internationally affecting profits – Economic factors too have a major impact
on the profits of the international brands. A stronger dollar can have an adverse impact on
the profit of the American brands. Fluctuation in the currency exchange rates can lead to
lower profits.

Walmart Value Chain Analysis

Walmart’s excellent value chain is also an important reason that the brand has been able to
grow its business successfully. the value chain includes al the activities starting from product
conception to marketing, sales and after sales service. All these stages add value to the
product and managing them efficiently helps a brand grow its business performance. The
Value Chain Analysis tool was introduced by Michael E Porter. Walmart has optimised its
value chain very well. Here is an analysis of the primary and support activities down
Walmart’s value chain.

Primary Activities:
Inbound logistics:
Walmart has a large and global supply chain that consists of more than 100,000 suppliers of
various sizes. These suppliers are located al around the globe from which Walmart sources
the products that it sells at its stores and clubs. Since it buys in bulk from its suppliers, it is
able to press them for lower prices. The fresh category products are sourced from the
suppliers located close to its stores and clubs. Walmart has managed its supply chain very
well with the help of technological tools including apps and software.
Operations:
Walmart’s business is arranged into three main categories -Walmart US, Walmart
International and Sam’s club. In 2018, its total number of stores reached 11718. Out of the
total, 5358 were located in US and 6360 were located internationally. It serves its customers
under 65 banners in 28 countries through its stores and e-commerce websites.
Outbound logistics:
Walmart has managed an excellent and extensive distribution network. “For fiscal 2018,
approximately 78% of Walmart U.S.’s purchases of store merchandise were shipped through
our 157 distribution facilities, which are located strategically throughout the U.S.” Remaining
of its merchandise was shipped directly from the suppliers. Walmart has managed an
excellent private fleet of trucks but also hires private careers to ship perishable grocery
merchandise. It also has 30 dedicated fulfillment centers that it uses to ship merchandise to its
customers that have purchased from its online platform. Walmart uses its distribution centres
for cross docking the material received form the suppliers which can then be forwarded to the
stores. Apart from reducing the transportation and storage costs, it also reduces inefficiencies
in the system and Walmart stores are replenished easily and immediately.
Marketing and Sales:
The brand has gained very high level of popularity because of its consistently low prices but
apart from its brand image, it also actively invests in marketing. In 2018, it spent 3.1 billion
dollars on advertising which was 0.2 Billion dollars higher than the previous year. It is using
advanced technology in new ways for marketing its brand more efficiently and to grow its
sales as well as serve its customers better.

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Support Activities:
Human resource Management:
Walmart has made some major improvements to its HR strategy during the recent years.
Apart from having raised the basic salary for its associates, it is also spending on their
training and development.
Procurement:
Walmart has managed trustful long term relationships with its suppliers who provide standard
quality products and do business according to the requirements mentioned in the Code of
conduct for the suppliers.
Firm Infrastructure:
The infrastructure of any organization plays a key role in the success of that firm. Walmart
has built a very large infrastructure that includes its management, supply chain, human
resources, its distribution and fulfilment centers and more. Apart from excellent management
of its technological and financial resources now it is focusing on managing its employees
better to be more successful. It has kept increasing its investment in technology and people
during the recent years considering their importance for the faster growth and success of the
brand.

Strategic Analysis and Choice

The most important business strategy which is at the core of Walmart’s business philosophy
and which it has used since ever for business expansion and for growing its market share is
highly competitive pricing. This strategy is known as EDLP or Every Day Lowest Prices.
This is also the thing that Walmart is most known for. It is known for helping Americans save
money, buy more with their money and live better lives. On the one hand it buys in bulk from
most suppliers grabbing the lowest prices from them and then passes this advantage on to its
customers. This is an effective strategy because in the retail industry which is intensely
competitive, this can be the best method of differentiation. This is also who Walmart has
differentiated its brand from the other retailers in US.

Another key strategy used by Walmart is that of quality. It sells only good products because if
you sell low quality products at lower prices than you will be unable to generate a
competitive advantage. So, Walmart sells the right quality products at affordable prices.
Lower pricing strategy helps create a competitive advantage which is sustained through good
quality products.

To further strengthen its competitive advantage Walmart focuses on customer service and
better customer experience. This helps retain its customers and also create a positive word of
mouth which works to attract new customers. Good customer service is like an essential in
the 21st century where all the power rests in the hands of the customers.
Walmart is also eyeing faster business expansion and it has strategically acquired a few
brands that can help its brand expand faster. In 2018, it acquired Modcloth and Bonobos.
Apart from them India is a potentially big but a bit complex retail market where a direct entry
would not have been possible for Walmart. However, it acquired a large stake of around 70%
in the Indian e-commerce brand Flipkart thereby making its entry into the Indian market.
Such strategic acquisitions can enable Walmart to grow faster in the Asia Pacific region. Its

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total number of stores worldwide has reached 11718 and out of these 6360 are of Walmart
International.

Long Term Objectives

20 Sustainable Commodities by 2025

Walmart chose our initial list of commodities based upon business risk and opportunity (e.g.
size, supply security, cost issues, reputation risk, potential to differentiate, etc.); the nature
and magnitude of environmental and social issues (as suggested by Sustainability Index data
and feedback from stakeholders); and Walmart’s ability to convene suppliers and others to
promote change. For each commodity, Walmart is working to understand the current state of
the supply chain and is developing a strategy to enhance sustainability. We then work with
stakeholders to promote action to help address major social and environmental hot spots
while creating shared value. It will take all of us working together—retailers, suppliers,
NGOs, governments and others—to drive lasting, high-impact sustainability improvement.

Walmart 2025 agenda for reducing waste and driving towards circular economy:

• Achieve Zero Waste** in our own operations in Canada, Japan, the U.K. and U.S. by
2025.
• Continue working to divert waste in all other markets, moving as fast as infrastructure
and best practices allow.
• Aiming for Zero Waste** in our operations in Canada, Japan, the U.K. and the U.S.
means we have set a goal that is intended to go beyond the Consumer Goods Forum
Food Waste Resolution relating to halving the food waste*** in our own operations
by 2025 (vs. 2016 baseline).
• Work with suppliers and customers to prevent products and materials from becoming
waste upstream and downstream in pursuit of a more circular economy.

Generic and Grand Strategies

Generic Strategy

The primary generic strategy that Walmart has used to build sustainable competitive
advantage is the cost leadership strategy. A firm using this strategy mainly focuses on keeping
the prices of its goods and services lower than the competitors. Walmart is mainly known for
its everyday lower prices. How Walmart has kept the everyday prices low is through
economies of scale. It has built strong long term relationships with the vendors from whom it
buys in bulk. It helps the brand obtain the best deals on the purchases it makes from its
suppliers. Long term relationships with the suppliers are mutually beneficial for both the
parties. Apart from these things it has also maintained low operational and production costs.
Coupled with them, excellent supply chain management and logistics management have
helped it reduce costs of operation. In the past Walmart was known for paying very low
wages to its employees. However, owing to prolonged protests and criticism the brand has
raised the minimum wages for its employees. Now, the situation at Walmart is much better.
However, the brand has sustained its advantage and that’s why it is a leader among the

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retailers. This has not just helped it sustain the image of a brand obsessed with low prices but
also generate huge sales and revenue.

Grand Strategy
Market Penetration:
Market penetration involves selling more of the existing products and services to the existing
customer base. Walmart started as a small discount retailer in Rogers Ark. Since then it has
opened thousands of stores in US. It has kept the prices of products it sells lower than its
competitors since always. This does not just give it an edge over the competitors and help it
grow its sales over these years but also helps it grow its brand name and attract more and
more customers. The benefit has been double for Walmart whose lowest prices and best deals
are famous Many also call it US’ most friendly retailer because you can find the best deals
and discounts and least prices at Walmart. As a result its customer base has is very large and
has kept growing rapidly over time. To grow its popularity and customer base, Walmart has
also introduced app and websites so customers can shop with ease and convenience. When
customers find more convenience and better prices they will shop for more and this is the
primary growth strategy Walmart has utilized.
Market development:

This is another important strategy that Walmart has continued to employ to develop its
markets and grow its customer base. Apart from US, Walmart has also expanded its presence
internationally. Today, it operates in 28 countries and has more than 11,700 retail units
running under 59 banners. Through these 11,700 retail stores, Walmart employs more that 2.3
million globally. Out of them, 1.5 million are employed across US alone. This international
expansion has helped the brand and its sales grow vastly. In all these areas Walmart is popular
owing to its low pricing scheme. Out of the 28, its e-commerce units are operational in 11
countries. In this way, Walmart continues to bring value to its customers and communities
globally. It also uses various store formats like super centers, discount stores and
neighborhood markets that it utilizes based on the need of the communities in which it
operates.

These are the two main intensive strategies utilized by Walmart for creating growth and
profits globally. Its focus on product development or diversification has remained relatively
minimal. Overall, Walmart has grown to become a celebrity retail brand and even sorted out
its HR issues nearly. In past it has been accused of paying its employees less and making
them do more. However, there have been positive developments during the recent years and
the company has increased the minimum wages to nearly the same level as its competitors.
However, its competitive advantage and long term strategy both have played an important
role in helping the brand find supple growth.

Short Term Objectives



Walmart have an objectives that they call “Three-Year Growth Plan”
Walmart Plan
Be the first to deliver a seamless shopping experience at scale no matter how you choose to
shop at Walmart it will be fast and easy. (Combination of: In stores, Online and Mobile).

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Growth Target
Over the next three years, Walmart project they will add approximately $45 - $60 Billion new
sales.

Walmart Strategy
Winning with stores: keep offerings relevant and convenient invest in our people.
Deepening digital relationships with customers: continual improvement of experience and
apps integrate digital to enhance store experience.
Adding critical capabilities: next gen supply chain, technology and data, talent and ways of
working.

5 Growth Areas
1. Delivering value, price leadership / private brands.
2. Providing convenience, e-commerce online grocery smaller formats.
3. Being great merchants, fresh, natural and organic food / health & wellness / GM &
Apparel.
4. Key in geographies, North America and China.
5. Appealing to a blend of income levels, fresh food / online grocery / e-commerce.

Functional Tactics
Focus on Quantity

By offering low prices Walmart can fight competitors. Corresponding

with the slogan "Always Low Price"
Walmart always tries to keep the price of its products cheap as much as possible by large-
scale production. The study says that when new-Walmart competitors are opened, they can
reduce prices on household goods by 7-13%. Walmart focuses on wholesale sales techniques
that can save 25% of the money spent rather than buying retail.

Merchandise Variety
The types of products offered by Walmart are very diverse and have the type of choices that
are convenient for consumers. Some other marketing strategies are carried out by Walmart:
• Walmart Online Marketing Campaign
• Develop a logo and sign / new sign regularly
• Introducing a new inventory with a response system
Financial Strategy 

Research And Development (R&D) Strategy
More sophisticated information technology

Technology development by testing the use of the iPhone to reduce the length of the queue.
This system can help consumers come to the cashier just to pay, no need to wait for the
barcode scan one by one.
The trial developed a system for checking shopping records with stock in Walmart with a
smart phone.

Operation Strategy

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Delivering Variety In One Location

This strategy focuses on providing the basic needs of the community, for example: in one
branch of Walmart open MC D in it and salon and other daily needs, while in other branches
Walmart opens Subway or Dominos pizza at its restaurant.

Strategy expansion

By operating more than 2285 stores in 2006, Walmart has purchased products from 70
different countries and 20% of this business is conducted outside the US.

Logistics Strategy

Human Resource Management (HRM) Strategy

Offers a different better service

The company found strength in how to call employees by calling "associations" rather than
salespeople. The associations had good standards by serving from the beginning of the
consumers to come until consumers finished shopping like at first greeting, giving directions,
direct conversations short and solid but friendly. Associations will encourage the maintenance
of the highest standards of honesty, morality and business ethics in dealing with the public.

Information Technology Strategy

With a fully operational computerized internal system, the sophistication of technology will
be the main bridge for Walmart's operational examples of the technology used. In distributing
system goods owned by Walmart, it is connected directly with the central supplier, therefore
the risk of loading goods will be less.

Policies Empower Action

Animal Welfare - Swine Assurance Position

Walmart and Sam’s Club will continue to only accept fresh pork from animals raised under
the standards of the National Pork Board’s (NPB’s) Pork Quality Assurance (PQA) Plus
Program.

Farm animals provide an important and nutritious source of protein. Animal science plays a
central role in guiding these practices, but does not always provide clear direction.
Increasingly, animal welfare decisions are being considered through a combination of science
and ethics.

Antibiotics are used in farm animals to treat, control and prevent disease and to promote
growth. In the United States, antibiotics must be approved as safe and effective by the U.S.
Food and Drug Administration. Walmart support public reporting of antibiotic use. Walmart
also support consistency of on-pack product claims in order to ensure clarity and usefulness
of information to the customers and members.

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Conflict Minerals Policy
The Securities and Exchange Commission (“SEC”) has adopted rules requiring publicly
traded companies to report on products they manufacture or contract to manufacture that
contain tin, tantalum, tungsten or gold (“3TG” or “conflict minerals”) mined in the
Democratic Republic of the Congo and adjoining countries (“DRC Countries”) under
circumstances that contribute to or support human rights violations.

Deforestation Policy
Walmart understands that our aspiration to deliver more sustainable products means
leveraging our position as a trusted retailer and brand to help protect forests and biodiversity,
while working to reduce our carbon footprint. We believe we can deliver the greatest impact
by creating a higher demand for zero net deforestation products, supporting and enabling
transparency, and investing in sustainable sourcing regions.

Fur Friendly Policy

Walmart U.S. and http://Walmart.com 1P has a fur friendly policy in place. We do not sell
products containing the actual fur of an animal. The following products are excluded from the
policy: wool products, shearling and skin (e.g. leather, calf-hair leather, sheepskin and
lambskin).

Global Anti-Corruption Policy

Walmart Inc. and its subsidiaries and affiliates worldwide (collectively "Walmart" or the
"Company"), are committed to maintaining the highest possible ethical standards and
complying with all applicable laws. In all of its operations, Walmart seeks to avoid even the
appearance of impropriety with respect to the actions of any of its officers, directors,
associates, employees, agents or representatives. This policy prohibits corrupt payments in all
circumstances, whether in dealings with government officials or individuals in the private
sector.

Government Relations Policy

• With respect to fundraising, the following rules shall apply in addition to all
applicable laws: Officers of Walmart may distribute political literature or engage in
political solicitation, as approved by an Executive Vice President.
• Associates assigned to the Corporate Affairs Department may engage in political
solicitation or political distribution, as approved by the Executive Vice President of
Corporate Affairs.

Price Match Policy

We will match Walmart.com and Jet.com base price, for identical items purchased in a
Walmart store.
• The customer must inform the associate of the price
• The item must be currently in-stock on Walmart.com at the time the Price Match is
requested
• We reserve the right to verify the price and the availability of the identical item (i.e.,
size, model, quantity, brand, or color, etc.)

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 • · If the register prompts for supervisor approval, the supervisor must verify the price
and availability of the identical item (i.e., size, model, quantity, brand, or color, etc.),
by logging onto the Walmart.com website through a store terminal, before the price
will be matched.
• We reserve the right to limit quantities to one-per-customer, per item, per day
• Quantities are limited in New Mexico only for the purchase for resale

Privacy Policy
• How and why we collect your personal information;
• How your personal information is used and protected;
• When and with whom we share your personal information; and
• What choices you can make about how we collect, use, and share your personal
information.

Seafood Policy
At Walmart, we value our relationships with the seafood suppliers who are dedicated to
providing the highest in quality and safety through practices that promote sustainable
fisheries and social responsibility. We know that seafood is an important source of protein,
nutrition, and income for people all over the world. Therefore, we aspire to find our
customers safe, affordable, and sustainable seafood that does not negatively affect global
communities or the environment. Our goal is to build transparency and continuous
improvement in the seafood supply chain so that we can build confidence and provide for our
customers now and in the future.

Restructuring, Reengineering, and Refocusing the Organization

In early 2018, Walmart announced to cut more than 1,000 corporate jobs. The layoffs are
expected to be completed by Jan. 31, 2019 and will focus largely on employees in its
corporate headquarters in Bentonville, Ark. The stores facing cuts either have lower sales in
those departments or are increasingly relying on contract workers from wireless carriers to
sell cellphones. In addition, Walmart is adding 800 new e-commerce assistant managers at
higher-volume stores.

The leading retailer is also developing a new information-driven "prototype" distribution

center to boost efficiency and accuracy even further and is exploring the use of alternative
transportation methods, including rail, to move some of its products.
Walmart is making a major effort to re-engineer its supply chain and increase the accuracy
and efficiency of its logistics operations.
Among the areas the company is working on with merchandise and equipment vendors are
using universal product code cases for identification, put away and tracking; cutting lead
time, and using rail and truck transportation.

Walmart Shifting Its International Focus From West To East, Sale Of Asda To
Sainsbury's Shows
This week, Walmart announced that it will merge its U.K. operation, Asda, with British
grocery rival Sainsbury’s. Walmart will hold a 42% stake in the new company, but, in
practice, this marks its retreat from the U.K. market in the face of fierce competition from

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discounters Aldi and Lidl. The move apparently also reflects a refocusing of Walmart’s global
operations under its new International CEO, Judith McKenna, who was appointed in January.
In short, Walmart International looks to be shifting its focus from West to East:
• The company has been in negotiations to sell its Walmart Brasil unit to buy out firms
with Latin American experience, Reuters first reported in January.
• Walmart is widely reported to be in advanced negotiations to acquire a majority stake
in Indian e-commerce marketplace Flipkart.
• In China, Walmart has operated under a strategic alliance with JD.com since 2016,
and last month, Walmart opened its first small, high-tech supermarket in the country,
in Shenzhen.

Strategic Control and Continuous Improvement

Walmart has redefined and rewired many of the ways it touches shoppers, focusing on layout,
convenience, new media and sustainability. Just a few examples of the retailer’s new
approaches are:
• Walmart’s “Win, Play, Show” merchandising strategy has improved the efficiency of
assortment and merchandising investment.
• “Fast, Friendly, Clean” demonstrates Walmart’s renewed focus on speeding up
checkout time, ensuring associates are friendly and providing a less cluttered
shopping experience.
• A leader in recognizing the potential of new media, Walmart has created the
ElevenMoms network of influential bloggers. In addition, multiple beta sites on
Walmart.com focus on issues and solutions important to shoppers, and its presence on
Twitter, Facebook and LinkedIn touch younger shoppers tapping into social media.
• Walmart’s aggressive sustainability goals include becoming 100 percent supplied by
renewable energy, creating zero waste and selling a greater range of sustainable
products.

Conclusion

Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large discount
department stores. Sam Walton, founder of Walmart, opened his own discount and retail store
in Rogers, Arkansas. The popularity of the stores grew so much Walton open the first
Walmart in 1962 and the store just grew beyond any one’s imagination. From there Walton
open more and more stores the moving over seas and finally in the year 2000 Wal-Mart was
listed for the first time in the “Fortune 500” list of the world’s biggest corporations. In Sam
Walton gives the responsible of Walmarts success by being able to successfully sell products
to customer to satisfy their personal needs with good prices.

One of the biggest reasons why Walmart one of the largest retailers in the world is because of
the used of supply chain management. The supply chain management used is an IT-based
system which is vital to make sure the inventory is precise. It tracks inventory and
information among the business process and the company as a whole. Walmarts supply chain

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management system focuses on squeezing every penn possible out of the supply chain so
Wal-Mart can sell their products as cheap as possible.

Walmart overall Cost Leadership and Bottom-line initiative is the foundation for the reason
why the store is one of the largest retailers. Walmart’s slogans of “Always Low Prices!” And
“Every Day Low Prices” accurately describe the strategy of overall cost leadership.

Walmart supply chain management based on IT-technology is very looked down upon it the
industry because it drives excess time and unnecessary costs out of the supply chain. Wal-
Mart can buy low, and sell even lower than all the other companies in the industry today.

Wal-Mart became the first major retailer to demand manufactures use radio frequency
identification technology (RFID). The technology used radio frequencies to transmit data
stored on small tags attached to pallets or individual products. RFID tags hold significantly
more data than bar codes.

What I learned is the business of saving people money Walmart will do about anything to try
and make that happen because that was the true goal of Sam Walton when he opened his first
discount store in Rogers, Arkansas. The way that Walmart will keep being the number one
retailer is by the use of technology. Stay one step ahead of all the other companies in
technology and Wal-Mart will continue to grow and dominate their field.

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REFERENCES

https://en.wikipedia.org/wiki/Strategic_management
http://panmore.com/walmart-vision-mission-statement-intensive-generic-strategies
https://corporate.walmart.com/global-responsibility/global-responsibility-report
https://www.cheshnotes.com/strategic-analysis-of-walmart/
https://corporate.walmart.com/2018grr/sustainability-in-our-value-chains
https://www.cheshnotes.com/2017/06/walmart-generic-and-intensive-strategies/
https://corporate.walmart.com/policies

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