Purpose: A case study of the environmental influences on Walmart

Presented on April 1, 2016 by:- Enestia Mudzingiri, Zimbabwe

- Gwyneth Grace Collado, Philippines- Liankanto Ranaivoson, Madagascar

The External and Internal Environments

Chonnam National UniversityGraduate School of Business,

MBA in Community Development and LeadershipSubject: Organization ManagementProfessor: Dr Darshana Karna

1. Milestones1 Founder:

Sam Walton (Bentonville) 2 1972: Public Opening at the New York Stocks Exchange

3 1990: N.1 retailer in the US ($26 billion in sales)1991: Globalization (Mexico City)

4 1999: Wal-Mart: largest private employer in the world (1.14 million employees)

5 2012: 50th anniversary

Source: dsmayer93.wordpress.com

Vision: "If we work together, we'll lower the

cost of living for everyone"

Mission: To help people save money so they

can live better

Slogan: Save Money. Live Better

Source: Market Realist

2. Overview

11,453

2015:11,453

(6,293 int.)

2005:5,289

1996:2,943

1979:276

1979:276

1962:1

Fortune500 Global 500 Ranked #1

(2015)

2,200,000 employees

(2015)

Revenue $485.651

billion (+2%)

Largest retailer in the worldGeneral

Merchandise

Operations- Walmart

US - Walmart

International

- Sam’s club- E-com

3. Where are we now?

Source: kevenroy.ca

DESCRIPTION OF THE TASK ENVIRONMENT

Online & on shop CompetitorsSubstitutes

Buyers

Complementors

Suppliers• 4 categories• Low bargaining power• Required to use RFID• 80% are from China

• Online & on shop• Small quantities• Discretionary individual• Middle-class (price-conscious)

Walmart’s wholesale club

External factors

• Global expansion and international retail markets

• Strategic alliance in acquiring rival firms

• E-commerce• Trend toward healthy eating• Rising acceptance of product label

• Intense competition (local, global)• Law and regulations: trade policy• Cultural barriers• Fluctuation in current economy

Source: http://careers.walmart.com

OPPORTUNITIES AND THREATS

Source: http://www.bloomberg.comSource: http://www.wikipedia.com

A. Fluctuation in employment rate

B. Increasing Minimum Wage

Buyers• Spending pattern • Number of buyers

Rivals• Intensive price

competition• Increase overhead cost• Force to apply efficiency

Suppliers• Force to reduce

profit margins• Focus on efficiency

and productivity to survive

Macro-Economic Trends

Impact of General Environment Trends to Walmart Task Environment

Source: www.forbes.com

Suppliers

Force to adapt/comply systems and

standards

Technology Trends

Online Market Share as of May 2015

Rivals

• Heightened competition

Impact of General Environment Trends to Walmart Task Environment

A. Development of e-commerce

B. Technology advancement

Source: Fortune.com

Buyers

• Convenient shopping• Change in spending pattern

A. Compliance to labour regulations

B. Trade and investment policies

Rivals• Inflict reputation damage

to Walmart and discourage buyers’ patronage

• Advantage on their growth

Political and Legal Trends

A. Global environmental sustainability

B. Lifestyle and culture

Buyers

Change in taste and preferences

Rivals• Small: expense burden

and cause default• Large: expense burden

& price competition

Socio-cultural and Environmental Trends

• Reduction Efforts of Walmart (2015):• 38% of one use plastic bags (10 billion bags annually since 2007)• 25.5% of packaging tray weight in Japan• 28.2% GHG eliminated by upgrading its fleet and use of

renewable energy

Impact of General Environment Trends to Walmart Task Environment

• Tastes and preferences

• Sources of income (employment/unemployment trend)

• Spending pattern

Rivals

Buyers

Sources Uncertainties

• Level of competitiveness (pricing, operation and efficiency)

• Competitor’s changing strategies

Sources of Uncertainties in Walmart Task Environment

Strengths S• Flat structure• Strong and unique culture-cost leadership• Competence in information system• Large scales of operations• Wide range of product and services• International operations

Weaknesses W • Self cannibalization• Involvement in multiple lawsuits • Behind rivals in online sales• Poorly prepared investment decisions• High employee turnover

Internal factorsStrengths and weaknesses

Decentralization of operations

Marketing strategy(EDLP, segmentation, saturation and cost

containment)

Global expansion strategy

3

2

Strategies to cope with uncertainty

1

4

Diversification and Portfolio

management

6

Centralized information system and integrated logistics

Backward integration

Source: www.walmart.com

5

Source: www.slideshare.net

For strategic decision making

Enhancing business and social ethics

Recommendations and conclusion

- http://careers.walmart.com/- http://corporate.walmart.com/- http://fortune.com/- http://www.scdigest.com/- http://marketrealist.com/- http://www.usanfranonline.com/- http://panmore.com- http://www.corp-research.org- https://bbb4m.wikispaces.com/- Hill and McShane (2008), Principles of Management.

References

Thank for your attention!