Executive Summary
- Wal-Mart company report;
- Threats affect company’s operations;
- Internal and external environmental analysis;
- Report aimed at maximizing strengths;
- Report aimed at reducing weaknesses.
Wal-Mart is the biggest retailer in the United States of America. The company has developed a reputation of selling its products at low prices despite the fact that the market has been unstable. The retail giant dominates the industry and has over the years overshadowed its rivals in market share. However, Wal-Mart has been faced with various threats whose effects, if not well addressed, could adversely affect the company. To address this challenge, this report includes a strategic plan that can be implemented to effect change in the company. The strategic plan will include an analysis of both the internal and external environments in which the company operates. The goal will be to identify opportunities that need to be exploited, the strengths that need to be maximized and the threats and weaknesses that it needs to be cautious about. The analysis will also give a detailed report of the company’s background to give a deeper understanding of its operations.
Company Background
- Wal-Mart is America’s leading retailer;
- Established in 1962;
- Has stores in every State;
- Has more than 2.2 million employees;
- Targets lower and middle-class markets (Spicer & Hyatt, 2017).
Wal-Mart is America’s leading retail company. Established in 1962, the company has grown for more than a century and today has a presence in every state in the U.S. It also has a strong market share in Canada and employs more than 2.2 million people. Currently, the company’s headquarters is in Bentonville in the United States of America. Its first store was located in Rogers, Arkansas. Wal-Mart’s target market is low and middle-income people. This market is in line with its low-cost pricing strategy, which avails goods to customers at an affordable price. The low-cost strategy is largely responsible for its popularity in America and around the world. Indeed, today, the company is not only regarded as the world’s leading retail shop, but also the biggest corporation in the world.
Vision Statement
- To save money.
- To facilitate competitive strategies.
- Is future-oriented.
- Vision is relevant and holistic (Laszlo & Cescau, 2017).
The success of a business or an organization depends on the growth strategies that help it to penetrate the market and establish itself as a formidable competitor. Vision statements often guide the process of market establishment. They also outline the objectives that an organization intends to achieve through its decision-making processes. In this regard, such a statement boosts employee morale because it makes them aware of their responsibilities and roles in the organization. This way, they focus on meeting their objectives. The vision statement of Wal-Mart is to provide a platform where people can save money, regardless of the quantity of goods they buy. This vision statement was adopted during the company’s 2017 community investment meeting. It is meant to support strategies that will meet the demands of the competitive retail market. It is also future-oriented to align with the growing interest of e-commerce around the world. Wal-Mart’s vision is also holistic because it includes all stakeholders.
Mission Statement
- To save money.
- To enable customers to live better (Hill, Jones, & Schilling, 2014).
- To cater to customers’ financial needs.
An organization’s mission is a short statement that explains the overall purpose and goal of the firm. The mission statement explains the types of products organizations intend to supply to their consumers and the kind of services they plan to provide. Company mission statements also explain the scope of organizational operations, such as the geographical areas covered in the provision of services. More importantly, a mission statement helps employees and customers to identify with an organization. The mission statement of Wal-Mart Company is to help people to save money and live better and fulfilling lives. It is also embedded in the company’s business strategy, which is to use price to attract customers.
Value Statement
- Respect for customers.
- Strive for excellence.
- Service to customers.
- Integrity.
The core values of the Wal-Mart Company focus on a respect for customers, service to clients, valuing integrity, and striving for excellence. The world’s leading retailer is focused on maximizing profits and being the best retailer in the industry. However, to achieve these goals, it has to create a good reputation amongst its customers. A good brand image is likely to improve its performance, thereby boosting the company’s success because many customers will perceive it favorably.
Environmental Analysis
- Internal Environment:
- Strengths,
- weaknesses,
- opportunities, and
- threats.
- External Environment:
- Political,
- Economic,
- Sociocultural,
- Technological,
- Environmental, and
- Legal.
The internal environmental analysis of Wal-Mart shows that it has a good competitive advantage because of its strong brand name. The company also sells its products at a relatively low price compared to its rivals and has a large pool of financial resources to pursue its strategies. One of the main weaknesses of the company’s plan is its focus on opening many stores, as opposed to promoting its products. This weakness has the effect of undermining the quality of its services. A deeper assessment of Wal-Mart’s internal environment shows that it has not fully embraced the use of e-commerce and has a weak infrastructure for obtaining customer feedback. Nonetheless, Wal-Mart has a good mastery of competitor intelligence and can use it as a tool to improve its competitive position. However, the reform of tax laws is a threat to the realization of this opportunity.
Comparatively, a focus on the company’s external environment shows that Wal-Mart has tried to embrace technology through business automation, data back-up, and information analysis using tech-based strategies. The e-commerce platform has also allowed the company to market and sell its product online. The healthy lifestyle trend is the biggest sociocultural force affecting the company because many customers are buying healthier and organic products. At the same time, the company has been producing environmentally-friendly goods. Lastly, the company has exploited a stable economic and political environment in most of its markets to make profits. However, tax reforms could threaten its success because the revenue generated could decrease as a result.
Long-term Objectives
- To increase economic opportunities.
- To enhance stability.
- To strengthen communities.
Wal-Mart’s long-term objectives are centered on increasing economic opportunities, enhancing the organization’s stability, and strengthening communities. To achieve these goals, the company intends to increase the economic mobility of women and people of color, the use of renewable resources, and expand opportunities for participating in community building or empowerment programs.
Strategic Analysis and Choice
- Creating value for customers.
- Providing valuable and quality products (Gilling & Ulmer, 2016).
- Advancing payments and financing production (Ahmadi et., 2016).
There exist several strategic choices at different levels in the Wal-Mart Company. The strategic choices can be analyzed to form a basis of understanding and knowledge. One of the strategic choices at the business level of Wal-Mart’s business is to provide value to customers through the provision of affordable products. The giant retailer also has a choice to ensure that whatever products their customers consume are valuable and of good quality because they should impact the lives of the consumers positively. This goal can be achieved by adding quality through the value embedded in the product. This strategic choice enables the company to compete favorably with other organizations and be able to outdo other substitute commodities. Based on these assertions, Wal-Mart’s strategic analysis and choices are centered on creating value for customers by selling quality and affordable products. The company also pays its suppliers in advance and finances its production process internally. This plan supports its operations by ensuring there is a continuous supply of products and services in its stores.
Plan Goals and Implementation
- To dominate the retail market (Banerjee, 2015).
- To pursue growth and expansion.
- To have more specialized branches.
- To market and advertise the brand (Bushnell, Drucker, Abell, & Hammond, 2015).
The competitive strategy of Wal-Mart is to dominate all industries in which it operates. Its success is measured by the competitive advantage it maintains over its rivals. To maintain this edge, the company’s management is building more retail outlets and embracing new innovations that are intended to facilitate the achievement of its strategic goals. This competitive strategy is being implemented by observing the company’s values. At the same time, its strategic goals are transformed into actions through the effective implementation of its marketing and advertisement strategies.
Financial Projections and Analysis
- Increase net sales by 40%.
- Open 1,000 online grocery locations (Chatterjee, 2017).
- Spend $11 million to digitize stores (Martínez, Galván, & Alam, 2017).
Wal-Mart intends to increase its net sales by 40%, open 1,000 online grocery stores to support its technology strategy, and spend $11 million to digitize its stores. The financial projections of the company have a long-term impact of transforming the firm and building on its competitive advantage to increase its market dominance.
Critical Success Factors (CSF)
- Increase in-store and online grocery sales.
- Broad financial service offerings (Banerjee, 2015).
- Dominance of Pet Products Market.
Wal-Mart has three critical success factors. The first one is high online sales numbers because the company has established an online shop for groceries as a means of managing increased competition from rivals. The second critical success factor for Wal-Mart is its broad financial services. The company plays a vital role in the financial sector by influencing the traffic of the money within its stores. Lastly, Wal-Mart has a high traffic of pet product customers. These products are one of the unique commodities found in its stores and not of its competitors. Its continued dominance in the pet food market is a critical success factor as well.
Controls and Evaluation
- Strategic Control.
- Premise Control (Laszlo & Cescau, 2017).
- Implementation Control.
- Strategic Evaluation.
Wal-Mart adopts the strategic control technique to evaluate its operational plans. It also undertakes premise control, which monitors the strategies developed to ensure that their underlying assumptions are valid. In addition, implementation control is used to evaluate the company’s plans and guide employees to achieve its objectives,. Lastly, the process of strategic evaluation involves setting parameters to measure performance.
References
- Banerjee, D. (2015). Wal-Mart Stores Inc.-A strategic analysis.International Journal in Management & Social Science, 3(12), 202-225.
- Bushnell, N., Drucker, P. F., Abell, D. F., & Hammond, J. S. (2015). Business planning and market strategy in a nutshell. Web.
- Chatterjee, S. (2017). Two efficiency-driven networks on a collision course: ALDI’s innovative grocery business model vs Wal-Mart. Strategy and Leadership, 45(5), 18-25.
- Gilling, R. I., & Ulmer, J. M. (2016). Major challenges in supply chain management.Insights to a Changing World Journal, 2016(3), 1-10.
- Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: An integrated approach. New York, NY: Cengage Learning.
- Laszlo, C., & Cescau, P. (2017). Sustainable value: How the world’s leading companies are doing well by doing good. New York, NY: Routledge.
- Martínez, A. B., Galván, R. S., & Alam, S. (2017). Financial analysis of retail business organization: A case of Wal-Mart Stores, Inc. Nile Journal of Business and Economics, 3(5), 67-89.
- Spicer, A., & Hyatt, D. (2017). Walmart’s emergent low-cost sustainable product strategy. California Management Review, 59(2), 116-141.