Strategy analysis and evaluation of walmart stores

Document Type:Coursework

Subject Area:Management

Document 1

Walmart Company is also the largest private employer and the biggest grocery retailer in the United States. Due to the successes that the Company has had in the past, it is considered a retail giant. Walmart is known to make sales of over $300 billion annually and operates more than ten thousand stores globally ("Walmart reports earnings beat for Q4 fiscal 2019 - cnbc. com", 2019). At the core of the Company’s strategy is its value proposition which relies on low-cost prices. It is important however that these domains operate as a unit for success in implementing a strategy (Hambrick & Fredrickson, 2005). Arenas Arenas fundamentally refer to the active presence of the business and strategists always draws interest in where the Company was active (Hambrick & Fredrickson, 2005).

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Walmart has been very active in the American retail market with its headquarters based in Arkansas, United States. However, as of January 2019, Walmart had 11, 348 stores globally across 27 countries and operating under 55 distinct names. Notably, it operates under Walmart in the United States and Canada, Asda in the United Kingdom, Walmart de Mexico y Centroamerica in Central America and Mexico, Best Price in India and Seiyu Group in Japan. 82 billion in the year 2019 accounting to about 23. 7% of the total sales ("Walmart U. S. Q4 Comp Sales (1) Grew 4. 2% and Walmart U. In 2018, the Company also introduced new merchandise for pop fans. They included dedicated collectibles such as Funko products (MarketWatch, 2018). These products were introduced to attract entertainment market share. Apart from the entertainment industry, Walmart believes that it is easier promoting a product that people want than trying to introduce a new product to the market.

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As a modern retail marketer, anyone is a prospective customer for Walmart. As the largest retailer in the United States, Walmart has its own technology laboratories. Walmart collects and analyzes large chunks of consumer data. The company uses mining techniques for use which enables the company to maximize its operations and also predict the customer purchase habits (Hays, 2017). Walmart’s data facility is known as Area 71, though unofficially. In August 212, the Company acquired Polaris search engine. Walmart’s generic strategy is low-cost leadership which is aimed at achieving low costs. Walmart gains its competitive advantage by being a low-cost producer of retail products and services. The company utilizes various strategies to achieve low costs including automation related technologies and minimal spending on Human Resources.

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However, cost leadership involves having a low-cost product differentiation. This generic strategy is anonymous with Walmart and it has not changed over the years. Since its founding, Walmart has acquired dozens of other additional companies far from the abovementioned companies. Although the Company does not have a specifically strategy for acquisition, the recent acquisitions have majorly been e-commerce companies and website. This can be attributed to the changing nature of the retail industry from brick-and-mortar stores to online stores. The joint ventures made by Walmart began in Mexico involving a50-50 joint venture with the leading retailer and finally acquired the venture completely, it has since moved to Canada, Brazil, Argentina, Central America, China, Korea, and India. It has also expanded to Africa with South Africa being the first country.

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It just goes ahead to alter the business style of the entity and improve on the products. Walmart has been known for its distinct selling proposition of offering their products at low prices. While the products are competitively priced by the suppliers, Walmart bargains competitively in order to create value for their customers. This low-cost leadership strategy has worked for Walmart as customers, especially in America, are attracted by discounts. Example of the events that Walmart offers products at a throwaway price is the “Black Friday” event. It could not enter all markets at once. A logically sequenced approach in entering new markets ensures that the learning gained in the previous market is applied in the next entry to a new market.

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Walmart entered Mexico, Canada, Brazil, and Argentina markets at first in 1991. The European market had some attributes that were not pleasant to Walmart as the first point of entry. First, is that the European market is mature implying that there is the existence of many competitors already established. Also, the operational costs of Walmart are very minimal enabling them to add to their profit margins. Their business model is built on low costs, large scale, and minimal cost. This business model has persisted over the years. Walmart superiority is built on its technology. The supply chain used by Walmart is regarded as one of the most technologically advanced providing effectiveness and efficiency. Walmart succeeded in the United States because the US uses a capitalist system of government and therefore private firms flourish.

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A big retailer such as Walmart has revolutionized the US economy. Globalization, privatization, and liberalization give economic policy which is inconsistent with the growth and expansion strategies of Walmart. In the Asian market, for instance, Walmart is different and struggling, this is attributed to liberalized markets such as in China (Kenny, 2012). Beliefs and lifestyle of the people leaving in a certain country amount to the social factors that Walmart need to consider before setting itself up. com, 2016). The Walmart Company enjoys one of the most valuable persons in the world; Sam Walton. Known for his leadership and style for achievements, it is no secret that he is valuable to the company. Consumers trust the name Walton because of the idea of low prices and great quality.

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This name is rare and has grown to be a brand and that is what drives the company and there is no way in which the company can reproduce such a brand. Use of data mining techniques for predictive analytics also shows the innovative nature of Walmart and its willingness to compete at all fronts. Elements of strategy Consistency The five elements of Walmart’s strategy are internally consistent. The internal environment ensures that these elements also support each other. For instance, the Company differentiates itself by offering products at low prices, but this strategy does not work on its own but rather is dependent on the need to have a large assortment of products and be able to sell in large scale.

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Therefore the element of differentiation is dependent on the economic logic that the company uses to obtain profit. Retrieved from https://www. ft. com/content/48bc9928-5540-11e8-b3ee-41e0209208ec Forbes. Playing To Its Strengths: Why Walmart Must Focus On Its Stores And Logistics. Retrieved from https://www. html. Kenny, B. Review of Anita Chan's 'Walmart in China'.  Global Labor Journal, 3(2). Doi: 10. 2139/ssrn. RIS News. Walmart's E-Commerce is Growing More Sophisticated. Retrieved from https://risnews. com/walmarts-e-commerce-growing-more-sophisticated Walmart Locations around the world- United States. S. Q4 Comp Sales (1) Grew 4. 2% and Walmart U. S. Retrieved from https://news. Walmart US Amount in Millions Q2 Δ 1 YTD Δ 1 Net sales $82,815 5. 1% Comparable Sales 2,3 4. 5% 270 bps 3. 3% 170bps Comp traffic 2. 2% 90 bps NP NP Comp ticket 2. walmart.

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