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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!