Wal-Mart Strategic Analysis

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By: Lachezar Atanasov,Student ID 1018021, International Business School at Vilnius University, Vilnius, Lithuania| 4/11/2010|
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Contents
Section 1: Introduction3
Company structure3
Mission4
Leadership4
Challenges5
Section 2: External analysis5
Dominant economic characteristics5
Five Forces Analysis6
Driving Forces10
Key success factors10
Competitive position analysis and competitor analysis11
Industry attractiveness11
Section 3: Internal analysis12
Strategy identification12
Performance appraisal13
Resources and capabilities assessment14
Value chain analysis15
Competitive strength assessment16
Section 4: Summary analysis17
SWOT analysis17
Critical issues17
Section 5: Moving forward18
Recommendation and Implementation18
Action plan18
Stakeholder impact19

Section 1: Introduction
Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores founded by Sam Walton. Before founding Wal-Mart, Sam Walton accumulated experience in variety store retailing as JCPenny management trainee and a franchisee of Ben Franklin stores. Anticipating discount market growth, Walton opened his first Wal-Mart store in Rogers, Arkansas in 1962. Being successful, by 1967 he opened 24 more stores in Arkansas reaching total sales of $12.6 million. In 1968 Wal-Mart moved out of Arkansas, opening stores in Missouri and Oklahoma. Wal-Mart went public in 1970, giving it access to the financial resources needed to begin a decades-long expansion campaign that led to opening of 3800 stores by 2005.

Wal-Mart growth soared in recent years, with the company adding nearly one new store every day since 2006. The company’s rapid expansion brought its total retail store presence to 6,782 units worldwide by February 2007. As Wal-Mart continued to grow, so did its sales, to a record $345 billion in the fiscal year ended January 31, 2007. Company structure

Wal-Mart has three business segments: Wal-Mart Stores, Sam’s Club, and Wal-Mart International. The Wal-Mart Stores segment includes walmart.com and three retail store formats in all the 50 of the United States including 2257 Supercenters, 1074 Discount Stores and 112 Neighborhood Markets. The latter have the smallest format, with an average size of 42000 square feet, and a primary focus on grocery products. Wal-Mart’s Discount Stores offer a wide assortment of general merchandise and a limited variety of food products within 107000 square feet of selling space. Supercenters average 187000 square feet and add a full line of products to Discount Stores’ typical selection.

Membership-based Sam’s Club operates in a retail warehouse format, as well as online at samsclub.com. The segment’s 579 clubs average 132000 square feet, and provide exceptional value on brand-name merchandise at ‘members only’ prices for both businesses and personal use.

Wal-Mart International doubled its total retail unit count over the past few years, and now operates 2760 stores outside the United States in various formats, under diverse brand names, in 13 foreign countries and territories. Wal-Mart International includes wholly owned operations in Argentina, Brazil, Canada, Puerto Rico and the United Kingdom; the operation of joint ventures in China; and the operations of majority-owned subsidiaries in Central America, Japan and Mexico. Wal-Mart International’s U.K.-based Asda subsidiary brings in the largest share of the company’s international revenue, at 37.4 percent. Wal-Mart de Mexico provides the next largest share, at 23.6 percent of Wal-Mart International sales.

The company’s Neighborhood Market locations provide an average of 29000 items per store, its Discount Stores offer 120000 items in each store; and its Supercenters stock more than 142000 different items. Walmart.com offers customers 1 million items of stock. Sam’s Club features appliances,...
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