Our case presentation is based on Wal-Mart.. We are going to talk about Wal-Mart’s strategies, business model and how it influences the society.
Here is some General Information about Wal-Mart.
Founded by Sam Walton in 1962, Wal-Mart is the largest employer in the world, employing more than 1.6 million “associates” worldwide. In 2005, Wal-Mart had $312.4 billion in sales contributed by more than 6200 facilities around the world.
Corporate strategy is concern more with the question of where to compete and Wal-Mart’s corporate strategies are 1. The definition of businesses in which Wal-Mart will participate. 2. The deployment of resources among those businesses
1) Primary Stakeholders’ Objectives
1. Expansion in the U.S. and international business. The latest expansion strategy is for the company to gain entry into a nation by corporate of a national retailer. For instance, Seiyu in Japan 2. Wal-Mart had created positive company reputation
by providing best quality products and lowest price
3. Branching out into new sectors of retailing
Wal-Mart has recently become a major pharmacy, automotive repair shop, and is now moving into grocery sales. Eg Wal-Mart's Site-To-Store program 2) Strategic intent
Wal-Mart’s strategic intent has changed from “Lowest prices everyday” to “Save Money Live Better”.
The change in the slogan is a smart move because Wal-Mart had previously forced many criticisms for making people’s lives worse rather than better. This is because when Wal-Mart rooks into town, a lot of smaller shops go out of business. “Always low prices” was very focused on Wal-Mart itself.
3) Patterns in resource allocation
Single industry with vertical integration
Wal-Mart has primarily operated in a retail industry. For instances, gasoline stations, second-hand car sales, and electricity provider, Texas Retail Energy for numbers of Wal-Mart stores etc
It has Geographical expansion within existing markets both domestically and internationally.
In 2006, Wal-Mart announced it withdrawal from Korea and Germany and sold to the local retail organisation.
4) Mergers and acquisitions
Backward vertical integration
About 40% of products sold in Wal-Mart are private label store brands, produced through contracts with manufacturers. Wal-Mart has a electricity company to supply electricity for its own stores in Texas. It also has the largest trucking company in the United States with more than 6100 trailer trucks and employed over 7,600 truck drivers, increasing the efficiency to provide on time delivery which satisfies customers’ need.
Wal-Mart also obtained a 38% controlling share in the Japanese retail chain Seiyu
Wal-Mart is engaged in Price leadership which provides good quality branded goods and outstanding customer service at the lowest profit margin.
It Differentiates its goods by offering the following:
• Quality goods
• $4 prescriptions program
• Customer service
• Wal-Mart has built enough clout with suppliers that they can dictate the prices and go in and change suppliers manufacturing processes in order to wring out more and more savings for the consumer. o A particular example of Wal-Mart differentiating its product is when Wal-Mart got rid of deodorant boxes to reduce the cost of deodorant while attempting to sustain the environment. Environmentally conscious consumers willing to save money would view these deodorants as distinct from other competitors that sell the same products.
• Build (implies objects of increased market share, even at the expense of short-term earnings and cash flow. The mission is reflected by The Global market share of Wal-Mart grows from 6.7% in 2003 to 8.6 % in 2006 due to its low profit margin.
Wal-Mart is a multinational corporation which consists of 3 SBUs including 1....