Wal-Mart Case Study

Topics: Wal-Mart, Discount store, Sam's Club Pages: 6 (2474 words) Published: January 30, 2010
1. Based on the company's external and internal environmental analyses (using SWOT analysis), outline the primary factors impacting Wal-Mart's strategy. Organize these factors by Stakeholder Group to prioritize expectations and identify conflicting pressures on the organization. INTERNAL ENVIRONMENTAL ANALYSIS STRENGTHS Capital Market Stakeholders: ▪ Has grown substantially over recent years and has experienced global expansion. According to exhibit 3 in the case, Wal-Mart's revenue has consistently increased. In 1997, they had revenues of $99,627 billion and by 2007 their revenue increased 250% to $348,650 billion. This growth had an impact on Wal-Mart's net income, showing that they were able to control their expenses while continuing to grow and expand their operations. In 1997 their net income was $3,042 billion, by 2007 it had tripled to $11,709 billion. The strength of Wal-Mart is shown in their financial ratios. Compared with an average operating profit margin of 5.1 percent in the prior three-year period, Wal-Mart has averaged 6.0 percent in the past three years. They are consistent in providing shareholder equity, measuring 22 percent in 2007 which is close to their 10-year average. International revenue has been a constant source of sales growth for Wal-Mart, outpacing the revenue contribution from the Sam’s Club segment since 2001. Product Market Stakeholders: ▪ Established name brand that is identified with reasonable to cheap pricing and bargain pricing. Wal-Mart is a store that most individuals can shop at when they are on a low budget and still buy what they set out to buy. Wal-Mart is able to buy in bulk and gain large bulk discounts that are not available to other organizations, enabling them to pass on the discounts and pricing benefits to the customers thus furthering their reputation as a bargain store. A main focus of Wal-Mart's marketing is in its Every Day Low Price campaign. This is what Wal-Mart is known for and what makes them successful. Another major campaign Wal-Mart employs is the Rollback prices. This occurs when Wal-Mart lowers the already lowered Every Day Low Prices. This has been advantageous for Wal-Mart causing an increase in their customer base. Wal-Mart already offers low prices, after rolling back prices, they are able to out-price most of their competition. ▪ Has multiple business segments enabling them to provide products and services to several different niches in society. Wal-Mart has three business segments: Wal-Mart Stores, Sam’s Club, and Wal-Mart International. The Wal-Mart Stores segment includes walmart.com, Super centers, Discount Stores, and Neighborhood Markets. ▪ A powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store. Maybe the single most important marketing aspect of Wal-Mart is that they create the ideal one-stop shopping experience. Through the separate divisions, Wal-Mart offers thousands of products, allowing the typical consumer to go into any Wal-Mart and walk out without having to stop at another store for anything that might need. ▪ Has a core competence involving its use of information technology to support its international logistics system, enabling them to see how individual products are performing country-wide, store-by-store at a glance. Wal-Mart has a very strong, well defined system in its access to distribution networks which enables them to take advantage of economies of scale in regards to inventory and shipping. Their logistics system gives Wal-Mart the ability to increase the speed of deliveries, a faster response to market demands, and a low inventory, allowing Wal-Mart to decrease its sales cost by 2 to 3 percent over the industry. This system is maintained through employees and facilitated with a proprietary satellite-based communication system that enables managers and point-of-sale systems real-time information on the needs of each store. Wal-Mart offers a safe, secure and...
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