Question

Walmart- Case Questions

1) Consider the history of Walmart. Is Walmart's success best described as an intended or emergent strategy?

2) Evaluate changes in Walmart's general environment (e.g., PESTEL analysis) to identify trends that represent both opportunities and challenges. What trends are most important for Walmart's future?

3) Evaluate the competitive forces for the retail industry to identify the forces controlling its profitability (e.g., five forces analysis). Is Walmart positioned for long term profitability? What changes can Walmart make to increase its competitiveness?

Answer 1

1.

\After examining the history and success of Walmart we can say that it uses both intended and emergent strategy. At the initial days of establishment of Walmart the founder decided to establish other stores close to the first store as it would have been easier for him to manage all the stores at the same time.

• At this time Walmart adopted the Emergent strategy as it was the unknown future of the stores and it the beginning as an emerging industry
• On the other hand Walmart also uses Intended strategy to keep the prices of their products very low, lower than other stores to attract more customers.This strategy helps them to maintain a competitive advantage from their rivals.

Emergent strategy has proved a big help to Walmart as a new entry in the market. Playing safe with this strategy helps organization to maintain profitability as well evaluate the market.

Intended strategy on the hand helped to increase the customer base and spread wide.

2.

There are factors that determine the success of the company.These factors are best represented with the help of PESTEL analysis. The PESTEL analysis is abbreviated for Political, Economic, Sociocultural, Technology, Ecological and Legal. All these factors also change over time and period thus creating challenges for Walmart. The changes of these factors impose opportunities or threats/challenges. Walmart need to exploit the opportunities and need to protect or be safe from the challenges or threats. With the help of PESTEL analysis Walmart can determine which factors to prioritize.

PESTEL analysis

Political: Walmart considers political factors in the retail market usually pertaining the government policies. Political support is necessary for Globalization acts as an opportunity, political stability also proves as an opportunity.

Economic: Economic changes put Walmart under pressure. Various economic changes as continued growth of developing economies, decrease of unemployment etc create opportunities.

Sociocultural: Various social factors as a healthy lifestyle, urban migration, diversified nation create opportunities for Walmart.

Technological: A well tech updated organization functions better. An increase in business automation,increasing tech updated services for consumers, business analytics etc create opportunities for Walmart.

Ecological: Changes in ecology is not in one's control, but some changes can bring opportunities like business sustainability, environment friendly products trend.

Legal: Walmart follows all the legal rules and regulations. Food safety regulations, employment regulations create opportunities whereas changing tax reform can be a threat.

3.

Walmart being one of the most strong retail company has a huge competition its way, To cope up with the competitive industry one need to make up new and different strategies for its survival. Porter's five force analysis tool is a strategic management tool that evaluates the external factor that determine the competitive landscape of the industry. Porter's five forces can be as below:

1. Competitive rivalry or competition
2. Bargaining power of buyers
3. Bargaining power of suppliers
4. Threats of substitute or substitution
5. Threat of new entrants.

Walmart is positioned for long term profitability as it considers all the factors for its sustainability. Walmart keeps pace with the market conditions and situations which help them to survive in the long run. Walmarts intensive and generic strategy establish the basic approach to grow the business and keep it competitive.

Changes Walmart can bring to increase competitiveness

• Find a niche market
• Hire employees who value frugality
• Experimentation
• Reduced inventory carrying cost
• Investing in future
• Capture the market globally

The list can continue as Walmart induces new strategies and plans to increase competitiveness.