Abstract

Within the first year Walmart had already increased by 45% marking $105,000 in revenue, and by the first five years, it was recording an income of quarter million yearly. Currently, Walmart is the world’s largest company in terms of revenue production at about $500 billion in addition to being the world’s largest private employer with over 2.3 million employees. This paper will discuss the Walmart Company and its three-year strategic plan as proposed by the company (Hill, & Jones, 2009).

Company History

Walmart began back in the year 1945 when Sam Walton, a businessman and a former employee of J.C. Penney purchased a branch of the Ben Franklin stores from the Butler Brothers. Walton aimed to sell products at lower prices to get a higher volume in sales in addition to lower profit margins packaging the store as looking out for rights of the consumer. At first, he experienced obstacles such as high leasing price of the store, but he was able to source his products from suppliers that other stress did not use, and thus he was in a position to now undercut his completion on the pricing front.

4 Ps

Just like any other company in the industry Walmart employees the 4P as one of its marketing strategies.

The products which Walmart deals in are retail services which are in the service industry. Walmart’s main attraction is the practical and convenient services it provides to its consumers such as the training of personnel to assist shoppers in locating whatever items they might require.

Price: Walmart makes use of the (EDLP), which means the Everyday Low Price strategy. The Walmart stores are always advertising their Everyday low price’ with the aim of attracting more significant numbers of shoppers. This pricing strategy is perfect for Walmart as it supports its cost leadership business strategy. It is characterized by low costs and low prices which when completed by the mass volumes in sales enables the profitability of Walmart.

Promotion: Walmart uses some promotional mixes consisting of advertisements, public relations, sales promotions, and personal selling among others.  Walmart carries its ads in the newspapers and websites, uses special deals and discounts as a way to promote their sales. Walmart implements personal selling with its personnel who persuade customers to try to put new products. Once in a while, Walmart puts out press releases to inform both customers and investors about various programs, strategies, and policies in addition to the sponsorship of charity programs for public relations.

Place: As a service business Walmart makes use of the intensive distribution design, which involves the same variety of goods offered at each Walmart store in addition to the same roles and responsibilities assigned to employees at all the Walmart locations.

Mission Statement

‘To save people money so they can live better’ (Musso, & Druică, 2014). Walmart’s mission statement is in line with the ideology of its founder Sam Walton which is also the foundation of the company. Walmart provides its customers with a wide variety of goods with the best prices, which means that it lives up to its mission statement every day. In my opinion, Walmart living up to its mission statement one of the main reasons behind its’ continued success.

Situational Analysis

Current Situation

Walmart is a service business, and thus it falls under the category of the service industry. The service industry is competitive, but Walmart has managed to secure a large portion of the retail market primarily due to its competitive prices. However, like any other business, Walmart is also susceptible to changes due to a multitude of factors.

SWOT Analysis

A SWOT analysis into Walmart is responsible for providing insights into both the external and internal forces that affect the strategy of the company. These factors change from time to time, but it is essential to understand that the growth of the firm is dependent upon the ability that Walmart has to capitalize on its strengths and exploit any opportunities that may arise. In this case, the power of Walmart is mainly related to the large size of its business. These strengths come in handy as they aid the company in withstanding its threats in spite of any weaknesses that the company may have. Walmart has a global organizational size, which means that it has adequate funding for its continued growth and expansion (Faarup, 2010). Walmart’s global chain provides the company with resilience from threats specific to the retail/service industry. The highly efficient supply chain that Walmart has helped in monitoring and controlling the movement of products.

Weaknesses

The weaknesses that Walmart faces puts the company at a disadvantage in terms of withstanding threats. The vulnerability is directly connected to the cost leadership generic strategy used by Walmart which breeds the weakness of thin profit margins and a business model that can easily be replicated.

Opportunities

The main opportunities that are at Walmart’s disposal are connected to the improvement of the business practices and their continued expansion into the global market. The expansion opportunity and the business practice improvement strategy are linked to human resource and global economic situations. In this case, Walmart has the opportunity to expand into developing countries based upon the high growth of their economies. Another possibility for Walmart is to improve the human resource practices and the improvement of the quality of its standards by addressing the health effects raised by its customers as a result of using low-quality products.

Threats

Any threats facing Walmart are linked to the conditions in the retail market and the changes in the perception of the consumer in regards to their purchases. Walmart faces a threat from the trend of healthy lifestyle since most of the foods sold at Walmart are neither organic nor natural. Walmart also faces the danger of aggressive competition which could succeed in taking away some of the Walmart customers. Individual online selling is also a threat to Walmart’s retail business.

Environmental Scan and Porter’s Five Forces

Walmart is susceptible to environmental forces just like any other business, and from the internal and external environmental scan conducted in the AWOT analysis it is evident that it is possible for Walmart to continue with its success if they handle their weaknesses and threats in the right way and continue to take advantage of their strengths and opportunities. Walmart competes with other big firms in the retail industry such as Amazon, Whole foods, eBay and Home Depot among others. Walmart comes up with strategies to protect themselves from issues that may arise within the service industry when the need arises.

Competition

There is an intense level of rivalry in the retail industry which means that Walmart has to keep up with competition to maintain and even increase market share. It is essential for Walmart to recognize businesses that pose the biggest threat to it by the force of competition/threat they bring with them. It is critical for Walmart to remain aggressive and competitive to maintain its position in the market as a global retailer.

Bargaining Power of Buyers

Buyers/consumers are an essential part of the retail industry since that is who the industry caters. If many buyers were to come together against Walmart, then this would pose a significant threat, but at the moment they are a weak force in terms of being a threat to Walmart. This is a weak threat  because small individual purchasers do not have the clout required to increase their bargaining power.

Bargaining Power of Suppliers

Just like the bargaining power of buyers the bargaining power of suppliers is a weak force I the retail industry because there are numerous suppliers in the industry. This threat to Walmart.

Threat of Substitutes

The threat of substitutes is another weak force in terms of the intensity that it has on Walmart. Walmart offers a wide range of goods and services which makes it difficult to substitute. It is possible to access the substitutes of Walmart products from other outlets, but the lack of variety at other outlets makes it difficult for people to stray far from Walmart.

The threat of New Entrants into the Market

The threat of new entrants into the industry is a strong force since it could pose real competition for Walmart. Even in the presence of industry giants like Walmart, it is possible for new entrants in the market to achieve success. It costs a fortune for a new entrant to penetrate the market but for market entrants with the financial resources required it can be obtained creating a problem for Walmart by eating into its share of the market.

International Performance

Walmart has been able to well for itself in the international market. Since its establishment, one of the primary goals of Walmart was a global expansion which it has managed by venturing into about 11 international markets and performing tremendously in nine of them. In light of cultural barriers, money exchange rates, political instability and many other factors in the global market Walmart international has managed to net $28.3 billion in sales.

Operational Planning

Financial Position

Walmart is doing well financially especially with it being listed in the Forbes 2018 magazine as the largest company in the world in regards to its revenue stream averaging at about $500 billion. It has continuously made profits which have aided in its global expansion by sticking true to its mission statement of providing customers with the best prices.

Operational Budget and Assessment

According to Walmart’s Price earning ration the company is doing well since in the third quarter of 2018 its P/E was about 20x meaning it was doing very well at the time.

Strategic Goals: Core Strategies and Tactics

Strategic Goals

One of the strategic goals that Walmart has is a global expansion which starts by venturing into the developing countries due to their fast booming economy. Global economy helps Walmart to continue solidifying its position in the retail market.

Prioritized Core strategies

Walmart has prioritized some core strategies for the business such as making improvements in the human resource practices of the company.

Recommended Organizational Structure

The organizational structure if Walmart is centralized which works for them primarily by maintaining uniformity across all Walmart stores (Lichtenstein, 2011).

Recommended Marketing Positions

The marketing positions already taken up by Walmart are working in its favor, but it would not hurt to incorporate more locations. Walmart has the best prices and a wide variety of products which is working well so far.

Measuring Success

The three-year strategic plan implemented by Walmart ought to work since it is well planned and thought out. It has also proven to work so far based on the robust nature of Walmart so far mainly in the international market (Brunn, 2006).

 

Brunn, S. D. (2006). Wal-Mart world: The world’s biggest corporation in the global economy. New York: Routledge.

Faarup, P. K. (2010). The marketing framework. Aarhus: Academica.

Hill, C. W. L., & Jones, G. R. (2009). Essentials of strategic management. Mason, OH: South-Western/Cengage Learning.

Lichtenstein, N. (2011). Wal-Mart: The face Of twenty-first-century capitalism. New York: New Press.

Musso, F., & Druică, E. (2014). Handbook of research on retailer-consumer relationship development.

 

Do you need high quality Custom Essay Writing Services?