Wal-Mart Strategic Audit
By Team Two
Jessica Kauten, Siyeicea Love-Gurganious,
William Montague, Scott Randall,
Marchelle Robinson and Judith Rosado
Strategic Management 479
Columbia College
Alexander Furla
May 8, 2011
Wal-Mart Strategic Audit
2
Wal-Mart History
Wal-Mart was founded in 1962 by Samuel Moore Walton. He was considered “one of
the most influential retailers of the century” (Wheelen & Hunger, 740). Sam Walton started his
retail career in management in 1940 with J.C. Penney Co. His training and hard work at J.C.
Penney Co. led him to his great Wal-Mart idea. He decided that small town populations would
welcome, and make profitable, large discount shopping stores. When Sam Walton created WalMart in 1962, he declared that three policy goals would define his business: “respect for the
individual, service to customers, and striving for excellence” (Walmartstores.com).
Wal-Mart stores “sold nationally advertised, well-known-brand merchandise at low
prices in austere surroundings” (Wheelen & Hunger, 738). The 1970’s marked significant
growth for Wal-Mart with its first Wal-Mart Distribution Center as well as the Wal-Mart Home
Office. By the end of 1979, there were 276 Wal-Mart stores in 11 states and in 1991; the firm
had 1,573 stores in 35 states to include the international market. Wal-Mart sales growth
continued into the 1980s. Wal-Mart was divided into three business segments: Wal-Mart stores,
Sam’s Clubs, and the International Division.
In 1983 the company opened its first three Sam's Wholesale Clubs and began its
expansion into bigger city markets. Wal-Mart Supercenters were large combination stores that
included a full-line grocery center, a general merchandise discount store, banks and some even
offered a food court of restaurants. Wal-Mart’s international expansion accelerated
management’s plans for expansion and notoriety. In 2000, Fortune magazine named it as one of
the “100 Best Places to Work” and in 2002, “Wal-Mart officially became the world’s largest
company based on its $245 billion in sales” (Wheelen & Hunger, 731).
Wal-Mart Strategic Audit
3
Wal-Mart’s winning strategy in the United States was based on selling brand products at
low cost while still offering the customer a quality product. Wal-Mart is in the business of
selling what customers need in their everyday lives. This includes the consumer goods listed
above as well as food-service items.
Wal-Mart took pride in its domestic strategies and
programs that were based on a set of two priorities: 1) “Customers would be provided with what
they want, when they want it, all at a value”. 2) “Treating each other as we would hope to be
treated, acknowledging our total dependency on our Associate-partners to sustain our success”
(Wheelen & Hunger, 747).
In the year ending January 31, 2006, Wal-Mart’s financials reflected the following:
(all dollar amounts are in millions)

Total revenue - $315, 654

Net income - $11,231

Total assets - $138,187

Total liabilities - $48,826

Total shareholder’s equity - $53,171. According to the 2006 consolidated balance sheets
total liabilities and shareholders’ equity equaled $138,187 not just totals shareholders’
equity as previously shown.
Wal-Mart Strategic Audit
4
Wal-Mart Strategic Audit
I. Current Situation
A. Current Performance
Wal-Mart (WM) is divided into three business segments: Wal-Mart Stores, Sam's Club, and
the International Division. In 2002, “Wal-Mart officially became the world’s largest
company based on its $245 billion in sales” (Wheelen and Hunger 19-1). As of January 31,
2006, the company had over 6,100 stores worldwide, bought products from 70 countries, and
20% of its business was generated outside of the United States (Wheelen and Hunger 19-2).
1. 2006 fiscal year sales of $312.4 billion, a 9.5% year over year increase.
2. $11.2 billion net income, up 9.4% to $2.68 per share.
3. Stock price of $46.11, down from $56.98 on January 31, 2002. (Likely due to better
competition and future expected growth slowdown.)
B. Strategic Position
1. Mission
Wal-Mart Stores, Inc. is a global retailer committed to improving the standard of living
for our customers throughout the world (Annual Report 2006).
2. Objectives

Comparative store sales indicates the performance of our existing stores by measuring
the growth in sales for a time period corresponding to the prior year period

Operating income growth greater than net sales growth has long been a measure of
success for us.

Inventory growth at a rate less than that of net sales is a key measure of our
efficiency.
Wal-Mart Strategic Audit

5
With an asset base as large as ours, we are focused on continuing to make certain our
assets are productive. It is important for us to sustain our return on assets (Annual
Report 2006).
3. Policies

We earn the trust of our customers every day by providing a broad assortment of
quality merchandise and services at everyday low prices (“EDLP”) while fostering a
culture that rewards and embraces mutual respect, integrity and diversity. Putting Our
Customers First.

EDLP is our pricing philosophy under which we price items at a low price every day
so that our customers trust that our prices will not change erratically under frequent
promotional activity.

Our focus for SAM’S CLUB is to provide exceptional value on brand-name
merchandise at “members only” prices for both business and personal use.
Internationally, we operate with similar philosophies (Annual Report 2006).
4. Strategies

We have developed several initiatives to help mitigate this pressure and to grow
comparable store sales through becoming more relevant to the customer by creating a
better store shopping experience, continual improvement in product assortment and
an aggressive store upgrade program to be instituted over the next 18 months.

Our expansion programs consist of opening new units, converting discount stores to
supercenters, relocations that result in more square footage, as well as expansions of
existing stores.
Wal-Mart Strategic Audit

6
Sam’s Club - We believe that a greater focus on providing a quality in-club
experience for our members will improve overall sales, including sales in these
categories.

International – A shift in the mix of products sold toward general merchandise
categories which carry a higher margin (Annual Report 2006).
II. Strategic Managers
A. Board of Directors

Thirteen members, four affiliated with the company, nine independent, three women, two
African Americans, two Hispanic Americans.

Chairman of the Board, S. Robson Walton (son of founder.)
B. Top Management

Eduardo Castro-Wright Executive Vice President, President and Chief Executive Officer,
Wal-Mart Stores Division U.S.

M. Susan Chambers Executive Vice President, People Division

Patricia A. Curran Executive Vice President, Store Operations, Wal-Mart Stores Division
U.S.

Douglas J. Degn Executive Vice President, Food, Consumables, and Hardlines, Wal-Mart
Stores Division U.S.

Linda M. Dillman Executive Vice President, Risk Management and Benefits
Administration

Johnnie Dobbs Executive Vice President, Logistics and Supply Chain

Michael T. Duke Vice Chairman, Responsible for Wal-Mart International

Joseph J. Fitzsimmons Senior Vice President, Treasurer
Wal-Mart Strategic Audit

7
John E. Fleming Executive Vice President, Chief Marketing Officer, Wal-Mart Stores
Division U.S.

Rollin L. Ford Executive Vice President and Chief Information Officer

David D. Glass Chairman of the Executive Committee of the Board of Directors

Mark D. Goodman Executive Vice President, Marketing, Membership and E-commerce,
SAM’S CLUB

Craig R. Herkert Executive Vice President, President and Chief Executive Officer, The
Americas, Wal-Mart International

Charles M. Holley, Jr. Senior Vice President, Finance

Thomas D. Hyde Executive Vice President and Corporate Secretary

Lawrence V. Jackson Executive Vice President, President and Chief Executive Officer,
Global Procurement

Gregory L. Johnston Executive Vice President, Club Operations, SAM’S CLUB

C. Douglas McMillon Executive Vice President, President and Chief Executive Officer,
SAM’S CLUB

John B. Menzer Vice Chairman, Responsible for U.S.

Thomas M. Schoewe Executive Vice President and Chief Financial Officer

H. Lee Scott, Jr. President and Chief Executive Officer

Gregory E. Spragg Executive Vice President, Merchandising and Replenishment, SAM’S
CLUB

S. Robson Walton Chairman of the Board of Directors

Claire A. Watts Executive Vice President, Product Development, Apparel and Home
Merchandising, Wal-Mart Stores Division U.S.
Wal-Mart Strategic Audit

Eric S. Zorn Executive Vice President, Wal-Mart Realty (Annual Report 2006).
III. EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREAT
(SWOT)
A. Natural Environment

Raw materials availability.(O)

Land availability. (O)

Electricity usage. (T)

Oil and Gas usage. (T)

Water scarcity. (T)

Hazardous waste storage, transportation and disposal. (T?)
B. Societal Economy
1. Economic

Interest rate increases may signal end of economic expansion (T).

Economic deterioration may mean more frugal shopping habits. (T)

Increasing commodity costs. (T)

Increasing transportation costs. (T)

Currency fluctuations. (T)

Slowing national economy (T)
2. Technology

Increased usage of RFID for inventory management. (O)

Internet presence allows for customer options. (O)

Information technology increasingly important. (O)
3. Political-Legal
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Wal-Mart Strategic Audit

Regional trade pacts are making free trade available between countries. (O)

Differing laws between countries may evoke compliance issues. (T)

Potential unionization of workforce. (T)

The Company is involved in a number of legal proceedings. In accordance with
9
Statement of Financial Accounting Standards No. 5, “Accounting for Contingencies,”
the Company has made accruals with respect to these matters, where appropriate,
which are reflected in the Company’s consolidated financial statements (Annual
Report 2006). (T)

The Company is a defendant in numerous cases containing class action allegations in
which the plaintiffs have brought claims under the Fair Labor Standards Act
(“FLSA”), corresponding state statutes, or other laws (Annual Report 2006). (T)
4. Sociocultural

Aging U.S. demographics. (O)

Slowing U.S. population growth. (T)

Wal-Mart seen as a reason for closing of mom and pop stores. (T)

International cultural differences. (T)

Green environmental movement. (O)
C. Task Environment

United States market saturation. (T)

Expansion into Europe, China, South America, Canada, and Mexico. (O)

Rivalry High. Target, Sears, K-Mart (T)

Chance of new entrants low. (O)

Purchasing power high. (O)
Wal-Mart Strategic Audit

Substitute power high. (T)

Government regulations power medium. (T)
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IV. Internal Environment
A. Corporate Structure

Three business units, Wal-Mart Stores USA, Sam’s Club, and Wal-Mart International
(Wheelen and Hunger 19-12). (S)
o Wal-Mart Stores unit had 3,289 locations and included the company’s
supercenters, discount stores, Neighborhood Markets in the US, and
walmart.com.
o Sam’s Club unit had 567 locations and included the warehouse membership
clubs in the US plus samsclub.com.
o Wal-Mart International had 2,285 locations in 10 countries. The International
total was increased in February 2006 by purchasing a majority control of
CARHCO with 360 locations in five Central American countries (Wheelen
and Hunger 19-12).
B. Corporate Culture

In-depth employee involvement in company affairs. (S)

Trained employees to be merchants by being responsible for the performance of their
own departments. (S)

Reflection of the founder’s values. (S)

Conservative values create some problems when expanding to larger cities. (W)

Non-Union stance is viewed unfavorably is some areas. (W)
Wal-Mart Strategic Audit

11
Offered $8.5 million worth of grants from its “Safe Neighborhood Heroes” program
to recognize emergency professionals. (S)

Donated $3 million in supplies when Hurricane Katrina devastated America’s Gulf
Coast. (S)
C. Corporate Resources
1. Marketing

Advertising costs are expensed as incurred and were $1.6 billion in 2006. Advertising
costs consist primarily of print and television advertisements (Annual Report 2006).

Buy American campaign. (S)

Green marketing offers the option of buying products which were better for
environment. (S)

Offers quality brand names at lower-than-competitive prices (Wheelen and Hunger
19-19). (S)

Introduced a “Value Plan” benefits plan to its employees at premiums ranging from
$11 to $65 a month. (S)
2. Finance

$312.6 billion in annual sales. (S)

$11.2 billion net income. (S)

$2.68 earnings per share. (S)

8.9% return on assets. (S)

11.4% increase in sales and operating income for the international business (Wheelen
and Hunger 19-24). (S)
3. R&D
Wal-Mart Strategic Audit
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
More involved with the development side. (W)

Focusing on expansion and development of already established business model. (W)
4. Operations

Wal-Mart USA. We are intent on driving comparative store sales by being relevant to
our broad customer base and by improving our cost structure and inventory flow to
strengthen return on investment. (S)

Sam’s Club. We remain committed to serving the needs of our members – where
pennies matter – by leveraging productivity improvements and lowering expenses, so
that we can provide the products and services they want at the lowest prices in the
industry. (S)

Wal-Mart International. Our approach to ensuring continued profitable growth
includes three dimensions – new markets with multiple formats, new store growth in
existing markets and increasing sales at existing stores (Annual Report 2006). (S)
5. Human Resources

Employees are called associates. (S)

Employee stock ownership and profit-sharing program. (S)

Decentralized approach to retail management development. (S)

Utilizes the Total Quality Management approach. (S)

Discourages unionization (Wheelen and Hunger 19-23). (W)
6. Information Systems

Leader in RFID technology. (S)

Good internet presence. (S)
Wal-Mart Strategic Audit

Utilizes satellite communications, data centers, and handheld devices. (S)
V. Analysis of Strategic Factors
A. Situational Analysis
1. Strengths

International brand name.

Financial position.

Market leadership.
2. Weaknesses

Market saturation.

Public opinion.

Adjustment to cultural differences after entering a foreign market.

Supplier alienation.

Past employee discrimination.

Employee health benefits.

International supplier employee violations.
3. Opportunities

International expansion.

Environmental leadership.

Worker’s rights leadership.

Community involvement.

Social initiatives.
4. Threats

Strong U.S. competition.
13
Wal-Mart Strategic Audit

Changing demographics.

Economic uncertainty.

Current litigation.

Employee unionization.
14
VI. Strategic Alternatives and Recommended Strategy
A. Strategic Alternatives

Adopt a friendlier corporate attitude and image
o Pro. Improved customer service
o Pro. Business growth
o Pro. Stronger relationships with its suppliers and customers
o Con. The negative image tarnishes their moral and ethical image

Con. Popular image is that Wal-Mart comes to town and “locally-owned retailers
shrivel up and die” (Parnell, 2008).

Ease into foreign and domestic markets instead of barging in
o Pro. Create a more positive corporate image by not devouring every business
in sight.
o Pro. Creates an image with integrity
o Pro. Customer loyalty
o Pro. Increase friendlier competition
o Con. Creates ill-will among smaller businesses
o Con. Viewed as a bully corporation

Expansion
o Pro. Provides a new source of tax revenue for the community
Wal-Mart Strategic Audit
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o Pro. Creates more jobs
o Pro. Promotes community expansion and individuals who will patronize from
other communities
o Pro. Opportunities for employee growth in the organization
o Con. Associates may receive unjust wages due to the compensation of lower
cost products
o Con. Purchasing practices require most suppliers to manufacture goods in
third world countries
o Con. Reduces the value on competing businesses
B. Recommended Strategy

Continue to expand the brand and operations in to urban & rural areas and foreign
countries. The company’s reputation of being a bully needs to be eliminated by
implementing social awareness/advancement programs similar to Boys and Girls
clubs or the Police Athletic League. The goal of such a program will be to invite the
community to take part in Wal-Mart’s growth by mentoring, providing training,
internships and/or jobs that will aid the community.

“Mom and Pop” establishments should not be taken for granted. It is not the intention
of Wal-Mart to take from anyone’s dream, but to it is Wal-Mart’s goal to provide cost
savings to its consumers. A possible strategy for easing the anxiety of many small
business owners on the onset of Wal-Mart entering the community is offering these
owners the opportunity to become a part of Wal-Mart staff in a capacity that would
provide them sense of security. Offering small business owners a position will not
Wal-Mart Strategic Audit
16
only eradicate the discontent of loyal customers but will display Wal-Mart’s
willingness to enter a community and enhance it.

With the attitude of “business is a dog eat dog world”, Wal-Mart has been able to
enter the market “eat” stores that have tried to follow its precedence but have not
been able to attain Wal-Mart’s recognition. Entering into foreign markets may be
extremely difficult, as many nations are known for their loyalty and enriched cultures.
Unlike the United States, countries like China and Japan are accustom to living with
less, so the attractiveness of buying more due to cost savings may not be received as
well as in the United States. It is in the best interest of Wal-Mart to establish stores in
foreign markets, but to adopt the culture of the area and continue to maintain its
mission of enhancement not degradation.
VII. Implementation

Management needs to be open to change regarding clashes with “grass-roots”
movements that push to keep new construction of Wal-Mart stores in rural America.
While many residents welcome a new Wal-Mart, there will always be opposition and
by developing ways to appease those that oppose the giant retailer, they will be more
welcome to the neighborhood.

Wal-Mart has been steadily reaching into every corner of the earth, but not always
with successful results. Upper management is making the assumption that every
culture will welcome box stores and the American culture of which Wal-Mart is
known. As has been proven time and again, this is not always true. There needs to
be committees established that can perform thorough research.
Wal-Mart Strategic Audit

17
Several lawsuits have been filed regarding the treatment of employees. Wal-Mart
needs to develop a way to ensure employees are getting the right benefits that are
equal to the retail industry’s average worker.
VII. Evaluation and Control

Wal-Mart needs to develop “scout” teams that can visit locations of opportunity and
solicit the communities concerns if Wal-Mart builds nearby.

Implement incentivized customer satisfaction surveys and employee surveys, which
will increase the chance of them being completed.

Monitor industry trends in foreign countries of interest.

Shift from monopolizing to publicly displaying how important “Mom and Pop”
establishments are to our society and how Wal-Mart can effectively and efficiently
incorporate these individuals and there keen sense of business into the large picture of
providing consumers cost savings.
Wal-Mart Strategic Audit
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EFAS (External Factor Analysis Summary)
Key Internal Factors
Weight
Rating
Weighted
Scores
Opportunities
International expansion
.20
3
.60
Environmental leadership
Worker’s rights leadership
.05
.05
2
2
.10
.10
Community involvement
.10
2
.20
Social initiatives
Threats
Strong U.S. competition
.10
2
.20
.15
4
.60
Changing demographics
Economic uncertainty
.10
.05
3
3
.30
.15
Current litigation
Employee unionization
.10
.10
3
3
.3
.3
Total Scores
1.0
Comments
Required to remain
competitive & #1 in market
Will take time
Will take time and initiative to
steer towards a win - win
Ensures community buy-in
and acceptance
Fosters relationships
Kmart and Target are
capturing an opposing niche
while Wal-Mart remains a
catch all of convenient
shopping
Domestic recession, lower
discretionary spending,
increasing unemployment
2.85
IFAS (Internal Factor Analysis Summary)
Key Internal Factors
Weight
Rating
Weighted
Scores
Strengths
International brand name
Financial position
Market Leadership
.15
.15
.15
4
4
4
.60
.60
.60
Weakness
Market saturation
.15
3
.45
Adjustment to cultural differences
Supplier alienation
Past employee discrimination
Employee health benefits
Total Scores
.10
.20
.05
.05
1.0
3
3
2
2
.30
.60
.10
.10
1.55
SFAS (Strategic Factor Analysis Summary)
Comments
Grew stronger as the
economy grew weaker
Embarking on international
opportunities
Wal-Mart Strategic Audit
Key Strategic Factors
Weight
Rating
International brand name
.15
4
Weighted
Score
.60
Market saturation
Supplier alienation
International expansion
Social initiatives
.15
.20
.20
.10
3
3
3
2
.45
.60
.60
.20
X
X
X
X
X
X
X
X
X
X
X
Strong U.S. competition
.15
4
.60
X
X
X
Economic uncertainty
.05
3
.15
TOTAL SCORES
1.00
3.20
Duration
S
I
X
X
Comments
L
X
Name
Recognition
Community
outreach
programs
Kmart and
Target are
capturing an
opposing niche
while Wal-Mart
remains a catch
all of convenient
shopping
Domestic
recession, lower
discretionary
spending,
increasing
unemployment
19
Wal-Mart Strategic Audit
20
Wal-Mart, Inc.
Executive Summary
An in-depth strategic audit was conducted on Wal-Mart, Inc. by Strategic Audit Team
Two and several recommended alternatives and strategies have been recommended. The
purpose of this executive summary is to detail those strategies and recommendations that are
discussed in three different phases: Strategic Alternatives and Recommendations,
Implementation and Evaluation and Control.
Strategic Alternatives
In order for Wal-Mart to maintain its course to becoming the global retail leader, we have
determined several Strategic Alternatives as well as Recommended Strategies. For this
summary, we will examine the pros and cons of the three alternatives we have decided as having
the most importance.
Many towns and communities see Wal-Mart as an aggressive corporation that has done
nothing to the community except destroy existing small businesses. One strategic alternative is
to develop a friendlier corporate image in dealing with the public as well as its employees.
Management could get more involved with community charities or provide employees with
better benefits. Employees that are more content on the job will likely provide better customer
service. Wal-Mart will also be accepted into the communities more easily, rather than having to
struggle against grass-root movements, petitions and lawsuits.
Wal-Mart Strategic Audit
21
A negative side-effect could be lower profits as employee wages and benefits increase as
well as prices. Everyone comes to expect low prices but in order to appease employees and the
community, prices will have to rise.
The second strategic alternative that our team has agreed upon is incorporating changes
into the methodology of Wal-Mart’s expansion in global markets. In the past, Wal-Mart has
made bad decisions regarding product choices in a foreign country. For example, certain
products didn’t sell well in countries like Mexico and Argentina. Mistakes were also made upon
entering the foreign markets and trying to maintain a presence. German Wal-Marts were
managed by American executives who caused German managers to quit. Brazilian Wal-Marts
were not wholly accepted by the local populace due to unfamiliarity with the Wal-Mart brand.
Wal-Marts in China were tightly managed and highly restricted by local laws which did not
allow for growth. And South Korean Wal-Marts simply closed their doors when they were
deemed unsuccessful with consumers. By taking the time and assigning a task force to research
the new market, Wal-Mart would be able to ease into a new global market instead of its common
method of simply “barging in” and buying up chains of existing retail stores and simply
“slapping” the Wal-Mart brand onto the store. This easement would allow time for the local
populace to accept Wal-Mart as just another retail store instead of a retail bully. This in turn
would create a more positive corporate image in the foreign market. Also, by slowly
establishing itself it could allow for friendlier competition with existing retail firms.
The downside of slowly easing into a new market is not being able to establish its place
in the retail business. Large chains will still have the advantage of loyal customers that may stay
clear of Wal-Mart which would quickly cut into profits. Many foreign consumers may not be
familiar with the Wal-Mart brand and by not establishing a solid foothold in their country, they
Wal-Mart Strategic Audit
22
never will. Also, the supply chain that Wal-Mart is well known for is not as established in the
global market.
The last strategic alternative is Wal-Mart’s future expansion. In order for Wal-Mart to
stay competitive against its nearest rival, Target, and other big box type retailers, it must
continue with building new stores. Even though many communities do not approve of Wal-Mart
moving in, many residents agree that the new store provides jobs and in some rural areas where
joblessness is high, this is a big benefit. Many large companies, Wal-Mart included, provide tax
revenues that allow the community to grow and develop. Without a large company, smaller
communities do not have the resources to put towards new parks or infrastructures. Wal-Mart
stores provide competition which allows lower prices for common, everyday items, and in times
of recessions, this is always a big plus in areas where mid to lower income families live.
Unfortunately, there are many disadvantages to expansion. By building too many new
Wal-Mart stores, the market will become saturated and stores will earn less profit per location.
Local businesses will always suffer in the shadow of a new Wal-Mart which will bring some
community resentment. New stores will provide many jobs, but usually at the lowest pay
allowed by law. Wal-Mart will always have to deal with petitions, lawsuits and other legal
issues prior to and during any construction.
Recommended Strategies:
Wal-Mart needs to continue to expand the brand and operations into urban and rural areas
as well as foreign countries. The company’s reputation of being a bully needs to be eliminated
by implementing social awareness/advancement programs similar to Boys and Girls clubs or the
Police Athletic League. The goal of such a program will be to invite the community to take part
Wal-Mart Strategic Audit
23
in Wal-Mart’s growth by mentoring, providing training, internships and/or jobs that will aid the
community versus hinder it.
“Mom and Pop” establishments should not be taken for granted. It is not the intention of
Wal-Mart to take from anyone’s dream, but it is Wal-Mart’s goal to provide cost savings to its
consumers. A possible strategy for easing the anxiety of many small business owners on the
onset of Wal-Mart entering the community is offering these owners the opportunity to become a
part of Wal-Mart staff in a capacity that would provide them a sense of a security. Offering
small business owners a position will not only eradicate the discontent of loyal customers but
will display Wal-Mart’s willingness to enter a community and enhance it.
With the attitude of “business is a dog eat dog world,” Wal-Mart has been able to enter
the market and “eat” stores that have tried to follow its precedence but have not been able to
attain Wal-Mart’s recognition. Entering into foreign markets may be extremely difficult, as
many nations are known for their loyalty and enriched cultures. Unlike the United States,
countries like China and Japan are accustomed to with less, so the attractiveness of buying more
due to cost savings may not be received as well as in the United States. It is in the best interest
of Wal-Mart to establish stores in foreign markets, but to adopt the culture of the area and
continue to maintain its mission of enhancement not degradation.
Implementation:
Management needs to be open to change regarding clashes with “grass-roots” movements
that push to keep new construction of Wal-Mart stores in rural and urban America. While many
residents welcome a new box style retailer, there will always be opposition. By developing ways
to appease those that oppose the giant retailer, they will be more welcome to the neighborhood.
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Wal-Mart has been steadily reaching into every corner on earth, but not always with
successful results. Upper management is making the assumption that every foreign culture will
welcome box stores and the American culture for which Wal-Mart is known. As has been
proven time and again, this is not always true. Management needs to develop executive steering
committees with a single goal of researching the host country to establish the local customs.
Otherwise, Wal-Mart will continue to experience local opposition on foreign land.
Several lawsuits have been filed regarding the treatment of Wal-Mart’s employees, as
well as local communities. Some of the employee key issues are pay and benefits. Human
Resource Management should develop a strategy that would evaluate the pay and benefits of
employees to ensure fair treatment. Studies should be conducted that would evaluate the average
pay and benefits being offered at other competing retailers and make changes as necessary. This
would greatly increase Wal-Mart’s image in local communities just by providing better than
“minimum wage” to associates.
Evaluation and Control:
In order for Wal-Mart to continue its global growth, “scout” teams should be developed
that could visit locations of opportunity and solicit the community’s concerns if Wal-Mart builds
nearby. This may require surveys or town-hall meetings.
Implement incentivized customer satisfaction surveys as well as employee surveys.
These surveys will encourage completion which would be able to help Wal-Mart to better serve
its customers as well as its employees. This holds true in both the United States and other
countries. Surveys would greatly help establish what needs are required to be met to have a
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successful store built domestically as well as in a foreign country. Customer surveys would also
helpful in determining products, layouts and demands of the customers.
As industries shift here in the United States as well as overseas, trends need to be
monitored to ensure future strategies can be developed. If trends are not monitored, production
and operations could shift which could affect overall sales.
Shift from monopolizing local markets to publicly displaying how important “Mom and
Pop” establishments are to our society. Wal-Mart can effectively and efficiently incorporate
these individuals and their keen sense of business into the large picture of providing consumers
cost savings.
A continuous evaluation of strategic systems, such as production and distribution, will be
required to ensure all goals are being met. For example, product placement is the key in
determining what sells and what the customer wants/needs. There may also be laws governing
particular regions in regards to what products might be restricted to sell.
Wal-Mart Strategic Audit
Works Cited
Parnell, John A., and Donald L. Lester. Competitive strategy and the Wal-Mart threat:
positioning for survival and success. Bnet. Web.
Wheelen, Thomas L., and J. David Hunger. Strategic Management and Business Policy:
Achieving Sustainability. Upper Saddle River: Prentice, 2010. Print.
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