Columbia CollegeJessica Kauten, Siveicea Love-Guarganious, William Montague,

Scott Randall, Marchelle Robinson, and Judith RosadoStrategic Management 479

Alexander Furla

WAL-MART STORESSTRATEGIC AUDIT TEAM PRESENTATION

Current SituationCurrent Performance

Divided in 3 Business Segments: Wal-Mart Stores, Sam's Club, and the International Division.

Largest Company with $245 billion in sales.

$11.2 billion net income, up 9.4% to $2.68 per share.

Stock price of $46.11.Over 6,100 stores

worldwide.

Board of Directors13 members, 4

affiliated, 9 independent, 3 women, 2 African Americans, 2 Hispanic Americans.

S. Robson Walton, Chairman of the Board.

Strategic Management

Natural EnvironmentRaw materials availability. (O)Land availability. (O)Electricity usage. (T)Oil and Gas usage. (T)Water scarcity.(T)Hazardous waste storage,

transportation and disposal. (T)

External EnvironmentSWOT Analysis

External EnvironmentSocietal Economy Economic Interest rate increases (T). Economic deterioration (T) Increasing commodity costs. (T) Increasing transportation costs. (T) Currency fluctuations. (T) Slow national economy. (T)

TechnologyUsage of RFID (O)Internet presence (O)IT increasingly important. (O)

External Environment Political-Legal Regional trade pacts making free trade

available (O)Differing laws may evoke compliance issues.

(T)Potential unionization of workforce. (T)Many legal proceedings. (T)Defendant in numerous cases containing

class action allegations (T)

External Environment Socio-cultural 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)

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) Substitute power high. (T) Government regulations power medium. (T)

Internal EnvironmentCorporate Culture In-depth employee involvement in company affairs. (S) Trained employees to be merchants. (S) Reflection of the founder’s values. (S) Conservative values create some problems through expansion. (W) Non-Union stance is viewed unfavorably is some areas. (W) Corporate Resources Marketing Advertising costs are expensed as incurred. (S) Advertising costs consist primarily of print and television

advertisements. (S) Offers quality brand names at lower-than-competitive prices. (S) Introduced a “Value Plan” benefits plan to its employees. (S) Green marketing products better for environment. (S)

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. (S)

Internal Environment

R&D More involved with the development side. (W) Focused on expansion and development. (W) Operations Wal-Mart USA - intent on driving comparative store

(S) Sam’s Club - remain committed to serving the needs

of our members (S) Wal-Mart International - approach to ensuring

continued profitable growth. (S)

Internal Environment

Internal Environment 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. (W)

Information Systems

Leader in RFID technology. (S)

Good internet presence. (S)

Utilizes satellite communications, data centers, and handheld devices. (S)

Analysis of Strategic FactorsSituational

Analysis Strengths International brand

name. Financial position. Market leadership.

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.

Analysis of Strategic Factors Opportunities International

expansion.Environmental

leadership.Worker’s rights

leadership.Community

involvement.Social initiatives.

ThreatsStrong U.S.

competition.Changing

demographics.Economic uncertainty.Current litigation.Employee

unionization.

Strategic Alternatives and Recommended Strategy

Adopt a friendlier corporate attitude and image Pro. Improved

customer service Pro. Business growth Pro. Stronger

relationships Con. Negative image Con. Wrong impression

from local owned retailers (Parnell, 2008).

Ease into foreign and domestic markets instead of barging in Pro. Positive corporate

image by not devouring every business in sight.

Pro. Creates an image with integrity

Pro. Customer loyalty Pro. Increase friendlier

competition Con. Creates ill-will among

smaller businesses Con. Viewed as a bully

corporation

Strategic Alternatives and Recommended Strategy

Expansion Pro. New source of tax revenue for the

community Pro. Creates more jobs Pro. Promotes community expansion Pro. Opportunities for employee growth Con. Associates receive unjust wages due lower

cost products Con. Purchasing practices require manufacture

of goods in third world countries Con. Reduces the value on competing businesses

ImplementationTo implementing and

developing ways to appease who oppose to new constructions.

To implement and get involved with developing a way to ensure employees are getting the right benefits to mirror retail industry’s average worker.

To implementing and establish committees that can perform thorough research.

Evaluation and ControlDevelop “scout”

teams for measure

opportunities

Implement customer

satisfaction surveys

Measure performance

Surveys would greatly help establish to determine products

Yes

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