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.Land availability.Electricity usage.Oil and Gas usage.Water scarcity.Hazardous waste

storage, transportation and disposal.

External EnvironmentSWOT Analysis

External EnvironmentSocietal EconomyEconomic Interest rate increases (T).Economic deterioration (O) Increasing commodity costs. (T) Increasing transportation costs.

(T)Currency fluctuations. (T)Technology

Usage of RFID (O)Internet presence (O)Information technology increasingly

important. (O)

External EnvironmentPolitical-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)

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 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) Corporate ResourcesMarketing Advertising costs are expensed as incurred and were $1.6

billion in 2006. Advertising costs consist primarily of print and television advertisements.

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&DMore involved with the development side. (W)Focused on expansion and development. (W)OperationsWal-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 EnvironmentHuman ResourcesEmployees 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 SystemsLeader in RFID

technology. (S)Good internet presence.

(S)Utilizes satellite

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

Analysis of Strategic FactorsStrengthsInternational brand

name.Financial position.Market leadership.

WeaknessesMarket 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 FactorsOpportunitiesInternational

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

Implementation

Evaluation and Control

References