Running heading: ETHICS AND COMPLIANCE PAPER 1

Ethics and Compliance Paper Team Members FIN/ 370 Date Instructor Name

Running heading: ETHICS AND COMPLIANCE PAPER 2 Ethics and Compliance Paper Wal-Mart is a global company with many entities that extend and represent WalMart as a whole. A company as large as Wal-Mart pays great attention to detail when utilizing strategic planning, as any small loss can be amplified and felt. That is why using the correct approach in strategic planning, can dictate what is available financially, or if other means are needed to make the project a financial success. So as you can see, both strategic and financial planning depend on one another to create the best plan moving forward. There are many strategies that companies utilize, we decided that S.W.O.T. best suits Wal-Marts dynamic functions as a major corporation. What exactly is SWOT, and what does it mean? According to Minton a SWOT analysis is a, strategic tool to assess an organizations Strengths, Weaknesses, Opportunities and Threats (Minton, 2010). A SWOT is a standard four quadrant matrix with data for each of the four key areas typically represented by bullet points in each quadrant. Minton explains, There is nothing off-limits (at least initially) in a SWOT exercise. When identifying threats, direct competitors can be added as threats, all the way up to market forces beyond your company's control. Not only can the organization as a whole look at a SWOT, but departments can create smaller, more narrowly focused SWOTs that take into consideration what they are specifically looking at (Minton, 2010).

Running heading: ETHICS AND COMPLIANCE PAPER 3 The best practice in formulating the information captured in a SWOT is to use the Five Forces of Competitive Position. Minton describes the five forces as, 1) Rivalry among existing competitors; 2) Threat of new market entrants; 3) Bargaining power of buyers; 4) Bargaining power of suppliers; and 5) Threat of substitute products or services (including technology change) (Minton, 2010). Once the data is captured and the SWOT analysis is completed, the appropriate organizational metrics are created to determine how the organization performs against the analysis. All of this affects decisions in the financial planning process. The initiative of using SWOT analysis lets Wal-Mart peer into their competitive market, while comparing themselves to their competitors. According to the Small Business Chronicle, Every company--even the largest ones that dominate their markets--has a finite supply of manpower, production capacity and capital. Evaluating the companys strengths helps it determine how to allocate these resources in a manner that will result in the highest possible potential for revenue growth and profitability, (Hearst Communications, 2013). SWOT uses resources already in use, thus cutting financial costs, and financial planning needed to move forward. After all, money is everything to make or break it, and here is why using SWOT will save Wal-Mart Money. Before implementing necessary changes using SWOT analysis, businesses can evaluate the costs ahead of time. Strengths will reduce cost involved where as weaknesses can be costly, they position the company in a vulnerable state. A company like Wal-Mart faces market restrictions that can be expensive, strong competitors such as a Target, Dollar Tree and Aldi affect the companys success in sales. Also positioning a store in a location where there are more strict market regulations can be costly as well. Wal-Marts global market has international trade and local government regulations to abide in order to do business in such market. Surprisenly, the biggest weakness that Wal-Mart faces involves a negative reputation as an

Running heading: ETHICS AND COMPLIANCE PAPER 4 employer. Wal-Mart faces labor lawsuits each year ranging from poor work environment to low wages to other unfair labor practices. Litigation fees can be a strong threat to any business regardless of size and success. Evaluating your strength and weaknesses help prepare a company to take advantages of opportunities for improvement, identify possible threats that can interfere with the companys investment returns. The cost to run SWOT is only half the picture, what can it do to the companys sales or return on the project ultimately is the deciding factor. Wal-Mart is doling out hundreds of millions of dollars for "Project Impact," an ambitious five-year push to de-clutter its stores to make them more shopper-friendly. But having less merchandise on display has put a serious crimp in sales for some categories and dinged suppliers. "They solved half of the problem, which was un-cluttering the stores," said a person familiar with Wal-Mart. "That leaves them with the other half of the problem: how to make up for the lost sales" from removing millions of square feet of prime merchandising space. The conundrum of lost sales is real, but the "solution" to put the program on hiatus is being dismissed by some as wishful thinking on the part of suppliers. Either way, it's sure to be a hot topic when Walmart meets with investors and analysts in the retailer's hometown this week. The trouble is, Walmart has always enjoyed considerably better sales per square foot than Target. And part of the reason, some suppliers believe, has been all those merchandising displays that clutter the aisles but also prompt impulse purchases. Wal-Marts strategy is definitely shaking things up in the supplier world. Suppliers have been growing sales by growing SKUs and driving promotions, and Wal-Mart is taking both away. I expect many small suppliers to go out of business. The larger suppliers will have to give up shelf space in favor of private label. Suppliers must channel larger investments in innovation and brand building, and work harder with the other retailers to grow their categories.

Running heading: ETHICS AND COMPLIANCE PAPER 5 While a companys analysis of its financial health assessment seems like a golden opportunity to identify any potential risks for their future, there are certain issues that may be a potential risk. The first step of planning may not appear as intense as it really stands, because there are probably many contenders on managerial levels helping with different ideas for a plan of attack. This seems grand, but when a company is as big as Wal-Mart the approach is questionable and places a cloud of pondering about the risk of the initiative to analysis the companys finance. According to Markgraf, The most important part of a SWOT analysis is to improve the viability of your company. Important threats coupled with a company weakness typically put at risk your company's future, and the SWOT analysis identifies these risks. Your analysis pairs external threats with internal weaknesses to highlight the most serious issues faced by your company. For example, a new competitor entering a major business line where you have invested heavily without results might be a serious issue. You can then decide whether it is most appropriate to eliminate the internal weakness or reduce the external threat. You can eliminate internal weaknesses by assigning company resources to fix the problems. You can reduce external threats by abandoning the threatened area of business or meeting the threat after strengthening your business (para. 4). In conclusion, many companies do a form of SWOT analysis on their key competitors. Wal-Mart will excel using SWOT, because when its combined with the information from the companys SWOT analysis of itself, management can begin to look at the bigger picture of they should position itself against competitors. If Wal-Mart wants to attack competitors

Running heading: ETHICS AND COMPLIANCE PAPER 6 weaknesses with its own strengths to maximize profits, SWOT analysis initiative is the best solution, as it does not want to meet a competitors strengths head on, but rather find that chink in the armor.

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References Hill, Brian. (2013). Why Perform a SWOT Analysis? Retrieved from: http://smallbusiness.chron.com/perform-swot-analysis-5050.html Markgraf, B. (2013). The Two Most Important Parts of SWOT Analysis. Retrieved from http://smallbusiness.chron.com/two-important-parts-swot-analysis-61546.html. Minton, G. (2010). Using a SWOT analysis. Mortgage Banking, 71(3), 80-81. Retrieved from http://search.proquest.com/docview/820531614?accountid=458 Neff, Jack, In Reducing Floor Clutter, shopper-Friendly Initiative Dents Receipt, Supplier Return. Published October 19, 2009 SWOT-Wal-Mart. (2013). Retrieved From: http://www.strategicmanagementinsight.com/swot-analyses/walmart-swot-analysis.html Wal-Mart (2013). Wal-Mart Corporate. Retrieved from: http://corporate.walmart.com/?povid=P1171-C1093.2766-L4

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Running heading: ETHICS AND COMPLIANCE PAPER 9 References St-Onge, M., Keller, K., & Heymsfield, S. (2003) Changes in childhood food consumption patterns: a cause for concern in light of increasing body weights. American Journal of Clinical Nutrition, Vol. 78, No. 6, 1068-1073, December 2003