2013

WAL-MART
STRATEGIC MANAGEMENT
STRATEGY ANALYSIS in 2009

12/9/2013
THE MISSION AND VISION STATEMENT OF WAL-MART

Vision: According to our

research

Walmart does not have a proper

vision statement.

Mission: Walmart provide goods

and services at an everyday low
price with exteded customer
sevice ... always

-- in retail stores, online and through their mobile devices. Each week, more than 245 million
customers and members visit our 11,000 stores under 69 banners in 27 countries and e-commerce
websites in 10 countries. With fiscal year 2013 sales of approximately $466 billion, Walmart
employs 2.2 million associates worldwide.

Objectives and strategies:

Walmart desires to offer the lowest price on the market. On that purpose, it developed some pricing
strategies for its products. Walmart says there are three types of shopping which are called stock-up
mission that takes and gathers the families around the nation, basic grocery run when its customer
wants to access the products easily when they‟re in need of them and immediate access.
Considering these three types Walmart developed a strategy, which will help them compete with its
rivals nationwide easily. Additionally, dividing the products into segments, which will be distributed
to those three types of stores, will increase its sales efficiently.

On one hand, Walmart keeps on looking for opportunities to invest in price. Thus, alcohol
consuming especially „beer‟ in USA is one of the major opportunities and Walmart wants to become
the biggest beer retailer nationwide. On that purpose, Walmart continues lowering the prices and
acquiring more and more customers in return.

On the other hand becoming widespread around the world is Walmart‟s concern. So, they invest in
ecommerce to increase its sale and grow overseas the world by offering quality products at a
affordable price.

Developing a Mission and a Vision Statement

Mission: The market is like an ocean and our firm is like a vessel, which we try to take our products
and services and provide for every households at an affordable price when dropping the anchor to
every harbor we visit all around the world with the best help of our seamen which we take good care
of.

Vision: We would like to become the best retailer of all the world.
THE STRATEGY- FORMULATION ANALYTICAL FRAMEWORK

STAGE 1 – THE INPUT STAGE

THE EXTERNAL FACTORS, OPPORTUNITIES AND THREATS

OPPORTUNIES THREATS

1. The growth of online shopping 1. Increasing competition with new

sector
2. Ease to shopping
3. Potential of Asian countries
4. Recovey of economical objectives
around the world
5. Currency power
6. Merchandise from other retailers is
being offered through walmart.com
entrants
2. People‟s royalty to local competitors
3. Not considering consumer trends
4. Political issues of respective countries
5. Online competitors increase the level
of competition
6. Technological product turnover is high

THE EXTERNAL FACTOR EVALUATION (EFE) MATRIX

KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED SCORE

OPPORTUNIES
1. The growth of online shopping 0,15 4 0,60
sector
2. Ease to shopping 0,13 4 0,52
3. Potential of Asian countries 0,06 3 0,18
4. Recovery of economical objectives 0,10 4 0,40
around the world
5. Currency power 0,12 4 0,48
6. Merchandise from other retailers is 0,07 4 0,28
being offered through walmart.com
THREATS
1. Increasing competition with new 0,06 1 0,06
entrants
2. People‟s royalty to local 0,02 1 0,02
competitors
3. Not considering consumer trends 0,05 1 0,05
4. Political issues of respective 0,06 2 0,12
countries
5. Online competitors increase the 0,11 2 0,22
level of competition
6. Technological product turnover is 0.07 2 0,14
high
TOTAL 1,00 3,07
 COMPETITIVE PROFILE MATRIX (CPM)

WAL-MART TARGET K-MART

Critical WEIGHT RATING WEIGHTED RATING WEIGHTED RATING WEIGHTED
Success SCORE SCORE SCORE
Factors
Advertising 0.20 4 0.80 3 0.60 2 0.40
Product Quality 0.10 2 0.20 4 0.40 3 0.30
Price 0.10 1 0.10 1 0.10 1 0.10
Competitiveness
Management 0.50 3 0.15 4 0.20 3 0.15
Financial 0.10 4 0.40 3 0.30 2 0.20
Position
Customer 0.10 4 0.40 3 0.30 1 0.10
Loyalty
Global 0.10 4 0.40 1 0.10 2 0.20
Expansion
Inventory 0.10 3 0.30 3 0.30 3 0.30
Systems
Market Share 0.05 4 0.20 3 0.15 2 0.10
Customer 0.10 3 0.30 4 0.40 3 0.30
Service
TOTAL 1.00 3.25 2.85 2.15

Competitive profile matrix (CPM) shows wheather a firm is better than its rivals internally in the
market. If a company weighted score, calculated by weight and rating which are points given each
strengths and weaknesses, is higher than its rivals, its means that the company dominate the
market and has a strong competitive advantage. On the other hand, a company has lower weighted
score than its rivals, the company has a competitive disadvantage.
The company has greater weighted score than its rivals which are Target and K-Mart, so Wal-Mart
dominate the market more than its rivals. Second dominater is Target, because it has greater
weighted score than K-Mart. Besides K-Mart is the last dominator because of the lowest weighted
score.
INTERNAL FACTORS, STRENGTHS AND WEAKNESSES

STRENGTHS WEAKNESSES

1. More sophisticated electronics 1. Decrease in assets

products 2. Openned only 4 stores in 2009
2. Distribution channels are reliable 3. Employee turnover is high
3. Market share is high 4. Lack of the market research in
4. Employees‟ morale is high Europe and Asia
5. Effective management plan 5. Little differentiation
6. Net income and sales are high
7. Having a web site
8. Cost advantege over competitors
9. Openned stores in all 50 states in 5
years
 THE INTERNAL FACTOR EVALUATION (IFE) MATRIX
KEY INTERNAL FACTORS WEIGHT RATING WEIGHTED
SCORE
STRENGTHS
1. More sophisticated electronics products 0,08 3 0,24
2. Distribution channels are reliable 0,07 4 0,28
3. Market share is high 0,10 4 0,40
4. Employees‟ morale is high 0,06 3 0,18
5. Effective management plan 0,05 3 0,15
6. Net income and sales are high 0,10 4 0,40
7. Having a web site 0,06 4 0,24
8. Cost advantage over competitors 0,08 4 0,32
9. Openned stores in all 50 states in 5 years 0,08 4 0,32
WEAKNESSES
1. Decrease in assets 0,03 2 0,06
2. Openned only 4 stores in 2009 0,06 1 0,06
3. Employee turnover is high 0,07 2 0,14
4. Lack of the market research in Europe 0,08 2 0,16
and Asia
5. Little differentiation 0,08 2 0,16
TOTAL 1,00 3,11

Accourding to the internal factor evaluation matrix(IFE), if the score is above 2,50, it means that
the company has a strong internal position. An internal factor could be included twice in the IFE
matrix, if the factor is both strength and weakness.
In case of Wal-Mart, the total weighted score is above the average 2,50, is means that Wal-Mart is
strong internally.
STAGE 2 – THE MATCHING STAGE
SWOT MATRIX

STRENGTHS WEAKNESSES
OPPORTUNITES - High sales volume of online - Openned new stores in Europe
shopping ( O1, O2 ; S2, S6, and Asia ( O3, O4, O5 ; W11,
S7 ) W13 )
- Ease to shopping via wide
range of products (O2 ; S1 ,
S2 )
- Gain from currency (O5 ; S6
)

THREATS - Supply job to small town to - Manufacture more in U.S. ( T1,

gain loyalty ( T2, S4) T5 ; W1)
- Cope with entrants who are - Not considering consumer trends
 the new competitors (T1 ; ( T3 ; W5)
S5)

SPACE MATRIX

Financial Strengths (FP) Environmental Stability (EP)

- Liquidity............................. 5
- Working capital................. 5
- Inventory turnover............. 6
- Cash flow.......................... 5
- EPS................................... 5
TOTAL................................... 26
AVERAGE............................. 5,2
- Technology changes....................... 2
- Demand variability........................... 2
- Price range of completing product....1
- Price elasticity of demand.................4
- Risk involved in business................. 2
TOTAL...................................................11
AVERAGE............................................2,2

Competitive Advantage (CP) Industry Strengths (IP)

- Market share............................1
- Product quality.........................3
- Product life cycle.....................2
- Costomer loyalty.................... 4
- Control supplier&distributors.. 1
TOTAL..........................................11
AVERAGE...................................2,2
- Growth potential................ 4
- Profit poteltial......................5
- Ease of entry into market.. 4
- Productivity........................ 5
- Financial stability............... 6
TOTAL.................................... 24
AVERAGE..............................4,8

Wal-Mart is an
the aggressive
position in the
market because of
the point (2,6 : 3).
The point of 2,6 is
found by gathering
4,8 and -2,2 which
show how well
industry position
and competitive
advantage, and 4,8
shows Wal-Mart
has a purely good
industry position,
and -2,2 shows
Wal-Mart do not
have a weak
competitive
advantage. The
point of 3 is found
by gathering 5,2 and -2,2 which show financial and environmental position, 5,2 shows Wal-Mart has
a so good financial position, and -2,2 shows Wal-Mart do not have a weak environmental position.

BCG MATRIX

Wal-Mart have a high market share and also high industry growth rate, therefore it is on the stars
position of BCG matrix.
Strategic choices: Vertical integration, horizontal integration, market penetration, market
development, product development.
INTERNAL- EXTERNAL MATRIX

The region
of 1,2,4 is called Grow
and Build ; the region
of 3,5,7 is is called Hold
and Maintain ; the
region of 6,8,9 is called
Harvest and Divest.
When we put down
the score of EFE and
IFE, it shows Wal-Mart
is on the Grow and
Build region.

The strategies that

Wal-Mart can follow are
Market Penetration,
Market Development,
Product Development,
Backward Integration,
Forward Integration,
Horizontal Integration.

GRAND STRATEGY MATRIX

 Because Wal-Mart has a
strong competitive
position and the market
is growing rapidly, it is on
the Quadrant 1.
Therefore it can follow the
strategies that are market
penetration, market
development, product
development, backward
integration, forward
integration, horizontaln
integration as you see on
the table below.

STAGE 3 – THE INPUT STAGE

QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

Market development Backward Integration Unrelated Diversification

OPPORTUNIES Weight Attractiveness Total AS TAS AS TAS

Score (AS) Attractiveness
Score (TAS)

1. The growth of online 0,15 1 0,15 - - 2 0,30

shopping sector
2. Ease to shopping 0,13 4 0,52 2 0,26 3 0,39

3. Potential of Asian 0,06 3 0,18 1 0,06 4 0,24

countries
4. Recovery of 0,10 3 0,30 - - 2 0, 20
economical
objectives around
the world
5. Currency power 0,12 2 0,24 - - 1 0,12
6. Merchandise from 0,07 - - 4 0,28 2 0,14
other retailers is
being offered
through
 walmart.com

THREATS
1. Increasing 0,06 4 0,24 - - 3 0,18
competition with
new entrants
2. People’s royalty to 0,02 2 0,04 1 0,02 1 0,02
local competitors
3. Not considering 0,05 - - - - 1 0,05
consumer trends
4. Political issues of 0,06 1 0,06 - - - -
respective countries
5. Online competitors 0,11 1 0,11 - - - -
increase the level of
competition
6. Technological 0.07 - - - - - -
product turnover is
high
TOTAL 1
STRENGTHS
1. More sophisticated 0,08 1 0,08 - - - -
electronics products
2. Distribution channels 0,07 3 0,21 4 0,28 3 0,21
are reliable
3. Market share is high 0,10 2 0,20 1 0,10 1 0,10
4. Employees’ morale is 0,06 - - - - - -
high
5. Effective 0,05 - - - - - -
management plan
6. Net income and sales 0,10 2 0,20 3 0,30 2 0,20
are high
7. Having a web site 0,06 - - 1 0,06 - -
8. Cost advantage over 0,08 - - 3 0,24 1 0,08
competitors
9. Openned stores in all 0,08 4 0,32 - - 1 0,08
50 states in 5 years
WEAKNESSES
1. Decrease in assets 0,03 3 0,09 3 0,09 1 0,03
2. Openned only 4 0,06 2 0,12 - - - -
stores in 2009
3. Employee turnover is 0,07 2 0,14 3 0,21 1 0,07
high
4. Lack of the market 0,08 4 0,32 - - 2 0,16
research in Europe
and Asia
5. Little differentiation 0,08 - - 4 0,32 3 0,24
TOTAL 1 3,52 2,22 2,81

As it is seen in the Quantitative Strategic Planning Matrix, because of the highest score that is
3,52 the strategy that Wal-Mart should follow is market development.
How is the score of market development strategy obtained?
- Write down the all external and internal factors that it is written already above in the EFE
Matrix and IFE Matrix with the its weight.
- Ask the question “Does this factor affect the choice of strategies being made?”. If the answer
is yes, then decide if the effect is not attractive, or high attractive accourding to the range of
1 – 4 . If the effect of the factor is high atractive, its score will be 4, but the effect is not
attractive, its score will be 1. On the other hand if the answer is no, then the attractive score
is 0.
- After the calculation of total attractive score for each stratagy, select the highest score,
because it is the best strategy for the any firm for the future.