Walmart

BRIEF INTRODUCTIONWal-Mart is a company based in North America but has become the largest retailer and is larger than any other retail chain in the world. It is clear that Wal-Mart is growing and gaining international power at an alarming rate. Wal-Mart journey from humble beginnings in the 1960s as a folksy discount retailer in the boondocks of Arkansas to a global retailing juggernaut in 2008 was unprecedented among the company of the world: Sales were expected to exceed $400 billion in fiscal 2009. Wal-Mart provides general merchandise: family apparel, health & beauty aids, household needs, electronics, toys, fabrics, crafts, lawn & garden, jewelry and shoes. Also, the company runs a pharmacy department, Tire & Lube Express, and Photo processing center as well.There are also many secondary issues surrounding the Wal-Mart Corporation and its large growth. It is the largest retail company in the United States and has been ranked number one on the Fortune 500 Index by Fortune Magazine. Wal-Mart has four parts to their corporate strategy.1. Dominance in the Retail Market2. Expansion in the U.S. and International Markets3. Creation of Positive Brand and Company Recognition4. Branch Out into New Sectors of RetailIn recent years, Wal-Mart is very active in the market, as the world's largest multinational retailer‟s enterprises. There are more and more stores all over the world, more and more competitors at the same time, if the company wants to maintain their position in the international market, they need to make appropriate strategic transformation to adapt to the development of the international market, this way is useful for the enterprise to survive for a long time.In June 2008, Wal-Mart‟s CEO, H. Lee Scott, presented a glowing report to the est imated 16000 shareholders attending the company‟s annual shareholder meeting held at the 19,000-seat Bud Walton Arena on the University of Arkansas campus, located a few miles from Wal-Mart‟s headquarters in Bentonville, Arkansas.SWOTSTRENGTHScale of operations. Wal-Mart is the largest retailer in the world .It makes Wal-Mart the giant that no other retailer can match. Due to such large scale of operations, the corporate can exercise strong buyer power on suppliers to reduce the prices. It can also achieve higher economies of scale than competitors because of its size. Higher economies of scale results in lower prices that are passed to consumers.Competence in information systems. The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart's efficient procurement.Wide range of products. Wal-Mart can offer wider range of products than any other retailer. It sells grocery, entertainment, health and wellness, apparel and home related products among many other categories and offers both branded and own label goods. Wide range of products attracts more customers to Wal-Mart stores.Cost leadership strategy. This strategy has helped Wal-Mart to become the low cost leader in the retail market. The price of products is lower than supermarket in the around. Wal-Mart reduces the cost about some important meeting and facilities of leadership.The high-speed development of the enterprise. We can see Wal-Mart's net sales, net income and shareholders' equity is growing every year. It shows that in addition to solvency is relatively weak; other indicators have shown Wal-Mart powerful force. Wal-Mart's solvency is weak because it wants to global expansion, for such a high-speed development of business, I think it is acceptable.WEAKNESSWal-Mart…s low cost had resulted in substandard wages and insufficient medical benefits for employees. It has poor work conditions, low wages, unpaid overtime work and female discrimination. Because of this, the workers quality is low.Comparing with other competitors who have focused products, Wal-Mart has lower flexibility. It sells products across many sectors such as clothing, food and other departments. Due to product diversity, Wal-Mart exist competitive weakness.Wal-Mart has a bad image to consumer. Wal-Mart supports sustainable development, but it has more speak than action. On the other hand, awful employee benefit gives the world a bad image.In local branch store, senior executives are accrediting, it‟s contradictory strategyabout localization development. The lack of local mangers can cause culture difference. It is short of interactive management between firm and employees.From table two we can get a conclusion that Wal-Mart stores exist around the world. The big scale takes many problems and the big span in management will reduce controlling force.The table one shows that the Current Ratio is lower than 1.0 since 2004. The Wal-Mart has low ability to pay current liabilities. The Return on Assets came down every year. It proved that company has bad effects on utilization of assets. The Return on Shareholders‟ equity was also declined every year, owners‟ equity can make a profit in a weak level. Based on current assets and current liabilities, it has negative data from 2000-2008, it means Wal-Mart has finance problem.OPPORTUNITYOpenings to win market share from rivals. From example, Kmart, Target and Carrefour. Moreover, in the warehouse club segment the two largest competitors were Costco Wholesale and Sam‟s Clubs.Expanding into new geographic markets. Wal-Mart is expanding aggressively in Brazil and China. But Wal-Mart has not exploited this market fully. Wal-Mart should use localized strategy to open this market entirely.Acquiring rival firms or companies with attractive technological expertise or capabilities. By this approach, the Wal-Mart can decrease its fixed cost when it enters a new market.Falling trade barrier in attractive foreign markets.Online sales via the internet.Sharply rising buyer demand for the industry‟s product.THREATWal-Mart's leading position in the retail industry become the target of all competitors to catch upWal-Mart's global strategy may encounter political issues in operating country.The cost of a variety of consumer products tends to decline because of lower manufacturing costs. The main cause of lower manufacturing costs is to outsource production to low-cost regions of the world. This led to price competition, and caused deflation in some areas. Intense price competition is a threat.The company is operating under high financial risk because of blind expansion.As the result, the company will fall into a debt crisis and make chance for other competitors.Wal-Mart keeps a close relationship with a supplier and makes it difficult for other better suppliers to gain access to Wal-Mart‟s shelf place and consumers, creating a type of entry barrier for those suppliers.PROBLEM1.What is Wal-Mart‟s product choosing?Wal-Mart operates mainly in the choice of varieties of goods sold big, fast turnaround, buy more mid-range frequency of commodity-based, and moderate both high and low commodity combinations.2.Does Wal-Mart have problem about relationships of suppliers and customers?a)About supplies: Wal-Mart plays a god in front of the supplier by buying power. The suppliers are awed and want to get a close relationship with Wal-Mart. Wal-Mart keeps a close relationship with a supplier and makes it difficult for other better suppliers to gain access to Wal-Mart‟s shelf place and consumers, creating a type of entry barrier for those suppliers.b)About customer: Wal-Mart does some bad things which displease the customers. As example, dumped trash at a disposal site, closed a store as a reprisal against unionization, sold guns to violations, sold toy guns with an orange cap at the end of the barrel in New York without permission, ignored customers‟ suggestions and discrimination on female employees.3.What is the use of Acquisitions to expand into Foreign Markets forWal-Mart‟s?In recent years, Wal-Mart‟s entry into Cana da, Mexico, Brazil, Japan, Puerto Rico, China, Germany, South Korea, and Great Britain had been accomplished by acquiring existing general merchandise or supermarket chains.Wal-Mart‟s international stra te gy was to “remain local” in terms of the goods it merchandise, its use of local suppliers where feasible, and in some of the ways it operated.4.What‟s Wal-Mart‟s scientific method?Wal-Mart's leading efficient information system highly respected industry. With its own commercial satellites, Wal-Mart and easily achieve a global networked information systems. Through this network, more than 4,000 stores worldwide available inventory within an hour of each commodity, shelves, sales of all inventory again. Internal and external information systems so that Wal-Mart can be in close contact with suppliers of goods exchanged daily sales, transportation and ordering information, to achieve store sales, ordering and delivery to keep pace.5.Can Wal-Mart improve salary system, management and HR human resource?The answer is affirmative. Wal-Mart has weak competitiveness in these aspects.a)Creating a work environment that enhances the quality of life for employees.b)Wal-Mart can use its IT advantaged to improve management and HR human resource to make closely connection between each store.c)Building a workforce that is diverse with respect to gender, race, national originand other aspects that different people bring to the workplace.6.How to care about protecting the environment and saving energy?a)Wal-Mart has a large number of employees; it can use these employees topromote environmental knowledge.b)Wal-Mart Improves packaging technology, not only can reduce costs, but also toprotect the environment.c)Because too many Wal-Mart stores in around the world，Wal-Mart's can use solarenergy, wind energy and waste oil for heating and cooling.7.Whether should Wal-Mart change its expansion strategy?Answer: In my opinion, the Wal-Mart should slow down its expansion pace. Reasons are as follows:a)The Wal-Mart should ensure the company operates honorably and ethically. InDecember 2005, Wal-Mart transported the materials from stores in California via a return center in Las Vegas before dumping them at a disposal site. This action is unethical.b)The Wal-Mart should conserving resources and sustaining the environment.Although the Wal-Mart has played out lots of environment-friendly policies but they do not put them into practice entirely.c)The Wal-Mart should pay more attention to well-being of employees rather thanexpand blindly. Recent years, the number of workers‟ complaints had grown.8.What is Wal-Mart‟s Price and Promotion strategy?a)Short-term pricing strategies:Loss leader pricing modelBuy more gifts and related purchaseIntegration programs and member ship programsLong-term pricing strategy:Low-cost strategyBe good at set prices-ending pricing strategiesb)Promotion StrategyPR promotions -Use public relations to communicate with the public, establish a good corporate image and reputationAdvertising - Compared with the sales promotion, personal selling, and other marketing tools such as public information, advertising and promotion with its unique position in the enterprise market marketing.Personal selling - Promotional staff through direct contact with customers, allowing consumers to understand the company's products, the establishment of the target audience better image of the enterprise products.。