BPP4133STRATEGIC MANAGEMENT CASE STUDY PRESENTATION
Team MembersNABILAH BINTI MOHAMAD PB08028MAIMUNAH BINTI AMANAH PB08063NURUL NAJWA BINTI ABDULLAH PB08078IBRAHIM BIN KASIM PB08030YUSMIN BIN JAFFAR PB08049
QUESTION 1 How can Wal-Mart Stores and Sam’s Club increase same-store sales?• Maintaining the strength of the provided services or items to be sold in each location between these 2 stores• Program expansion for each segment regarding to their product or services to be sold to customers (product/services variety)• Implementing the proposed strategies:
Wal-Mart Stores Sam’s ClubMimicking competitor’s Reinvigorating the brandLocalizing selections Improve inventory managementAppealing Optimize the “in-club experience”
Question 2 How should the company capture share of middle- and upper-income wallets?- sell inferior goods for which demand increases when income falls (low price).- provide substantial services- provide appropriate products for each location- strategic leaders – 8leaders- always take initiatives in order to satisfy customers- creates value for customers – highly efficient and innovative supply chain management operation- put customers first (prime focus) – customer-focused strategies
Question 3Should Wal-Mart Stores fully retreat from fashion- forward merchandising and marketing? No. as mentioned, they moved too quickly in this strategy. They should make it slowly to see the response from the customers. So, they only have to retreat partially.
Question 3Will it’s neighborhood-store-localizationstrategy increase sales enough to offset the associated cost?
• Neighborhood store localization will increase sales and should be enough to offset the associated costs.• Launched 6 different types of customized stores to attract difference demographic.• More to “store of the community”• Reflect the individual needs of each neighborhood.
Question 3 What should it do to make it’s new 3-types-of-customers segmentation strategy work?
• Have more of a neighborhood feel to it.• Provide better quality items.• Developing unique, innovative product and providing distinguished brand.• Reduce the product on shelves and widen the aisles.• More UPC scanners in the store.
QUESTION 4Should company spin off Sam’s Club? Ifnot, what should it do to compete more effectively against Costco?
In desperate times, spinning off Sam’s Clubcan be considered as a good idea to give Wal-Mart the room to breath as Wal-Mart isalready have stores in U.S and fast-growinginternational operations.Due to the stock price soared for the last fewyears under the leadership of Lee Scott,spinning off Sam’s Club can help to increasestock price a little bit plus allowing Wal-Martto focus more on its other fast-growingmarketing segmentation.
QUESTION 5ls Wal-Mart expanding the right kindof new stores at the right pace and in the right places?
• Yes, because Wal- Mart’s international’s U.K. – based Asda subsidiary brings in the largest share of the company’s international revenue, at 37.4 percent. Then, Wal- Mart de Mexico provides the next largest share, at 23.6 percent of Wal- Mart International sales.• Unfortunately, Wal- Mart face difficulties to obtain the scale and results that targeted such as in Germany and South Korea due to providing inappropriate products for that location.
QUESTION 5How and where should the company continue to grow internationally?
• Prioritize “where the greatest growth and greatest return exist”- called “majoring in the majors” include the America primarily, followed by U.K. and Japan, as well as China and India over the long term.• Two types of strategy which are “focused portfolio execution” and global average or “taking full advantages for their worldwide assets, including formats, Information System, purchasing organizations, category expertise, and shared best practices.
QUESTION 5Should Asda buy J. Sainsbury?
• Yes, because as the second –largest in U.K., Asda should acquiring the third- largest U.K. retailer, the J. Sainsbury to better compete with U.K. leader- Tesco.
QUESTION 6 What will it take to restore thecompanys reputation in the United States?
• Pursuing two key strategy to overcome external issues affecting the company, including environmental and community-impact issues, among others.• Strategies include “sustainability efforts” and “localized charitable” which giving show it as being a responsible corporate citizen and a good neighbor.• Launched its global environment sustainability initiative in 2004.
• Wal-Mart has beefed up pro-community, pro-sustainability, , and pro-health information on its website, television ads, and annual report.• For example: launched In Front with Wal-Mart a 30-minutes television show arising on the lifetime and USA networks that give Wal-Mart a chance to show case its incredible associates and the variety of ways they give back to their communities, bettering the lives of America’s working families and shed light on some of Wal-Mart eco-friendly practices.• Stresses its benefit to suppliers and communities, as well as its commitment in providing affordable health care and competitive wages for its associates.
QUESTION 7Should Lee Scott change Wal- Mart’s course? If so, how?
• Diversify products, merchandising and marketing strategy based on their strength as one of the top ten global retailer - Large scale of operations, powerful retail brand, pricing advantage, efficient logistic system• Overcome weaknesses - Continuous product recall, community relations problems, environmental issues• Opportunities - IT development, opportunities in developing countries such as Asia• Effectively manage threats - Intense competition, foreign currency fluctuation, recession, expansion issues
SWOTSTRENGTH WEAKNESSES•Large scale of operations •Continuous product recall•Powerful retail brand •Community relations problems•Pricing advantage •Environmental issues•Efficient logistic systemOPPORTUNITIES THREATS •Intense competition•IT development •Foreign currency fluctuation•Opportunities in developing •Recessioncountries such as Asia •Expansion issues
Should replaceRob Walson Lee scott? If so, when and with whom?
WHEN?As of 2004 Wal-Mart was the worlds most-sued entity, after the U.S. government. Thecompanys lawyers faced an astonishing arrayof legal challenges from tort cases—oftenreferred to as "slip-and-fall" suits—tolarge, class-action suits filed by employees.
Michael T. Duke
• Michael T. Duke is a longtime Scott’s protege. As such, Duke is not expected to veer far from the course set by Scott.• Given his previous role as head of international operations, Duke is likely to expand Wal-Marts presence in Russia and China to offset slowing growth at home.• Risk taker and strategic thinker• Moreover, Duke is the best candidate there is as he have similarities with Lee Scott that can benefit Wal-Mart in many ways.• Plus, Duke is more of people person rather than Lee Scott and this might actually help to overcome issues concerning employee-employer relationship
Memo by Rob Walton regarding theretirement and replacement of Lee Scott with Michael T. Duke to Wal-Mart employees on November 21st 2008
“Mike has had broad experiencethroughout the company, havingsuccessfully led the Logistics Division,U. S. operations and Internationaloperations. Many of you have workedfor Mike, and know first-hand why heis a highly respected executive bothdomestically and internationally. Heunderstands retail and appreciates thecomplex global environment in whichwe operate. Mike is committed to ourcompanys culture, its mission and toour associates and customers, and hehas built strong teams wherever hehas led”