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Walmart : Study of its internal and external Business Economic Environment and SWOT analysis

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  1. 1. The Business Environment
  2. 2. Agenda• Internal Environment– Mission & Objectives– Value System– Management Structure & Financials– Human Resources– Company Image & Brand Equity– R&D Capability
  3. 3. Agenda• External Environment– Micro Environment• Suppliers• Customers• Competitors– Macro Environment• Economic• Political• Socio-Cultural• Technological• Natural• SWOT Analysis
  4. 4. Internal Environment• Mission Statement & Objective“We Save People money so they can live better.”
  5. 5. Internal Environment• Value System– 3 Basic Beliefs & Values• Respect for the Individual• Service to Our Customers• Striving for Excellence
  6. 6. Internal Environment• Value System– Open Door Policy• Manager’s Doors are open to employees at all levels– Sundown Rule• Answering employee, customer and supplier queries onthe same day– Grass Root Process• Capturing suggestions and ideas from the sales floorand front lines
  7. 7. Internal Environment• Value System– 10 Foot Rule• Making eye contact, greeting, and offering help tocustomers who come within 10 feet– Servant Leadership• Leaders are in service to their team– Wal – Mart Cheer• Chant created by founder Sam Walton to lift the moraleevery morning
  8. 8. Internal Environment• Background– Started by Sam Walton in 1962 inRogers, Arkansas– Headquarters in Bentonville, Arkansas– Largest grocery retailer in USA– 10,700 stores in 27 Countries under 69 differentnames
  9. 9. Internal Environment• Management Structure & Financials
  10. 10. Internal Environment• Human Resource– Employs 2.2Million people around the world earningbetween $50,000-$1,70,000 a year– Employee Emphasis on• Integrity• Respect• Open Communication• InnovationWhether a part-time job or the career of alifetime, working at Walmart meansopportunity!
  11. 11. Internal Environment• Image & Brand Equity– Most Valuable Retail Brand with a worth of $34.4Billion– Walmart follows• Environment Sustainability• Fight Against Hunger• Women’s Economic Empowerment• Diversity & Inclusion• Ethical Sourcing• Veteran’s & Military Families
  12. 12. External Environment• Micro Environment– Suppliers• National Product Suppliers• Local Product Suppliers• Service & Non-Resale Suppliers• Direct Import & Global SuppliersThere are a total of more than 100,000 suppliers forWalmart world over!
  13. 13. External Environment• Micro Environment– Suppliers• Standard For Suppliers– Compliance With Laws– Voluntary Labor & Labor Hours– Proper Compensation– Health & Safety– Financial Integrity & Anti-Corruption
  14. 14. External Environment• Micro Environment– Suppliers• Audit Process– Opening Meeting– Factory Tour– Employee Interviews– Documentation Review– Closing Meeting & Signing Onsite Report• Four Outcomes– Green– Yellow– Orange– Red
  15. 15. External Environment• Micro Environment– Suppliers• 3000 + Suppliers• National Minority Supplier Development Council• Women’s Business Enterprise National Council• Disability Supplier Diversity Program
  16. 16. External Environment• Micro Environment– Customers
  17. 17. External Environment• Micro Environment– Customers• Wholesale• Retail• Industrial• Government• Foreign
  18. 18. External Environment• Micro Environment– Competition for Walmart (Industry Competition)• In USA– Kmart– Target– ShopKo– Meijer• In Canada– Real Canadian Superstore– Giant Tiger• In Mexico– Comercial Mexicana– Soriana
  19. 19. External Environment• Micro Environment– Competition for Sam’s Club (Industry Competition)• Costco• BJ’s Wholesale Club
  20. 20. External Environment• Macro Environment– Economic• With its operations spread worldwide, and majority ofbusiness coming from USA, Walmart post recession hassuffered a loss in sales but has not been severelyaffected due to sheer volume and presence in othereconomic zones• Economic Impact of Host Country– Challenges of high interest rate– Higher fuel & energy cost– Inflation– Higher level of unemployment– Higher Tax Rates
  21. 21. External Environment• Macro Environment– Political• Political environment is again region specific andWalmart currently is not facing any major political issuesexcept in India with the fight over 100% FDI in retail• Failure in Germany occurred because Walmart could notsell its products below the prices fixed in the Euro Zone
  22. 22. External Environment• Macro Environment– Socio-Cultural• Perfectly suited for the US Market• Failure in Germany & China due to standards set byWalmart and Organizational Cultural Clashes• In current markets there is an increase in urbanizationand habits & preferences which would suit the cause ofWalmart
  23. 23. External Environment• Macro Environment– Technological• With one of the best and most sophisticated logisticssoftware and many other new innovations to their creditin Retail Management, Walmart has always been a frontrunner when it comes to Technological Advancements inits field and puts back a huge sum back on R&D so that itcan maintain its position as the No.1 Retail Brand
  24. 24. External Environment• Macro Environment– Natural• To be supplied 100% by renewable energy• To create zero waste• To sell products that sustain people and the environment
  25. 25. SWOT Analysis• Strengths– Huge & Loyal Customer Base– Strong Employee Base– Strong Financial Position– Lowest Prices offered in the Retail Industry– Widest Range of Product Offerings– Core Competencies including IT, Supply Chain &Inventory
  26. 26. SWOT Analysis• Weaknesses– Mass procurement  Overstocking– Sheer size leads to complications– Strong only in the Host Nation
  27. 27. SWOT Analysis• Opportunities– Expansion in International Markets– Online Products for Sale– Acquiring suppliers, further reducing costs– Expand Brand Portfolio
  28. 28. SWOT Analysis• Threats– Economic Slowdown in Host Country– Government Regulations– Increase in Competition– Changes in Tax Rates & Exchange Rates
  29. 29. Thank You