Walmart Case Analysis..Best Of Pest


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Walmart Case Analysis..Best Of Pest

  1. 1. Assignment Objective <ul><li>Apply the learnings from Lesson 1 to the Walmart Case: </li></ul><ul><li>Visual thinking </li></ul><ul><li>Applying the Strategic Planning Framework </li></ul><ul><li>PEST analysis and using the Internet to access data sources </li></ul><ul><li>Identifying Opportunities </li></ul><ul><li>Matching internal capabilities to market opportunities </li></ul><ul><li>Importance of company culture/leadership </li></ul><ul><li>Achieving financial success </li></ul>
  2. 2. <ul><li>External Factors </li></ul><ul><li>Environment </li></ul><ul><li>PEST Analysis </li></ul>Market Opportunities Resources & Capabilities Environment Industry Competition Strengths & Weaknesses Architecture, Routines & Culture Team: Ben, Anthony, Natalie and Chase
  3. 3. P.E.S.T. Analysis 1970 - 1985 Presented by: Benjamin Fieman
  4. 4. <ul><li>Fiscal Policy has been heavy on spending </li></ul><ul><ul><li>The average spending deficit in this time is 2.95% of GDP, and trending upwards </li></ul></ul>1970-1985 Source: Sandro Olivieri
  5. 5. National Debt was increasing
  6. 6. <ul><li>Monetary Policy </li></ul><ul><ul><li>Interest rates throughout this time period trend upward from a low of under 4% to a high of just above 18% </li></ul></ul><ul><ul><li>The dips in rate made it easier for banks to lend Wal-Mart the money it needed to lease new stores, and correlate with high growth periods </li></ul></ul><ul><ul><li>1971-1973: begins operations in Tennessee, Kentucky, and Mississippi </li></ul></ul><ul><ul><li>Early 1980s: continued westward expansion beyond Texas </li></ul></ul>1970-1985 Source:,,id=98123,00.html Sandro Olivieri
  7. 7. Oil prices went through the roof! Ali Yardi
  8. 8. The US economy experienced severe inflation Kenny Troop
  9. 9. Fed aimed to tame inflation...Interest rates were at an all time high in 1982!
  10. 10. 1982 Recession was severe and lasted long Ali Yardi
  11. 11. Unemployment rate exceeded 10%
  12. 12. Kaustubh Thakur Economy was in the throes of “stagflation”-- high inflation and high unemployment `
  13. 13. Purchasing power declined
  14. 14. Consumer Sentiment dipped to the lowest level ever in 1980 Kaustubh Thakur
  15. 15. Economic Troubles (1974 - 1985)‏ Source: 73 - 75: Stagflation 75 - 80: Uneasy growth; stagflation continues 80 - 81: Short Recession 81 - 82: Deep Recession Maureen Stafford
  16. 16. Economical changes! <ul><li>Stagflation </li></ul><ul><li>Oil shock </li></ul><ul><li>Unemployment </li></ul>HongChul Jun
  17. 17. Social Trends Album of the Year: Saturday Night Fever Best New Artist: A Taste of Honey Best Pop Duo or Group: Saturday Night Fever, Bee Gees Best Pop Female Vocal: “You Needed Me,” Anne Murray Best Pop Male Vocal: “Copacabana” (At the Copa), Barry Manilow Record of the Year: “Just the Way You Are,” Billy Joel Song of the Year: “Just the Way You Are,” Billy Joel, songwriter
  18. 18. Prevailing Socio-Cultural factors <ul><li>Increasingly better informed consumers since WWII. </li></ul><ul><li>TV had intensified advertising by manufacturers. </li></ul><ul><li>Government standards also bolstered consumers’ self-confidence. </li></ul><ul><li>Wanted cheaper , self-service retailers (ie. discount chains). </li></ul><ul><li>Discounters’ sales grew to $68B in 1985. </li></ul>Natalie Rebot
  19. 19. Technological changes HongChul Jun
  20. 20. Technological Change Wal-Mart did not base orders for must SKU’s on centralized sales forecasts. Rather, they created in-store terminals to communicate with their distribution centers that supplied the stores. If stocking levels were low, inventory was automatically ordered. Kenny Troop
  21. 21. Walmart PEST Impact Matrix <ul><li>Economy in “stagflation” </li></ul><ul><li>Interests rates high </li></ul><ul><li>Unemployment rate high </li></ul><ul><li>Discount stores growing </li></ul><ul><li>Consumers better informed </li></ul><ul><li>Discounters like K-Mart focused on metro markets </li></ul><ul><li>Sam Walton sees opportunity for discount stores in non-metro markets!! </li></ul><ul><li>Sam Walton recognizes that IT will play a big part in </li></ul><ul><li>creating a competitive advantage for WMT </li></ul><ul><li>Sam Walton creates his Vision, Mission and Goals </li></ul>
  22. 22. Wal-Mart to the Rescue! <ul><li>↑ Unemployment + ↑ Interest Rates + ↑ CPI </li></ul>= Maureen Stafford
  23. 23. Walmart succeeds in a tough economy!! Wal-Mart Performance (In Millions)‏ U.S. Economy Paranjay Soedradjat