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CASE- WALMART

Prepared By Group: BLACK SHADOW Members Name Taki Tahmid Farzana Noor Nayma Iftakhar Mousumi Md. Nazmul Alam Srezon Iffat Jahan ID 11102032 11102036 11102047 11102048 11102056 11102050

I. Current Situation A. Current Performance Patrick Hunn, team leader of Wal-Mart Sales, for Vlasic Foods International, had made a record-breaking deal with Wal-Mart that resulted in selling more pickles than Vlasic had ever sold to any one account. Wal-Mart was an important customer, accounting for 30% of Vlasic Foods sales. By negotiating a deal with Wal-Mart to offer a gallon jar of Vlasic pickles for $2.97 at the front of the store, Hunn had given Wal-Mart its customer stopper. In addition, Hunn secured an agreement that Wal-Mart would continue to buy grocery size pickles, relishes, and peppers with each order of the gallon jar. The gallon jar of Vlasic pickles was available in over 3,000 Wal-Mart stores in the United States. Wal-Mart was a centralized organization with promo-tional funds controlled at the Wal-Mart headquarters. By 1990 Wal-Mart was the number one retailer in the United States. Wal-Mart had become an international company with stores in Canada, Ar-gentina, Korea, China, and Germany. As team leader of Sales for such a large, important account, Pat Hunn was an important player at Vlasic, controlling 30% of its largest line, Vlasic pickles. Vlasic had financial troubles that went way beyond the sale of pickles. Wal-Mart was a great customersales with Wal-Mart now reached 33% of the Vlasic Foods business. On the revenue side, Vlasics business was up with a dramatic shift upward in Wal-Mart sales.

B.

Corporate Governance

Board of directors: Mike Duke President & CEO S. Robson Walton Chairman Lee Scott, Formerly CEO Ada lvarez, Director Jim Breyer, Director M. Michele Burns Director, Chairman and CEO of Mercer Human Resource Consulting James Cash, Director

II. External Environment A. General Environment Wal-Mart is the largest retail company in the world, larger than Carrefour, Metro AG, and Royal Ahold combined. The company controls approximately 20 percent of the retail grocery and consumables business in the United States, making it the largest grocery retailer in the country. Wal-Marts large size enables the company to purchase supplies at 3

low prices through bulk purchases, thereby providing lower prices to consumers but forcing many smaller retailers out of business. Wal-Mart has 8,500 stores in 15 countries, with 55 different names. The company operates under its own name in the United States, including the 50 states. It has wholly owned operations in Argentina, Brazil, and Canada. Wal-Mart's investments outside North America have had mixed results: its operations in the United Kingdom, South America and China are highly successful, while it was forced to pull out of Germany and South Korea when ventures there were unsuccessful. B. Industry Environment

Wal-Mart - Five Forces Analysis 1. Threats of New Entrants (Low) Barriers to entry into a local market are low for Wal*Mart as they are for its established competitors. In some area, barriers have been erected in the form of building permit restriction. This is politically motivated. WalMart has been outsmarted by some of its opponents who managed to rally consumers and politicians to their cause. 2. Threat of Substitutes (High) Although Wal*Mart is very powerful, it still represents only 8% of total retail sales in America. There are enough potential substitutes and competition is healthy.

3. Threat of New Competitors (High) 4

High industry growth Have excess capacity Cost structure of firms: sensitive to cost Buyers switching cost is low Firm can adjust prices quickly Price elasticity of demand

4. Bargaining Power of Suppliers (Medium) Wal*Mart is a powerful organization and bargains hard with its suppliers to obtain better prices. Industry is concentrated Many suppliers Wal-Mart is notorious for pressuring suppliers to cut their margins lower and lower, and often receives criticism for this practice. 5. Bargaining Power of Customers (Low) Consumers have almost no bargaining power over Wal*Mart. Low switching cost Transportation cost

C.

Summary of External/Internal Factors Paper

Internal and external factors can affect the four functions of management within any business. With the Wal-Mart Corporation; globalization, technology, innovation, diversity, and ethics are key factors that the corporation must consider if it plans to succeed and stay competitive with other industries in its area. If these areas are not considered, the Wal-Mart Corporation would discover that its company would not remain as strong as it has proven itself to be. Effect of Internal/External Factors Managers must deal with several factors that will impact the four functions of management, and both internal and external stimuli have a large influence on planning, organizing, control and leading. Internal stimuli can include factors of supplies to employees who a manager is in charge of. Planning for an event can be impacted by supplies, because someone needs to be in charge of ordering and planning necessary personnel to prepare for the event. Leading can also be in issue.

III. Internal Environment

A. Corporate Culture The company's business model is based on selling a wide variety of general merchandise at "always low prices." They refer to their employees as "associates".

B. Organizational Activities Analysis

Marketing Vlasic Foods International had been spun off from Campbells just months ago. The effect of the $500 million of debt that the spun-off company took with it was just becoming

known. While this deal was only one issue in a sea of financial challenges, Steve felt that he should weigh in on the Wal-Mart part of the business given its effects on non-Wal-Mart grocery accounts. He had pleaded with Hunn to dip into his equity with Wal-Mart and end this promotion. Young was sure that this promotion had cannibalized the non-Wal-Mart business. Finance In Walmarts Finance and Accounting departments, your insights go further, impacting business and communities in 27 countries, under 69 different banners, and in every corner of the business, including Enterprise Risk Management, Health and Wellness, Logistics, Operations and Sustainability. Our projects range from determining the financial impact of mergers and acquisitions to estimating the effect on business when a hurricane hits, and every decision is driven by our mission to save people money and help them live better. Our responsibility extends beyond retail our businesses make decisions in partnership with us. In this way, whether youre an Accountant, Business Analyst or Treasury Manager, youre helping to create a holistic environment that mitigates risk and capitalizes on opportunity. 7

Operations and Logistics Wal-Mart is the largest retail company in the world, larger than Carrefour, Metro AG, and Royal Ahold combined. The company controls approximately 20 percent of the retail grocery and consumables business in the United States, making it the largest grocery retailer in the country. It consists of three retail formats that have become commonplace in the United States: Discount Stores, Supercenters, and Walmart Markets. . The retail department stores sell a variety of mostly non-grocery products, though emphasis has now shifted towards supercenters, which include more grocery items. Human Resources Management (HRM)Wal-Mart faced several HR issues in the past years. HRM plays a key role in leveraging the knowledge of the organization specifically the enhancement of the abilities and skill of the employees. In particular, the function of the HRM in employing people with the right skills and competence influences the morale of the employees. Conducting a proper analysis of each employees abilities enables the human resource department to assign them to responsibilities or positions where they can perform their best. In turn, this contributes to employee motivation. Moreover, the HRM involves the provision of feedbacks through employee appraisal, which also motivates the employees overall performance. This enables the company to assess their employees individually based on various aspects such as daily work output, quality of work, work attitudes and overall performance. It also helps the company identify their employees strengths and weaknesses. Included in this aspect is the provision of various forms of recognition for hard working and deserving employees. The function of HRM is for the betterment of the organizations working force. It is very essential for the HRM officer to concentrate on 8

the feature wherein it needs special kind attention. Everything changes. In order for companies to go with the flow of current trends, they must be fully equipped with all the necessary factors affecting a satisfactory HRM system. As from the conception of an employee up to the end of his/her service to the organization, the HRM function will always be directed to the purposes of holistic human development to attain the ultimate goal competitive growth rooted on peoples trust, commitment, loyalty, adaptability, and high-quality knowledge and abilities.

C. Capabilities/ Core Competencies of the Firm The Core Competencies of the Walmart is they provide the coustomer good quality product with low price. They have a strong brand name with providing the coustomer good service. Walmart company have a good supply chain management system with Wide geographic coverage. They maintain a good relation ship with their dealer.

I.

Analysis of Strategic Factors

Wal-Mart SWOT analysis Strength Powerful Strategy Strong financial condition Strong brand name Economy of scale Cost advantages over rivels 9

Pricing advantages over rivals Inexpensive advertising Good supply chain management Good customer service Wide geographic coverage Strong dealer network

Weaknesses Overly complex strategy High turnover rate Weak reputation Behind rivals in e-commerce Doesnt survey customers Questionable management Anti-union

Opportunities Open market share Rising customer demand Serving new market segments Expending into new geographic areas

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Increase online sales Falling trade barriers in foreign markets Acquiring rival firms Entering into alliances Exploting new technologies

Threats Increased competition Slow market growth Entry of new competitors Loss of sales to substitutes Growing bargaining power of suppliers Growing bargaining power of customers Adverse demographic changes Restrictive trade policies New regulatory requirements

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V. Identification of Strategic Issues & Goals


Dominate the Retail Market wherever Wal-Mart has a presence. Growth by expansion in the US and Internationally. Create widespread name recognition and customer satisfaction with the Wal-Mart brand, and associate the retailer with the reputation of offering the best prices.

Branching out into new sectors of retailing such as pharmacies, automotive repair, and grocery sales.

I.

Issues and Recommendations

WE feel that Wal-Marts most challenging issue involves the publics resentment. WalMart has wiped out numerous retail establishments and will continue to do so unless stopped. So far, some big box opponents have stopped Wal-Mart from specific expansions but Wal-Mart is definitely fighting back. From Wal-Marts point of view, they should give more focus on global expansion. If specific areas are so against having a Wal-Mart that they pass laws to stop Wal-Mart from building in their area, we think Wal-Mart should stay away. For example, Wal-Mart would have a terrible time expanding into Oakland. we would assume that with the laws that were passed, a great deal of negative press also took place. The time and effort to get a Wal-Mart built in

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Oakland may not be worth the trouble. This is one of the reasons Wal-Mart should focus on international expansion. Although there are a number of dilemmas in which Wal-Mart must take action, I feel that they are doing extremely well overall. They are the largest corporation in many countries as well as the world overall. They may need to improve their image and work out their legal battles but I dont think they should feel generally threatened. As Sam Walton said, Recognize that the road to success includes failing, which is part of the learning process rather than a personal or corporate defect or failing. Always challenge the obvious.

VII.

Evaluation and Control

Wal-Mart is the largest retail company in the world, larger than Carrefour, Metro AG, and Royal Ahold combined. The company controls approximately 20 percent of the retail grocery and consumables business in the United States, making it the largest grocery retailer in the country. Wal-Marts large size enables the company to purchase supplies at low prices through bulk purchases, thereby providing lower prices to consumers but forcing many smaller retailers out of business.

References: 1. Wheelen Strategic Management and Business Policy 13th Edition . 2. http://wal-marts-human-resource-management-hrm-issues-and-strategies.html 3. http://walmartstores.com/sites/annualreport/2010/operational_highlights.aspx 4. http://www.wikinvest.com/stock/Wal-Mart_(WMT)Walmart

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