STUDENT NAME : JUBAIR KABIR

MODULE NAME : Business Strategy

UNIT : 7
DATE OF SUBMISSON : 27.02.14

Business Strategy

Business Strategy Individual assignment
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Contents
Figures 2
Task 01 .................................................................................................................................................... 3
1.1 Introduction .................................................................................................................................. 3
2.0 Task 1 ................................................................................................................................................ 4
2.1Wal-Mart Corporation ................................................................................................................... 4
2.2 The Vision and Mission ................................................................................................................. 4
2.2.1 Mission ................................................................................................................................... 4
2.2.2 Vision ...................................................................................................................................... 5
2.2.3 Objectives ............................................................................................................................... 5
2.2.4 Goals....................................................................................................................................... 5
2.2.5 Core competencies of the business ....................................................................................... 6
2.3 Planning strategic directions for Wal-Mart ................................................................................... 7
Current competitive strategic conditions of Wal-Mart .................................................................. 7
2.4 Limitations in planning strategic directions for Wal-Mart ............................................................ 7
2.5 SWOT Analysis ............................................................................................................................... 8
2.6 PEST Analysis ................................................................................................................................. 8
2.7 Significance of the stakeholders ................................................................................................... 9
2.7.1 Internal Stakeholders ........................................................................................................... 10
2.7.2 External Stakeholders .......................................................................................................... 10
3.0 Task 2 .............................................................................................................................................. 11
3.1Strategic Plan ............................................................................................................................... 11
3.1.1 Strategies of Wal-Mart ......................................................................................................... 11
3.2 Appropriate future strategy ........................................................................................................ 12
3.3 Roles and Responsibilities ..................................................................................................... 14
3.4 Resource requirement evaluation .............................................................................................. 15
3.4.1 Cost Evaluation .................................................................................................................... 15
3.4.2 Value Chain .......................................................................................................................... 16
3.5 Targets of the strategy ................................................................................................................ 18
3.6 Timescales of the strategy .......................................................................................................... 18
4.0 Conclusion ....................................................................................................................................... 19
5.0 Reference ........................................................................................................................................ 20

Business Strategy Individual assignment
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Figures

Figure 1 - Core competencies ................................................................................................................. 6
Figure 2- supply chain ............................................................................................................................. 8
Figure 3 - value chain ............................................................................................................................ 17
Figure 4 - walmart value chain .............................................................................................................. 17
Figure 5 - value creating activities ........................................................................................................ 18


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Task 01
1.1 Introduction

Walmart serves members and customers more than 200 million times per week. They serve
the customers in a way that they want to be served in retail outlets, online and on mobile
devices.
Walmart operates under 69 different banners in 27 countries. With fiscal year 2012 sales of
approximately $444 billion, Walmart employs 2.2 million associates worldwide.
Strategic management looks in to the decisions made by the hierarchy on behalf of the
shareholders optimizing the use of resources and enhancing performance within the external
environment.
At Wal-Mart satisfying customer is the key. Wal-Mart provides it all, low prices, broad
assorted, quality goods and services, customer delight, staff are curtious and knowledgeable,
convenience, long hours and a pleasant shopping experience





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2.0 Task 1

2.1Wal-Mart Corporation
Wal-Mart was founded by Sam Walton in 1960.The first discount store in Rogers Ark dwest
1945 1961. There after a chain of Ben Franklin franchised. Approximately 15 stores across
rural Arkansas 1960. Sam Walton opened his first discount store in 1962,the first Wal-Mart
in 1970, and the first distribution center in 1980.
There are over 330 Wal-Mart stores in USA alone. Although Wal-Marts main target was
rural markets (45% stores), due to severe competition it moved in urban areas such as Kmart,
T.J Maxx, Wholefoods. Over the years Wal- Mart has faced many competitors.
In 2008 Wal-Mart has 4,227 total units in the US Wal-Mart discount stores (914)
Supercenters (2,576) Sam & aposs Clubs (594) Neighborhood Markets (143) 3,210 total
units in international market Argentina (24) Brazil (320) Canada (309) China (Wal-Mart 108
; Trust-Mart 100) Costa Rica (156) Guatemala (149) Honduras (48) Japan (392) Mexico
(1,081) Nicaragua (47) Puerto Rico (55) El Salvador (74) United Kingdom (347).
Today Wal-Mart earns annual revenue of over $100billion and has more than
75,000employees worldwide.

2.2 The Vision and Mission
2.2.1 Mission

WalMart's mission statement and its ad slogan are nearly identical. The mission statement is
To provide a greater customer service and at the lowest possible price...always
Or as the ad slogan goes, "Save money. Live better."

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2.2.2 Vision

The secret is in delighting the customer. As a customer one is deemed to look for:
A wide range of quality good and service at the lowest possible price
Staff that are friendly, knowledgeable and provide a good service
Convenience of long hours, free parking.

2.2.3 Objectives

Wal-Mart has lots of objectives.
To increase sales.
To satisfy customer at low prices.
To advance in data management.
To motivate employees to grow.

2.2.4 Goals
Grow overseas.
Develop online sales rapidly.
Expand market shares.
Built loyal consumer base.
Leverage all the benefits of discounted cash flow.
Help the FMCG in brand building.
To organize the best supply chain management.
Get maximum supply credit and discount from FMCG
Branching out in to new sections as pharmacies, automotive repair and grocery sales.





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2.2.5 Core competencies of the business

Wal-Mart has developed their core competencies, enhancing their scope into new territories
while keeping the traditional method of low prices backed by excellent customer service,
while pursuing their vision (Ireland, Hoskisson, Hitt, 2008)
Core competency creates competitive advantages. Wal-Mart has created five distinct
competitive advantages. They are listed below. Under fit and scope, researcher enlists the
basic strategy followed by Wal-Mart mainly low cost, high volume, and customer
satisfaction. At Wal-Mart competitive advantages fits and also supports the strategy.A
volume base strategy matches the economies of scale.Wal-Mart relies heavily on
partnerships. It maintain low inventory.


Figure 1 - Core competencies




Core
competencies
IT Based
Management
Efficient in
store
operations
Self owned
Distribution
Low
economies
of scale
Customer
oriented
Culture
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2.3 Planning strategic directions for Wal-Mart
Current competitive strategic conditions of Wal-Mart
The current strategy used by Wal-Mart is unique. There are three main areas looked at:
Internationalization through creation of partnerships,reaching to areas where retail marketing
is not wide spread, and expanding the product range to offering a comprehensive package of
goods and services, looking deeper into areas of travel, insurance and banking services.
Internationalization is essential for Wal-Marts traditional marketing to capture market share
different countries. This is why Wal-Mart has been pursuing this area of marketing
aggressively. Depending on the country and place of choice, partnerships are developed in
order understand the marketing strategies used in that specific area, the product mix, design
brand, customer service and even pre and after sales service. This adaptation has enabled
product design adaptation which enhances product quality and service creating a positive
correlation with firm performance.
Business performance is tied up with performance. In order to enhance market share the firm
must strive at corporate excellence. This way it can achieve greater improvement in
operations. For managers of the firm to be sensitive to achieving excellence it is curial for a
firm to be IT based and continuously improving and training staff accordingly, innovate and
inspired to reach further in to new markets. (H. Lee Scott, 2002, www.walmart.com)
As a step forward Wal-Mart focused on improving marketing strategy and marketing mix,
moving away from the traditional low cost/ high volume strategy. The strategies that are
currently used will be developed further through excellent customer service enhancing
customer satisfaction, motivating staff and using advanced data management system for data
mining and monitoring profitability.
2.4 Limitations in planning strategic directions for Wal-Mart
Continuous training need.
Differentmarketing strategy and marketing mix for different retailers in different
countries to be used. This will require comprehensive market research.
Adaption of Cooperate Cultures in line with the culture of the country.
To established Wal-Mart support services and value additions in the county or place
of establishment.
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2.5 SWOT Analysis













Figure 2- supply chain
2.6 PEST Analysis
Increasing online sales and
network stores
Greater demand for low cost
goods and services
Improved customer perception
Promote green world, air trade
and human labor laws
Expand to far fetched areas
Developing economy
Strong competition
Cheaper logistics
Political influence
Effects of the subprime
crisis
Current economy and taxes

Legal issues
Recession
Reduced flexibility
The company is
global, but has a less
presence in Worldwide
Product recall
Exit from certain
markets
Advertising expenses
are lower given the
EDLP strategy
Inbound logistics
IT cost is high
Strong market position in United
States and other countries
Benefits for full time employees
Customer oriented culture
IT based data mining system
Tight partnerships
Good reputation
Customer loyalty
Strong marketing capabilities
Balanced brand mix
Ability to span large net work and
large customer base
strengths Weakness
Oppotunities Threats
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2.7 Significance of the stakeholders
There are two types
Internal stakeholders
External stakeholders



Political

Large retails encouraged for they create a job market
Provide goods and services for a discount rate especially during recession
Leading retailing industry with a revenue of $244.52 billion
To curtail price wars leading to inflation
Curtail encumbrances due quick exit and entrance of retails
Large capital requirement as the FSA
Largest law suite

Economical

Lack of money circulating thus inability for consumers to by luxury
goods.
Large economic benefits to staff.
Welfare support systems funded by Wal-Mart supercentres.
Cost reduction in distribution
Managing a large work force is expensive

Socio-cultural

Look for low income customers.
Establishing centres in small towns


Technological

Establishment of private satellite network.
Managing own logistic through a central hub and spoke centre of warehouse


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2.7.1 Internal Stakeholders

Employees Employees are considered as internal customers, they are key to any firm. The
success of the business and the intended consequence of the business lie in the hands of the
employees. Employees expect the firm to open, fair and provide them with job security.
They will also require financial compensation to retain them.
Shareholders Understanding the need of the consumer is central for a firm to flourish.
Only if there is a continuous stream of purchases will there be increased sales which will
push market shares high. This will encourage shareholders to invest more. The Wal-Mart
investors ensure that the firm expends business and grows in size and to continue the
operations. The shareholders expect a higher rate of return and a large portion of dividend to
be paid.

2.7.2 External Stakeholders

Government The government is the most influential and largest non- funding stake holder.
The government has the sole authority to allow operation or even instruct a close down of the
retail malls. The rules and regulations of Central Government in regards to Shop and Office
have to be adhered.
The norms and standards have to be satisfied as per requirements of the government.Also,
politicians expect Wal-Mart to fund their campaigns. Wal-Mart's political action committee
has contributed over $752,500 towards this end, last year.

Pressure groups They ensure that the firm is engaged in ethicaloperations in line with
environmental protection and low pollution levels.




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3.0 Task 2
3.1Strategic Plan
Wal- Mart is beginning to feel the shakes of the recession, thus a new strategic plan needs to
be reverberated island wide in order for the firm to move forwards in its endeavours. This
will enable new methods of marketing and merchandising tying up with new brands and new
partners.
This strategy will create an economically diverse customer base. It will also enable
investments to grow with sales still sticking to the traditional high volume low cost approach.
3.1.1 Strategies of Wal-Mart

The strategies adapted are
1. Develop a strong, global, customer oriented culture through advance data
management.
2. Keeping to the low prices, also look to add value.
3. Keep emphasis on customer.
4. Look at dealing with suppliers of the firm in a different light.
5. Strengthen partnerships.
6. Focus on fast, clean friendly.



Project Impact is bringing a new look to Wal-Mart Supercenters, including the addition of new logos
and signs designed to aid navigation and simplify the shopping experience.



As part of Project Impact, Wal-Mart has begun highlighting local products in its stores. This may help the retailer gain a
better reputation for food, but brings added complexity, sources said.

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3.2 Appropriate future strategy
As the Strategic Consultant planning, implementing and follow up is entirely up to me. This
five year strategic plan is carried out in stages complementing the six strategies namely
developing a strong, global, customer oriented culture through advance data management,
keeping to the low prices, also look to add value, keeping emphasis on customer, look at
dealing with suppliers of the firm in a different light, strengthen partnerships, and focusing
on fast, clean friendly.
In order to reap the full results of such an Endeavour the resources will have to be enhanced.
The number of staff will have to be increased. They will have to be given a comprehensive
training in the areas of customer service and IT based data management.
In order to achieve these end results steps that need to be carried out are indicated below:-
First step -In order to go global Wal-Mart is planning on aggressively moving into urban
markets, even if the space is small. Wal-Mart has been looking for small locations. These are
typical drug store sizes. Each will be manned with approximately 5 staff members spanning
from clerical to supervisory.
The second step looks at improving the market strategy and mix, designing a methodology
to attract new customers. These shrinking super markets will carry an assortment of goods
and services. The modified stores will focus on fast, clean and friendly. They will solidify
the customer loyalty by giving the customer a good service.
This will create an increase the frequency of purchase but also help market the low price
more value concept instead of stressing on the low cost high volume approach. The high
unemployment and low income will keep squeezing to purchase lesser and lesser. This will
be used to the advantage of Wal-Mart.
The third step delivery system by suppliers has to be looked at in a different light. The
customers must be ensured that the supplies that they purchase are safe for consumption. It is
only then that the customers will trust the service at Wal-Mart. It is important that Wal-Mart
build confidence within the customer ensuring a repurchase.


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The fourth step is aimed at strengthening partnership. This is a manner in which the
functional capabilities, resources and expertise can be explored. This strategy helps to widen
the scope of the Wal-Mart stores, worldwide. Increased sales will increase profitability. The
hunger to grow has caused Wal-Mart even to expand to areas of Europe. Briskly they are
moving to China and other Asian countries as well.The SWOT analysis of Wal-Mart gives an
overview of the reputation, range of brands, value, and commitment.The global industry
leaders need to be aware of the vulnerabilities socioeconomic and political problems it may
have to face in the expansion.
The main steps adopted are to cut price and increase volumes, minimize competitors, to
attract new customers by building their confidence ensuring a repurchase and also motivating
new and the regular customers to come through the doors of Wal-Mart stores.
Through the Porters five force model it is clear that the attention has been given to strategic
planning, implementation, removal of barrier entry and competitors and reducing diversity
among pricing norms. At Wal-Mart goods are sold under legal brand making a phenomenon
change in the retail industry. Wal-Mart profits from the low mark up on profit, with this
strategy Wal-Mart has acquired and partnered many other retail firms and hopes to keep
expanding.
The extra revenue earned has been distributed among the sales force in the form of bonus and
incentive pay. This will not only motivate the staff to keep performing and giving a good
service but also go out of their way to market Wal-Mart stores. It is not only the customer but
suppliers of the supply chain will also benefit. Enabling a better customer service, the staff
will endure a thorough training in the areas of customer service. They will be thought the best
practices of the industry. High performers will be recognized and rewarded. In this manner
Wal-Mart and they will be able to reach their aim successfully and easily.







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3.3 Roles and Responsibilities
The corporate leadership should be provided by Director Board and consultants such as me. It
is the responsibility of the above said to articulate the transcending goals by providing a
vision. They have to portrait the firm as it is to become. In the process good publicity must
be given to future plans. A advertising campaign may have to be launched. High
performance standards for each of the functional divisions namely operational, financial,
human and marketing should be laid down. The Director Board must have faith in their
subordinates that the staff will, carry Wal-Mart forward.
They middle management must help the subordinates build confidence by providing them
with goals though long term planning, coaching and mentoring them. They have to set
examples and must communicate and give feedback on performance. The staff will market
and promote as instructed. The sole discretion to change discount prices is vested with the
top management. But where the foreign retails offer discount the decision on how much it
will be is decided by the store head. For the purpose of calculating such a discount a
technical knowledge is provided to staff. All other rules, regulations, and policies have to be
adhered in line with Wal-Mart, USA.
THE MASTER STRATEGIST
CEO personally shapes the plan
Depends on skills and vision of one person
DELEGATE IT TO OTHERS
Uses a planning staff or task forces
Lack of top-down direction and leadership
COLLABORATIVE APPROACH
Involve key people --- seek group consensus
Can political games and compromises be avoided?
THE CHAMPION APPROACH
Encourage subordinate managers to develop their own strategies
Will a coherent, unified strategy emerge?
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3.4 Resource requirement evaluation
This looks into the resources required to implement the new strategy namely cost analysis.
3.4.1 Cost Evaluation
This is a tool used to choose a range of alternatives using financial resources. It assesses the
gains and losses of carting out the relevant activities. It gives an overview on how to get the
maximum from limited, budgeted resources. These resources are budgeted for the next five
years. Given below are an estimate of the funding requirements and the estimates per unit.

There are three broad cost groups
the direct costs of service provision
the costs to the individuals or their families
the costs (or averted costs) falling on other agencies as the result of the treatment episode

The direct costs of services can be further broken down into:
capital costs - building, equipment furniture and fittings
building related expenditure - heating, lighting, property taxes, maintenance staff costs
other service related expenditure - stationary, telephone, travel costs, etc.
overhead costs - management and administrative expenses often shared across interventions
or services

Cost evaluation with in the unit
Outline of the purpose of the study
describe the service organisation and the interventions under review
Identify the resources needed to deliver the interventions
collate the existing data sources
develop an analysis plan
conduct new data collection
conduct full analysis




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Capital costs in USD
building (building value/60 years then divided by 4 because
prevention programme occupies only 25% of building) 15,000
equipment (equipment value/10 years) 5,000
furniture (furniture value/10 years) 2,000
vehicles (vehicle value/10 years) 1,000
Building related expenditure
heating 500
lighting 200
property taxes 1,000
maintenance 300
Staff costs
total prevention staff
salaries plus benefits 120,000
Other service related expenditure
stationary 400
telephone 1,200
vehicle operating costs 670
travel costs 2,000
Overhead costs
management and
administrative expenses 80,000
Total 1996 costs 229,270

3.4.2 Value Chain

A value chain is also known as supply chain. It gives the sequence of activities involving the
production and delivery of the product and service. This is depicted in a sequence of tasks.
Each area creates value. The value chain of Wal-Mart is shown below. There are two parts to
it, the primary and the secondary. Both areas are required for the organization to effectively
run its business.
The primary activities support the main process of the organization whereas the secondary
supports the supportive activities of the primary activities in the value chain. Value chain
enables grater agility, productivity, more profit, shorter lead time, loyal customer base and
limited inventories.


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Figure 3 - value chain


Figure 4 - walmart value chain




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Figure 5 - value creating activities
3.5 Targets of the strategy
The strategy has been looked from a global perspective. The targets are individually broken
down to different functional groups. Their low price more value concept will set ablaze the
marketing of Wal-Mart. The word of mouth is one of the most powerful marketing tools that
can be used to market any retail store.
This will draw more customers towards Wal-Mart. The strategy is drawn out over a period of
5 years. Each stage will be evaluated. If the target has not been reached then the process will
be revaluated and errors rectified, amendments made before moving to the next phase.

3.6 Timescales of the strategy
The original target is cascaded to functional units and from there on to departments. The time
line should be broken down into 6 month processes and evaluated at the end of every six
months. In this manner the, with close supervision the targets can be met.


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4.0 Conclusion
The Wal-Mart focuses on neighborhood marketing with a variety of good and service. Goods
sell at a low price at high volumes with value additions. The main aim and purpose of this
assignment was to derive new strategies of Wal-Mart. It is justified by giving Porters five
forces, the external and internal analysis, SWOT and PEST analysis.
This five year strategic plan is carried out in stages complementing the six strategies namely
developing a strong, global, customer oriented culture through advance data management,
keeping to the low prices, also look to add value, keeping emphasis on customer, look at
dealing with suppliers of the firm in a different light, strengthen partnerships, and focusing
on fast, clean friendly. This is done in order attract customers to the low prices offered.
It has strived to modify the existing strategy which works well for Wal-Mart. This will enable
the capture of foreign markets more effectively. It is important that Wal-Mart holds on to its
market share as it climbs the ladder of profitability. The publicity and promotions must be
well planned out. And from the moment of strategic planning and implementation the
hierarchy must support the staff and middle management to achieve what is required of them.
The strategic positioning and the end results must always be evaluated. Feedback must be
shared with higher management. In this manner the strategy can be adapted in the said span.












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5.0 Reference
Broughton,R,quality assurance solutions,http://www.quality-assurance-
solutions.com/swot-analysis-of-wal-mart.html (last accessed Jan 05 2013)

McIntyre,D,(2010),Wal-Marts big goals are a huge
challengehttp://www.dailyfinance.com/2010/06/05/wal-mart-big-goals-huge-
challenge/[06/05/2010](last accessed Jan 05 2013)


Walton, S,(1918-1992), An introduction to walmart.com
http://www.walmart.com/cp/An-Introduction-to-Walmart.com/542413
(last accessed Jan 06 2013)

Bernstein, Aaron "Labor Finally Puts A Target on Wal-Mart" Business Week, Dec.
6, 2000.
Canadian Business and Current Affairs "A giant, yes. Gentle, no: Wal-Mart
stumbles into a cultural chasm" January, 1996 V.69: 23,24.
El Boghdady, Dina. "The High Price of Cheap Gas." The Washington Post. Feb.
1, 2002: E01.
Finney, Daniel P. "May The Force Be With You, Star Wars Fans", Omaha World-
Herald, April 24, 2002.
Gimein, Mark " Sam Walton Made us a Promise" Fortune Magazine,Monday,
March 18, 2002.
Hoffman, Hank "Wal-Mart Blues" www.metroactive.com/papers/
Quinn, Bill How Wal-Mart is Destroying America and the World, Berkeley CA: Ten
Speed Press, 2000.
Reid, Keith. "The Wal-Mart Approach" National Petroleum News. May 2001: 20.
"Rejected by the Unites States Senate: Wal-Mart tried a ploy to stop unions from
informing its workers." www.unionnetwork.org November 4, 2001. Reuters,
Seiyu Shares Surge on Wal-Mart Alliance. March 14, 2002.
Thau, Barbara. "Wal-Mart Takes on the World." HFN, September 3, 2001: 8.
Troy, Mike. "The World's Largest Retailer." Chain Store Age Executive, June
2001: 47.