MBA122 Strategic Management

Section A
Answer both questions
The Wal-Mart Business Model
Wal-Mart is the leader in retailing industry with fiscal revenue of $454.52 billion in 2008
making it the worlds largest corporation. Wal-Mart as of 2008 had 1,283,000 employees
growing at 11.2%. The above data explains that strategy of Wal-Mart is extraordinary which
manages and operates over 4150 retail facilities globally. Wal-Mart dominates the American
retailing industry due to number of factors like its business model which is still a mystery and
its effectiveness in not letting the rivals let know about the weaknesses.
The key components of Wal-Mart (The Value Chain), which offers cheap prices than its
competitors includes firm infrastructure like frugal culture, no regional offices and pleasant
environment to work. It is learnt that Wal-Mart strives on three generic strategies consisting
of Focus Strategy, the Differentiation Strategy and overall cost leadership. Managers strive
hard to make their organizations unique, distinctive and identify key success factors that will
drive the customers to buy their products.
Wal-Mart made strategic attempts in the its formulation to dominate the retail market where it
has its presence, growth by expansion in the US and Internationally, create widespread name
recognition and customer satisfaction in relation to brand name Wal-Mart and branching into
new sectors of retailing. Wal-Mart terms its employees as associates. Manager compensation
is linked to the profit of store operated by him, within promotions, compensation offered to
associates depending on companys profits and also offered some incentives on their
performances. The workforce at Wal-Mart is not unionized as the company takes all the
measures of their benefits and provides them training on related issues.
Technology plays a vital role in development of the organization and Wal-Mart is well
equipped with technological innovations like POS, store performance tracking, real time
market research, satellite system and UPC. Wal-Mart procurement measures like hard-nosed
negotiations, partnerships with some vendors, centralized buying, planning packets, etc. This
helps the cause of providing the goods and services at low prices.
The other factors that increase the margin of profit for Wal-Mart are inbound logistics with
frequent replenishment, automated DCs cross docking, pick to flight, EDI, hub and spoke
system. Wal-Mart strategy of operation is innovative with big stores in small towns with
monopoly in the market at low rental costs, local prices, concentric expansion, merchandising
in brand name, private labels, little space for inventory, store within store, etc.
In relation to marketing and sales, merchandising is tailored from locals, spent less on
advertising and the prices are fixed low and it depends on the store manager to fix the latitude
of pricing. All the above factors combined together form the key components of Wal-Mart
which not only increase the margin of profits through bulk sales but also boost the confidence
of the customers with services like point of sale information system and everyday low prices.

Q.1.
a) How many dollars in revenue did each Wal-Mart employee generate in 2008? (4 marks)
b) Examine the effectiveness of the approaches that Wal-Mart has used to secure a cost
advantage over competitors. (9 marks)
c) Explain how Wal-Mart has been able to keep its employees from being unionised.
(6 marks)
d) Assess the benefit in c) above to Wal-Mart. (6 marks)
Total 25 marks
Q.2.
a) Examine the sources of Wal-Marts competitive advantage. (6 marks)
b) How has Wal-Mart been able to increase her profit margins more than its rivals?
(6 marks)
c) Evaluate the benefits that technological incorporation has brought to the consumer.
(7 marks)
d) Examine whether Wal-Marts position in the industry is sustainable. (6 marks)
Total 25 marks

Section B
Answer two questions
Q.3.
a) What does a companys strategy consist of? (5 marks)
b) Examine the relevance of the strategic management process to a manufacturing company
of your choice. (10 marks)
c) For a sugar processing factory in Uganda, examine the approaches it can use to secure a
sustainable cost advantage. (10 marks)
Total 25 marks
Q.4.
a) Explain the conditions under which the bargaining power of buyers may increase over
that of the seller. (7 marks)
b) Why is it important for a company to undertake a competitive strength assessment?
(8 marks)
c) Examine the relevance of the BCG growth share Matrix to a company like Mukwano
group of industries in Uganda. (10 marks)
Total 25 marks
Q.5.
a) Examine the factors shaping the choice of Corporate Strategy. (6 marks)
b) How and why should a company match structure with strategy? (6 marks)
c) How has internet technology impacted company and industry value chains in Uganda?
(6 marks)
d) For an industry of your choice, examine how the Internet reshaped the competitive
environment. (7 marks)
Total 25 marks
Q.6.
a) Critically evaluate the effectiveness of the key indicators used to judge the success or
failure of a companys business strategy. (8 marks)
b) Evaluate the type of competitive advantage that is being pursued by Warid Telecom in
Uganda. (8 marks)
c) Are Warids strategies ethical? (9 marks)
Total 25 marks