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Columbia College
Jessica Kauten, Siveicea Love-Guarganious, William Montague, Scott Randall, Marchelle Robinson, and Judith Rosado
Strategic Management 479
Alexander Furla
WAL-MART STORESSTRATEGIC AUDIT TEAM PRESENTATION
Current SituationCurrent Performance
Divided in 3 Business Segments: Wal-Mart Stores, Sam's Club, and the International Division.
Largest Company with $245 billion in sales.
$11.2 billion net income, up 9.4% to $2.68 per share.
Stock price of $46.11.Over 6,100 stores
worldwide.
Board of Directors13 members, 4
affiliated, 9 independent, 3 women, 2 African Americans, 2 Hispanic Americans.
S. Robson Walton, Chairman of the Board.
Strategic Management
Natural EnvironmentRaw materials availability.
(O)Land availability. (O)Electricity usage. (T)Oil and Gas usage. (T)Water scarcity.(T)Hazardous waste storage,
transportation and disposal. (T)
External EnvironmentSWOT Analysis
External EnvironmentSocietal Economy Economic Interest rate increases (T). Economic deterioration (T) Increasing commodity costs. (T) Increasing transportation costs. (T) Currency fluctuations. (T) Slow national economy. (T)
TechnologyUsage of RFID (O)Internet presence (O)IT increasingly important. (O)
External Environment
Political-Legal Regional trade pacts making free trade
available (O)Differing laws may evoke compliance issues.
(T)Potential unionization of workforce. (T)Many legal proceedings. (T)Defendant in numerous cases containing
class action allegations (T)
External Environment Socio-cultural Aging U.S. demographics. (O) Slowing U.S. population growth. (T) Wal-Mart seen as a reason for closing of mom and pop stores. (T) International cultural differences. (T) Green environmental movement. (O)
Task Environment United States market saturation. (T) Expansion into Europe, China, South America, Canada, and
Mexico. (O) Rivalry High. Target, Sears, K-Mart (T) Chance of new entrants low. (O) Purchasing power high. (O) Substitute power high. (T) Government regulations power medium. (T)
Internal EnvironmentCorporate Culture In-depth employee involvement in company affairs. (S) Trained employees to be merchants. (S) Reflection of the founder’s values. (S) Conservative values create some problems through expansion.
(W) Non-Union stance is viewed unfavorably is some areas. (W)
Corporate Resources Marketing Advertising costs are expensed as incurred. (S) Advertising costs consist primarily of print and television
advertisements. (S) Offers quality brand names at lower-than-competitive prices. (S) Introduced a “Value Plan” benefits plan to its employees. (S) Green marketing products better for environment. (S)
Finance$312.6 billion in annual sales.
(S)$11.2 billion net income. (S)$2.68 earnings per share. (S)8.9% return on assets. (S)11.4% increase in sales and
operating income for the international business. (S)
Internal Environment
R&D More involved with the development side. (W) Focused on expansion and development. (W)
Operations Wal-Mart USA - intent on driving comparative store
(S) Sam’s Club - remain committed to serving the needs
of our members (S) Wal-Mart International - approach to ensuring
continued profitable growth. (S)
Internal Environment
Internal Environment
Human Resources Employees are called
associates. (S) Employee stock ownership
and profit-sharing program. (S)
Decentralized approach to retail management development. (S)
Utilizes the Total Quality Management approach. (S)
Discourages unionization. (W)
Information Systems
Leader in RFID technology. (S)
Good internet presence. (S)
Utilizes satellite communications, data centers, and handheld devices. (S)
Analysis of Strategic FactorsSituational
Analysis Strengths International brand
name. Financial position.
Market leadership.
Weaknesses Market saturation. Public opinion. Adjustment to cultural
differences after entering a foreign market.
Supplier alienation. Past employee
discrimination. Employee health benefits. International supplier
employee violations.
Analysis of Strategic Factors
Opportunities International
expansion.Environmental
leadership.Worker’s rights
leadership.Community
involvement.Social initiatives.
ThreatsStrong U.S.
competition.Changing
demographics.Economic uncertainty.Current litigation.Employee
unionization.
Strategic Alternatives and Recommended Strategy
Adopt a friendlier corporate attitude and image Pro. Improved
customer service Pro. Business growth Pro. Stronger
relationships Con. Negative image Con. Wrong impression
from local owned retailers (Parnell, 2008).
Ease into foreign and domestic markets instead of barging in Pro. Positive corporate
image by not devouring every business in sight.
Pro. Creates an image with integrity
Pro. Customer loyalty Pro. Increase friendlier
competition Con. Creates ill-will among
smaller businesses Con. Viewed as a bully
corporation
Strategic Alternatives and Recommended Strategy
ExpansionPro. New source of tax revenue for the
communityPro. Creates more jobsPro. Promotes community expansionPro. Opportunities for employee growthCon. Associates receive unjust wages due lower
cost productsCon. Purchasing practices require manufacture
of goods in third world countriesCon. Reduces the value on competing businesses
ImplementationTo implementing and
developing ways to appease who oppose to new constructions.
To implement and get involved with developing a way to ensure employees are getting the right benefits to mirror retail industry’s average worker.
To implementing and establish committees that can perform thorough research.
Evaluation and ControlDevelop “scout”
teams for measure
opportunities
Implement customer
satisfaction surveys
Measure performance
Surveys would greatly help establish to determine products
Yes
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