Analysis of Strategic and Structural Change of a Company

1. ANALYSIS OF STRATEGIC AND
STRUCTURAL CHANGES FOR A
COMPANY-WALMART
NIDHI ARORA

2. 1
Table of Content:
• Introduction
• Background history of the company
• Problem Recognition/Identification
a) Problem symptoms to the company ? (Or what the company has been
suffering from?)
b) Method the company use to identify the origins of the problem ?
• Strategy Formulation
a) Strategic action plan to make the change happen ?
b) Areas of the company were changed regarding the developed action plan?
• Results of implementing the change plan
• Discuss & Conclusion
• References

3. 2
Introduction:
The objective of this essay is to discuss about some of the business problems experienced by
retail e-commerce organization “Walmart Inc.”. Highlight the background and history of the
company by discussing the stages of its development over the years. It will further discuss
some of the major problems company has been suffering from in last one year and what
methods company has adopted to identify the cause of the problems. Walmart has
implemented some strategic formulation to address these problems and how this has impacted
the company with regards to the organization structure, decision making, infrastructure or in
any other dimensions. Finally, discussing on the results of implementing these change plans.
Background and history of the company:
Walmart Inc. founded in 1962 driven by understanding of bringing affordable products to
people in small towns. Walmart top priority has been to help people, save money and live
better. In 1982, Walmart started to support community services. Walmart and Walmart
foundation together contribute 1 billion in cash and in-kind annual giving. Walmart has a
model based on philanthropy which is its unique strength in providing greater societal impact.
Walmart keeps diversity, equity and inclusion at the core of its philanthropy. It strives to keep
equitability and opportunities for all. Walmart culture of value of service to customer, respect
for individual, strive for excellence and act with integrity. Walmart organizational structure
constitute CEO, board of directors and foundation officers and the team supports both
Walmart corporate giving and grant making through Walmart foundation.
Walmart is world’s largest grocer providing convenient access to food and other products to
people around the world. It’s philanthropic approach to investment, which focus on areas of
its strength and collaborate to bring system wide change, advance long-term environmental
sustainability and create economic opportunity (Andrew Spicer1 and David Hyatt2, 2017).
Walmart is working to strengthen the demand for responsible labor practices, enhance
community voices, invest in programs that advance small holder farmer and entrepreneur

4. 3
livelihood. It provides opportunities for women in its supply chain operations. Walmart
focuses on labor dignity and follows responsible labor practices. It invests in initiatives that
provide market access and economic opportunity to farmers, entrepreneurs and women.
As part of its local communities around 2.2 million people live and work in local
communities. It provides strong support to stable jobs, healthier food in times of need and
crisis which contributes to a strong economy. It also has a strong charitable relief system
providing support to more than 10000 communities our store, club and facilities serve.
A large part of Walmart income goes into creating opportunity, advancing sustainability,
strengthening community and advancing racial equity.
Problem Identification
As part of its sustainability goal, Walmart environmental and social challenge has been
creating sustainable and responsible supply chain. Sustainable and responsible supply
chain environmental challenge includes following factors:
• Understanding complexity of commodity supply chain.
• Innovation in production technologies for manufacture, agriculture and other
products.
• Adopting traceability tools for supply chain practices like vessel monitoring and
blockchain.
• Pricing and availability of certified products.
• Willingness of supplier to adopt sustainable practices.
• Financial trade-offs related to cost, capital and revenue.
• Materials innovation.
Social challenges related to responsible supply chain includes addressing following issues:
• Addressing complexity in supply chain.
• Diversify all responsible stakeholders with expectations conflicting with the
challenge.
• Greater call for transparency.
• Emerging trends in political landscape at global level.

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• Upstream risk beyond the reach of traditional responsible sourcing tools.
Climate change affects global economies and supply chain around the world causing low
crop yields, increase in healthcare spending and damage caused by storms. 60% of green
house emissions are generated by production of consumer goods.
Walmart supply chain includes more than 100,000 suppliers and retail operations in more
than 27 countries across the globe. Walmart has identified potential risk to dignity of workers
in minimum of 10 retail supply chains by 2025.
Although, compliance responsibility of supply chain rests with the supplier but Walmart
supports suppliers to drive a responsible supply chain for communities they serve by
leveraging its size and influence.
Walmart ESG Report, 2019
Walmart has adopted a long-term strategy in addressing its Environmental, social goals to
achieve sustainable development goals. Walmart has been reporting on ESG topics since
2005.

6. 5
Methods:
Walmart continuously assess its global supply chain using internal and external data, risk
assessments of regions, countries and products.
Another method used by Walmart is through continuous collaboration of stakeholders
including civil societies, industries, governments and it aims to address the risk to dignity of
workers in a minimum 10 retail supply chains by 2025. Based on its analysis, Walmart
identified following five supply chain with greatest impact:
1. Produce in the U.S and Mexico
2. Shrimp in Thailand
3. Tuna processed in Thailand
4. Apparel in Bangladesh
5. Electronic sourced for the U.S retail market supply chain.
Walmart has set a science-based target that covers its GHG emission footprint. It also works
with its suppliers to reduce emissions by 18% by 2025 from 2015 levels and reduce
emissions by 1 gigaton by 2030 through an initiative called Project Gigaton.
Strategic action plan:
Walmart approach to environmental, social goal of sustainability while maintaining its
purpose of saving people money so they can live better includes the following key strategic
elements:
Creating shared value: Transforming society through its business is the one of the principle
drivers of Walmart action plan. Walmart increases its business value by addressing important
needs in society. Enhancing customer trust by catalyzing new product lines, increasing
productivity, reducing cost and secure future supply. It also advances living, improves
economic mobility and opportunity, reducing waste and emissions and restore capital.

7. 6
Whole systems change- Walmart has made large scale improvements to its ecosystem of
business to run a good retail business by using its ability to make a difference and using its
strength of 2.2 million associates around the world, supplier relationships, jobs, purchase
orders and expertise.
Business leadership: Sustainability initiatives of Walmart are embedded in its business
planning, performance management practices, operations cycle, policies, project management
and systems and tools.
Aligned philanthropy: The philanthropic model of business of Walmart complements its
business initiatives by accelerating social and environmental transformations. In 2019,
Walmart gave more than $1.4 billion to projects that create opportunity, improves
sustainability and communities.
Collective action: Walmart strategy of collective action is essential to transforming systems.
Walmart design its programs in collaboration with its leaders and stakeholders.
Frameworks such as Global Reporting Initiatives (GRI) standards, the United Nations (U.N)
Sustainable Development Goals (SDGs), the Sustainability Accounting Standards Board
(SASB) and the Task Force are related to climate change.
Walmart monitors its supply chain conditions through audit assessments and investigations,
provide training & tools for its suppliers and collaborate with stakeholders to achieve its
goals.
It has sourcing associates embedded in markets around the world to allow better understand
regional challenges in supply chain and leverage connections.
Example initiatives Walmart is pursuing with suppliers and others:

8. 7
PRODUCT
CATEGORIES
WORKING
CONDITIONS
ENVIRONMENT SAFER &
HEALTHIER
PRODUCTS
TRANSPARENCY
Produce • Collaborating with
industry stakeholders
(e.g., Seafood Task
Force)
• Supporting initiatives
to counter forced labour
in the Thai seafood
supply chain
• Providing
recommendations and
encouraging responsible
recruitment practices
• Third-party
certifications (e.g.,
MSC) • Addressing
overfishing and
bycatch
Third-party
certifications on
packaging, where
appropriate
• Sustainability
Index
Meat & Dairy • Feed grain
sourcing
principles
• Better
practices in
manure
management,
enteric
emissions
and feed
inputs
• Elimination
of net
deforestation
• Promoting
animal welfare
and
responsible
antibiotic use
• Promoting
food safety
(e.g., China
food safety)
• Sustainability
Index
• Supporting Global
Forest Watch

9. 8
due to beef
production
• Project
Gigaton
Seafood • Collaborating with
industry stakeholders
(e.g., Seafood Task
Force)
• Supporting initiatives
to counter forced labour
in the Thai seafood
supply chain
• Providing
recommendations and
encouraging responsible
recruitment practices
• Third-party
certifications (e.g.,
MSC)
• Addressing
overfishing and
bycatch
• Third-party
certifications on
packaging, where
appropriate
• Sustainability
Index
Packaged food
& row crops
• Sourcing from diverse
suppliers
• Research
into
jurisdiction
approaches
• Fertilizer
optimization
to improve
soil health
and water
quality
• Sustainable
package
design and
recycling
• Food
reformulation
(e.g., sugar,
additives)
• Great for You
private- brand
labelling in U.S.
stores
• Third-party
certifications on
packaging, where
appropriate
• Sustainability
Index

10. 9
• Investments
in recycling
infrastructure
• Project
Gigaton
Specialty
Crops
• Providing
recommendations and
encouraging responsible
recruitment practices
• Third-party
certifications (e.g.,
RSPO)
• Water use
efficiency
• Sustainable
package design and
recycling
• Leveraging third-
party certifications,
where appropriate
• Sustainability
Index
Consumables • Encouraging
reduction of
Priority
Chemicals
• Elimination
of
deforestation
due to pulp
and paper
production
• Sustainable
package
design and
recycling
• Advancing
sustainable
chemistry
• Third-party
certifications,
where
appropriate
Encouraging
chemical ingredient
disclosure
• Sustainability
Index

11. 10
• Project
Gigaton
Apparel &
Textile
• Collaborating in
the industry to
promote safer
working
conditions in
ready-made
garment industry
• Providing
recommendations
and encouraging
responsible
recruitment
practices
• Collaborating
with industry
stakeholders
•Factory energy
efficiency
• Energy and water
use in apparel mills
• Project Gigaton
• Every Day Low
True Cost products
• Sustainability
Index
• Higg Index
General
Merchandise
Providing
recommendations
and encouraging
responsible
recruitment
practices
• Sourcing from
diverse suppliers
• Designing
for product
efficiency
and end-of-
life
• Project
Gigaton
• Factory
energy
efficiency
• Leveraging third-
party certifications,
where appropriate

12. 11
• Elimination
of
deforestation
due to pulp
and paper
production
• Sustainable
package
design and
recycling
• Supporting
investments
in recycling
infrastructure
Area of Impact:
The areas of impact in Walmart due to its sustainability initiatives includes macro-economic,
social and environmental trends.
Project Gigaton engages suppliers in setting targets and pursing initiatives to avoid emissions
in any six areas of opportunity: energy use, sustainable agriculture, waste, deforestation,
packaging and product use. To date, more than 1000 suppliers have already signed on the
project.
In 2018 alone, more than 380 suppliers reported having CO2 emissions reduced by
58,904,206 MT.
Walmart reported 6.1 % reduction in scope 1 & 2 annual greenhouse gas emissions in 2017
compared to 2015.

13. 12
Electric vehicle chargers available at 110 retail locations across 29 states.
Results of implementing the change plan
Environmental Impact of Walmart Strategically sustainable supply chain:
6.1% reduction in scope 1 and 2 annual greenhouse gas emissions in 2017
compared to 2015
1000 suppliers formally signed to Project Gigaton
Under Project Gigaton, aim to avoid 1 billion metric ton of greenhouse gases
from global value chain by 2030
In 2018, more than 380 suppliers reported avoiding CO2 emissions totalling
58,904,206 MT
Electric Vehicle chargers available at 110 retail locations across 29 states.

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As a result of implementing sustainable supply chain plan, Walmart is able to reduce its
Annual greenhouse emissions and carbon intensity from 45.06 MT for $M annual revenue for
FY2015 to 37.33 MT per annual revenue for FY2018 as shown below:
28%
• Walmart and sam's club U.S suppliers improved their
sustainability index score by 28% compared to 2018
6.1%
• 6.1% reduction in scope 1&2 annual greenhouse gas
emissions in 2017 compared to 2015
78%
• 78% of waste diverted from landfills and incineration
80%
• As the end of FY2019, acheived supplier participation
rate in sustainability index that cover 80% goods in U.S
28%
• As estimated 28% of electricity from renewable
resources.

15. 14
Walmart ESG Report 1019
Conclusion:
Walmart business exist to serve society in many different ways from good food, sustainable
methods of supply chain, reducing greenhouse emissions to zero waste initiative. They aim to
improve the system on which they rely such as retail workforce and supply chain to build
customer trust, enhance supply security, improve product quality, manage cost, generate
revenue and attract talent. Walmart approach to ESG is a collective approach to alter the
sector in long term for economic stability. Walmart enables its workforce development for
millions of its workers through technology enabling economic opportunity on a global level.
Walmart contributes to social issues like climate change through large scale initiative projects
like Project Gigaton.
Walmart encourages suppliers to report through Sustainability Index, a science based third
party tool and goes beyond just managing risk in sourcing to bring lasting change across
supply chain. Walmart aims to achieve zero waste in operations by 2025, focusing

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specifically on food and plastic waste. Walmart achieved 78% waste diversion from landfill
and incineration, 24 million pounds through customer recycling.
Walmart’s sustainable development goals (SDG) aims to make significant progress on global
economic, social and environmental challenges by 2030 supporting its eight goals of zero
hunger, Decent work and economic growth, Life below water, Gender Equality, Sustainable
cities and communities, Life on land, Affordable and clean energy and Climate action.

17. 16
References:
Andrew Spicer1 and David Hyatt2 ,2017, Walmart’s Emergent Low-Cost Sustainable
Product Strategy, California Management Review , 116-141
LucianoCiravegna, Esteban R.Brenesb
, 2016, Learning to become a high reliability
organization in the food retail business, Journal of Business Research, 4499-4506
ESG Data, 2019, https://corporate.walmart.com/media-library/document/2019-
environmental-social-governance-report/_proxyDocument?id=0000016c-20b5-d46a-afff-
f5bdafd30000, 1-91.
Robert J. Carroll, David M Primo, Brian K. Richter, 2015, Using item response theory to
improve measurement in strategic management research: An application to corporate social
responsibility, https://doi.org/10.1002/smj.2463