Walmart : Study of its internal and external Business Economic Environment and SWOT analysis

1. The Business Environment

2. Agenda
• Internal Environment
– Mission & Objectives
– Value System
– Management Structure & Financials
– Human Resources
– Company Image & Brand Equity
– R&D Capability

3. Agenda
• External Environment
– Micro Environment
• Suppliers
• Customers
• Competitors
– Macro Environment
• Economic
• Political
• Socio-Cultural
• Technological
• Natural
• SWOT Analysis

4. Internal Environment
• Mission Statement & Objective
“We Save People money so they can live better.”

5. Internal Environment
• Value System
– 3 Basic Beliefs & Values
• Respect for the Individual
• Service to Our Customers
• Striving for Excellence

6. Internal Environment
• Value System
– Open Door Policy
• Manager’s Doors are open to employees at all levels
– Sundown Rule
• Answering employee, customer and supplier queries on
the same day
– Grass Root Process
• Capturing suggestions and ideas from the sales floor
and front lines

7. Internal Environment
• Value System
– 10 Foot Rule
• Making eye contact, greeting, and offering help to
customers who come within 10 feet
– Servant Leadership
• Leaders are in service to their team
– Wal – Mart Cheer
• Chant created by founder Sam Walton to lift the morale
every morning

8. Internal Environment
• Background
– Started by Sam Walton in 1962 in
Rogers, Arkansas
– Headquarters in Bentonville, Arkansas
– Largest grocery retailer in USA
– 10,700 stores in 27 Countries under 69 different
names

9. Internal Environment
• Management Structure & Financials

10. Internal Environment
• Human Resource
– Employs 2.2Million people around the world earning
between $50,000-$1,70,000 a year
– Employee Emphasis on
• Integrity
• Respect
• Open Communication
• Innovation
Whether a part-time job or the career of a
lifetime, working at Walmart means
opportunity!

11. Internal Environment
• Image & Brand Equity
– Most Valuable Retail Brand with a worth of $34.4
Billion
– Walmart follows
• Environment Sustainability
• Fight Against Hunger
• Women’s Economic Empowerment
• Diversity & Inclusion
• Ethical Sourcing
• Veteran’s & Military Families

12. External Environment
• Micro Environment
– Suppliers
• National Product Suppliers
• Local Product Suppliers
• Service & Non-Resale Suppliers
• Direct Import & Global Suppliers
There are a total of more than 100,000 suppliers for
Walmart world over!

13. External Environment
• Micro Environment
– Suppliers
• Standard For Suppliers
– Compliance With Laws
– Voluntary Labor & Labor Hours
– Proper Compensation
– Health & Safety
– Financial Integrity & Anti-Corruption

14. External Environment
• Micro Environment
– Suppliers
• Audit Process
– Opening Meeting
– Factory Tour
– Employee Interviews
– Documentation Review
– Closing Meeting & Signing Onsite Report
• Four Outcomes
– Green
– Yellow
– Orange
– Red

15. External Environment
• Micro Environment
– Suppliers
• 3000 + Suppliers
• National Minority Supplier Development Council
• Women’s Business Enterprise National Council
• Disability Supplier Diversity Program

16. External Environment
• Micro Environment
– Customers

17. External Environment
• Micro Environment
– Customers
• Wholesale
• Retail
• Industrial
• Government
• Foreign

18. External Environment
• Micro Environment
– Competition for Walmart (Industry Competition)
• In USA
– Kmart
– Target
– ShopKo
– Meijer
• In Canada
– Real Canadian Superstore
– Giant Tiger
• In Mexico
– Comercial Mexicana
– Soriana

19. External Environment
• Micro Environment
– Competition for Sam’s Club (Industry Competition)
• Costco
• BJ’s Wholesale Club

20. External Environment
• Macro Environment
– Economic
• With its operations spread worldwide, and majority of
business coming from USA, Walmart post recession has
suffered a loss in sales but has not been severely
affected due to sheer volume and presence in other
economic zones
• Economic Impact of Host Country
– Challenges of high interest rate
– Higher fuel & energy cost
– Inflation
– Higher level of unemployment
– Higher Tax Rates

21. External Environment
• Macro Environment
– Political
• Political environment is again region specific and
Walmart currently is not facing any major political issues
except in India with the fight over 100% FDI in retail
• Failure in Germany occurred because Walmart could not
sell its products below the prices fixed in the Euro Zone

22. External Environment
• Macro Environment
– Socio-Cultural
• Perfectly suited for the US Market
• Failure in Germany & China due to standards set by
Walmart and Organizational Cultural Clashes
• In current markets there is an increase in urbanization
and habits & preferences which would suit the cause of
Walmart

23. External Environment
• Macro Environment
– Technological
• With one of the best and most sophisticated logistics
software and many other new innovations to their credit
in Retail Management, Walmart has always been a front
runner when it comes to Technological Advancements in
its field and puts back a huge sum back on R&D so that it
can maintain its position as the No.1 Retail Brand

24. External Environment
• Macro Environment
– Natural
• To be supplied 100% by renewable energy
• To create zero waste
• To sell products that sustain people and the environment

25. SWOT Analysis
• Strengths
– Huge & Loyal Customer Base
– Strong Employee Base
– Strong Financial Position
– Lowest Prices offered in the Retail Industry
– Widest Range of Product Offerings
– Core Competencies including IT, Supply Chain &
Inventory

26. SWOT Analysis
• Weaknesses
– Mass procurement  Overstocking
– Sheer size leads to complications
– Strong only in the Host Nation

27. SWOT Analysis
• Opportunities
– Expansion in International Markets
– Online Products for Sale
– Acquiring suppliers, further reducing costs
– Expand Brand Portfolio

28. SWOT Analysis
• Threats
– Economic Slowdown in Host Country
– Government Regulations
– Increase in Competition
– Changes in Tax Rates & Exchange Rates

29. Thank You