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Analysis.edited.docx Walmart Strategic Process and Analysis Executive Summary Wal-Mart is the biggest retailer in U.S. and also one of the biggest multinational companies in the world. It is well-known for its low-cost structure and has been doing very well despite of the current market instability. However, it still faces threats from competitors in the retail industry and has weaknesses to be improved in the future. To help Wal-Mart achieve more tremendous success and sustain its competency, this paper will cover an all-rounded and detailed business analysis on Wal-Mart and the industry it is currently in. The analysis will touch on different perspectives, such as Wal-Mart's strength, opportunities, weaknesses and threats. Moreover, a brief overview of the retail industry and Wal-Mart's history are provided to facilitate a more profound and better understanding of the analysis on Wal-Mart. Walmart is a publicly-traded family-owned business that operates a chain of hypermarkets, discount department stores, groceries, and retail shops all around the United States and other countries around the globe. Walmart leads in the physical space in the online retail business. This retail firm is in constant competition (Jean-Paul, 2020). However, Walmart has grown its marketplace for an extended period compared to competitors. The company started as a grocery and retail shop that relied on physical space. Amazon started its operations as an online bookseller company that later expanded its online business to selling other products. However, Amazon recently introduced its online services and has invested massively in digital services and technology (Jean-Paul, 2020). This paper explores VRIO or Value Chain analysis, a PESTLE analysis, and a Five Forces model for Walmart organization.

Analysis.edited.docx edge out its competitors by appealing more to price-sensitive customers. Everyday low price (EDLP) is the cornerstone of Walmart's strategy coupled with high-quality goods and services and excellent customer service. Additionally, the retail's one-stop shopping business model has worked to its advantage by attracting and retaining today's customers who seek the convenience of a one-stop shopping experience. 2.0 ANALYSIS It is the diagnosis of the competitive challenge, which is accomplished through strategy analysis of the firm’s external and internal environments. 2.1 Internal Environment Analyzes Competitive advantages buttress Walmart’s business performance. However, the company needs additional competencies to protect its retail business against aggressive and disruptive competitors.

2. 1.1 Walmart Inc. VRIO or Value Chain Analysis

It upholds material dealing with, distribution center and stock administration to control andmanageits production network cost. This cycle relies upon providers spread across the globe. Walmart have constructed strong association with its providers who give crude materials progressively according to necessity. This drawn out relationship is worked through buying in mass amount consequently decreasing expense. This entire cycle is smoothed out through data framework which imparts and gives ongoing information of deals and stock status so equilibrium can be kept up. Currently, Walmart works in 28 nations under 59 unique names across 11, stores. Its activity is partitioned into three sections to be specific Walmart US, Walmart International and Sam's Club. It is change of contribution to yield through chain of cycle. To accomplish stock proficiency, a production network practice Cross Docking is followed which

Analysis.edited.docx upholds no stocking of merchandise. Most merchandise not touch the distribution center floor as they are straightforwardly moved from approaching trucks to active trucks on a 24 miles length transport line subsequently diminishing transportation cost, transportation time, and stock expense. The items from distribution center are conveyed at stores inside range of 48 hours. The stores are promptly renewed before the stocks began to discharge and thus expands the general productivity of the activity. It follows a decent and prosperous showcasing and deals technique. For a similar they energize new items and imaginative thoughts alongside the danger associated with presenting something similar on the lookout. To catch client section it advances the items from unique recordings and channels to online media. The main trait is client support to keep up brand picture and notoriety in the open market. 2.1.5 Services: It enhances the item to meet consumer loyalty. All stores are coordinated likewise with uniform costs and stores opening times so clients perceive stores any place they go. The shop floor representatives are prepared to speak with clients' prerequisites. The framework of any firm contains Organizational culture, operational exercises and workers. Walmart's have huge foundation which upholds exercises like administration of innovation, store network and Human Resource to serve their clients. Walmart is in Fortune's 100 Best work environments list however in past it confronted serious analysis for helpless human asset the board and outperformed that stage. There is open correspondence among workers and association to advance novel thoughts, face challenges and to make progress toward greatness. It centers around representatives' vocation improvement by giving serious wages and extensive advantages like clinical service, get-aways, and occasion pay. The representatives are trained that the client is in every case right and to imitate something very similar. 2.1.1.1 Non-core Competencies

Analysis.edited.docx Walmart uses an emerging supply chain practice known as "collaborative sourcing program," where the company leverages on its suppliers' purchases to strengthen its buying power. The brand buys its sugar, paper, and bags for purposes of cutting larger deals. It achieves this by consolidating with its suppliers who supply the components above. Walmart's supply chain is considered the most technologically advanced and efficient in the retail industry. The company's supply chain management combines vendor roles in distribution, electronic product information, and its warehouses' strategic layout (Tan et al. 2018). Walmart's supply chain is based on three goals: mastering the art of determining what is needed, how much is needed, and when it needs it. By using RFIDs and barcodes (Tan et al. 2018), the company's unique supply chain management makes it a pioneer in getting detailed product information electronically. The firm's technological advantage in supply chain management plays a critical role in its excellent inventory management system. 2.1.1.3 Walmart Inc Capabilities A core capability is defined as a firm's set of skills, professionals, resources, or people who are distinctively superior to the competition. Core capability takes time as the organization learns how processes and resources work together for the company's benefit. The success of these firms leads to sustainable competitive advantage. ( Chekwa, 2015). The firm also gains a high position in a market share. There are four key elements of core capabilities. They include physical and technical systems, organizational systems, People, team and skills knowledge, and regulation of values. 2.1.2 Walmart Competitive Advantage Walmart has a competitive business strategy. Its price differentiation in the market makes it have a high competitive advantage over Amazon. Walmart's generic strategy is cost leadership.

Analysis.edited.docx According to Michael Porter, cost leadership is a competitive strategy that focuses on achieving low costs.

. The following are types of competitive advantages of business;

• Cost competitive advantage occurs when a firm utilizes its skilled workforce, Inexpensive raw

materials, controlled costs, and efficient operation to ensure customers' maximum value.

• Product service differentiation: Firms can have a competitive advantage in the marketplace

through product/ service differentiation. A firm has a competitive advantage if it provides unique products or services

• Distribution Network; A unique distribution channel for company products can be a great way

to differentiate the firm products and build a competitive advantage

• Intellectual property: Intellectual property such as software, knowledge, skills, trade secrets, and

technology can build an essential competitive advantage for the firm.

• Customer service: Good customer service in an organization can attract potential customers;

also, it can build loyal consumers. 2.1.3 Walmart business strategy The first strategy is to have proper technical systems and capabilities. Walmart has a long way to match Amazon's digital solutions level in the retail business. The company has revolutionized the shopping experience. There are more reasons for Walmart to improve its e-commerce systems. For instance, 74 percent of consumers prefer shopping online to physical stores, as Lauren Thomas (2019) suggests. Shoppers are gradually moving from brick-and-mortar stores to embrace the convenience of shopping technologies. Because of this, Amazon enjoys a 52. percent share in the e-commerce market, with Walmart and several other brands sharing the rest.

Analysis.edited.docx 2.1.4 Organizational structure and management system design A collaborative sourcing program is designed to find joint benefits across the entire supply chain for both purchaser and supplier. The program benefits Walmart significantly in several ways. For instance, by identifying joint benefits between its suppliers up and down the supply chain, Walmart gains the power to stabilize its supply chain. A stable supply chain is essentially reliable and predictable, meaning Walmart can deliver against its customers' requested delivery date, which varies between customers and orders (Tan et al. 2018). Secondly, collaborative sourcing eliminates unnecessary middleman costs such as marketing or administrative fees, enabling Walmart to lower its product prices than market rates. 2.2 Analyze the external environment 2.2.1 PESTLE Analysis Walmart’s macro-environment or remote environment involves dynamics that determine the success of company. Political Factors Walmart considers political variables in the retail market, for the most part relating to government arrangements. In the PESTLE examination model, politically dynamic vested parties are additionally huge. The far off/full scale natural elements show that Walmart should address the danger of higher wages. This is a danger since it conflicts with the expense minimization fundamental in Walmart's expense authority nonexclusive system. Walmart's outer climate incorporates high security of governmental issues, political help for globalization, and political pressing factor for higher wages. Economic Factors

Analysis.edited.docx Walmart is feeling the squeeze from financial changes. Any such change straightforwardly prompts changes in the organization's incomes. The financial Walmart's outer variables in full scale climate incorporate dependability of significant economies, proceeded with development of agricultural nations, and diminishing joblessness in the United States. These financial variables show that Walmart should abuse openings around the globe. Accentuation ought to be on the quickly developing economies of non-industrial nations, which have expanding interest for merchandise from retail firms like Walmart. Social/Sociocultural Factors The social or sociocultural variables in the business climate of Walmart impact buyer discernment and inclinations. The Walmart's social outside factors incorporate solid way of life pattern, social variety pattern, and metropolitan relocation. These social/sociocultural variables present freedoms for Walmart. The organization can build its variety of invigorating items. Walmart can likewise expand the assortment of its items to fulfill different social inclinations. In addition, the organization can change its techniques to misuse expanding buyer interest in urban communities and encompassing zones. Technological Factors Walmart needs to address innovative patterns. With regards to the PESTEL/PESTLE investigation model, advances influence the retail business' serious scene. The Walmart's innovative outer elements incorporate expanding business robotization, business examination or enormous information, and expanding cell phone utilization among customers. Walmart can expand its interest altogether three elements. In abusing the chance in cell phone utilization of clients, the organization should help its online presence. Web based showcasing and internet selling increment Walmart's incomes.

Analysis.edited.docx yet to contend with Amazon on the international scene. Porter's five forces would help Walmart develop strategies for a sustainable competitive advantage and long-term profitability. New Entrants’ Threats The retail sector is highly attractive and competitive at the same time. As current players become advanced, new and emerging businesses in the sector bring innovative solutions and methods of doing things (Barberá Marcilla 2014). In other words, new entrants can exert pressure on Walmart through cost-saving practices, better value propositions, and lower pricing. However, Walmart is an already established brand with vast experience and immeasurable presence throughout the United States. New entrants will require huge capital and expertise to build a recognizable and reliable brand like Walmart. As such, Porter's threat of new entrants exerts a medium force on Walmart. Buyers’ Bargaining Power Buyers in the retail sector are excessively demanding. The industry is characterized by customers who what the best quality and experience at the lowest possible price. They also expect efficiency and convenience in their shopping experience. Customer behavior in the retail industry explains why brands like Walmart, with the best offering at minimal prices, thrive (Barberá Marcilla 2014). However, the best-quality-and-low-price model hurt a brand's profitability in the long run. According to Dobbs (2014), a smaller and more powerful customer base increases buyers' bargaining power because they can seek offers and discounts. The case is different for Walmart, and it comprises hundreds of millions of customers who often make small purchases. Thus, Walmart experiences a low bargaining power of buyers. Suppliers’ Bargaining Power

Analysis.edited.docx The retail and discount industry is marked by stores procuring materials and goods from diverse customers. Suppliers' dominant market positions can use their negotiating power to extract higher prices from firms in the industry. A higher supplier bargaining power means significantly reduced profitability in a discount store. However, this only applies to some types of retailers. Walmart's ability to sustain its pricing strategy and cost leadership is its ability to secure suppliers' least possible prices. For a supplier to work with the brand, they must meet certain requirements, including prices, reliability, cost, employee health, safety, and more (Kumar and Bhardwaj 2018). As such, the bargaining power of suppliers on Walmart is insubstantial. Threats of Substitute Services and Products A threat of substitute products and services occurs when a new product or service meets similar customer needs in different ways. The threat affects a firm and industry's profitability adversely. A classic example of the threat includes Google Drive replacing hard drives with better data storage solutions. The threat of substitute products and services would be expected to be high in the retail industry due to Walmart's nature of business (Barberá Marcilla 2014). However, this is not the case. The leading retailer offers thousands of items in a different variety, all existing in different categories. Walmart's line of products makes substitute products and services a weak and irrelevant force. The Existing Players’ rivalry An intense rivalry between competitors drives prices down, causing reduced profitability of an industry. The United States retail industry has major brands like Target, Costco, Amazon, Best Buy, and more aside from Walmart (Banerjee 2015). These firms are of varying sizes and adopt different business models, causing a strong industry rivalry. To win more customers, who

Analysis.edited.docx International expansion presents multiple opportunities for the company's growth and development goals. The firm has dominated the domestic market-beating the likes of Amazon. The United States is also Walmart's largest market segment that also generates the most significant portion of its revenues. However, faster growth will only be achieved if the company pursues global expansion strategies on its current physical retail business model as well as its growing digital platform. Walmart's presence spans 26 countries, less than half Amazon's 58 nations (Kumar and Bhardwaj 2018). Therefore, internationalization will help the company reduce its overdependence on the local market and elevate the company to take on Amazon. Walmart's domestic and international presence is unleveled; however, its presence in the digital market is incomparable to the likes of Amazon (Pratap 2020). Amazon's success in the e- commerce market has made it difficult for other brands to compete. Even though Walmart is considered a rising contender, emulating Amazon's technological infrastructure that is often described as extremely effective and efficient will be a huge task. The role of leadership in the strategic planning process Authority altogether affects vital administration measure. Particularly it assists with deciding the vision and mission of the association. Further, it encourages the association to execute compelling procedures to accomplish that vision. The examination uncovers that administration fills in as a connection between the spirit and the body of an association. For the effective execution of methodologies, the test of initiative is to be solid however not discourteous, be thoughtful but rather not frail, be unassuming but rather not bashful, be pleased but rather not egotistical, have humor but rather without indiscretion. Administration must have the assessment cycle to guarantee the adequacy of the entire interaction, and this viewpoint will encourage to distinguish the disadvantages and to make new the methodologies in accordance with the change

Analysis.edited.docx too. Besides, this assessment cycle can help and support the steady development of the foundation. In this way, it very well may be said that administration is known as the core of the association, and it ought to have the significant job like the job of blood and cerebrum; accordingly, the results of the achievement can be ensured and be shared. Implementation A set of coherent actions to implement the firm’s guiding policy, which is accomplished through clear communication, organizational structure, organizational culture, and control (p.7). After the overall analysis of Wal-Mart and the industry in which it is operating, strengths, opportunities, weaknesses and threats are identified. To help Wal-Mart achieve greater success and continue its profitable sales, Wal-Mart should exploit its strengths, utilize opportunities, improve weaknesses and remove threats. Thus, recommendations associated with each section should be carefully considered and adopted. Walmart has a robust supply chain network and logistics management. The corporation's robust supply chain network has enabled it overcome competition in the retail industry and set it apart from its rivals (Pratap 2020). The excellent supply chain works to the company's advantage in four critical ways. For example, it ensures Walmart acquires goods and services at lowest prices, minimize costs, control operating expenses, and improve efficiency in managing international business. The company's pricing strategy and brand popularity are its major sources of competitive advantage. Walmart's supply chain and pricing strategy have been the company's central focus since its inception. Its pricing strategy is the main reason for its tremendous growth and leadership in the domestic and global retail industry. Even companies with advanced innovative solutions like Amazon recognize Walmart's effective pricing strategy, keeping prices as low as possible—EDLP, an approach the company has sustained despite economic pressures (Pratap

Analysis.edited.docx high. In other words, Porter's five forces techniques show the degree to which competition is a huge concern for Walmart. However, Walmart can counter the rivalry using three strategies and first, investing heavily in sustainable differentiation to make the brand competitive and its products superior to alternatives in the market. Scaling its systems, processes, staff, technology, and partner and increasing market size through consolidation strategies. The analyses above offer interesting insights into Walmart's ability to compete directly with Amazon. Walmart enjoys a strong brand presence in the United States from its brick-and- mortar setup. It is the king of physical stores in the United States market. The analysis also indicates that Walmart has a superior pricing strategy and an efficient supply chain. The company's EDLP pricing strategy and its reliable and robust distribution network make it a dominant retail enterprise. It also has a promising growth in the online market. However, competition is a major concern as far as the brand's future is concerned .

Analysis.edited.docx References Adams, P., 2018. 63% of Consumers Prefer to Purchas from Purpose-Driven Brands, Study Finds. Atsinikas, 2017. Why Walmart will Beat Amazon in e-commerce. Retrieved from https://digital.hbs.edu/platform-rctom/submission/why-wal-mart-will-beat-amazon-in-e- commerce/# Banerjee, D., 2015. Walmart Stores Inc.-A Strategic Analysis. International Journal in Management & Social Science , 3 (12), pp.202-225. Barberá Marcilla, L., 2014. Business analysis for Wal-Mart, a grocery retail chain, and improvement proposals (Doctoral dissertation, Universitat Politècnica de València). Collis, D.A.V.I.D., Wu, A.N.D.Y., Koning, R.E.M.B.R.A.N.D. and Sun, H.C., 2018. Walmart Inc. takes on Amazon. com. Harv. Bus. Sch. Publ , p.30. Dobbs, M.E., 2014. Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review. Dopson, E., 2020. How to Beat Amazon: Amazon's weaknesses and Shortcomings. Ellickson, P.B., 2016. The evolution of the supermarket industry: from A & P to Walmart. In Handbook on the Economics of Retailing and Distribution. Edward Elgar Publishing. Grundy, T., 2006. Rethinking and reinventing Michael Porter's five forces model. Strategic Change , 15 (5), pp.213-229. Kashirin, A.I., Semenov, A.S., Strenaluk, V.V., Ostrovskaya, A.A. and Kokuytseva, T.V., 2016. Development and Management of Key Competencies in A Corporation: The World Experience. International Research Journal , (8 (50) Part 1), pp.44-49. Kohan, S. E., 2020. Walmart's E-commerce Grows 97% compared to the industry's 27%. Retrieved from https://www.forbes.com/