Assignment ObjectiveApply the learnings from Lesson 1 to the

Walmart Case:• Visual thinking• Applying the Strategic Planning Framework• PEST analysis and using the Internet to

access data sources• Identifying Opportunities• Matching internal capabilities to market

opportunities• Importance of company culture/leadership• Achieving financial success

External FactorsEnvironment• PEST Analysis

Market Opportunities

Resources & Capabilities

Environment

Industry

Competition

Strengths & Weaknesses

Architecture, Routines & Culture

Team: Ben, Anthony, Natalie and Chase

January 9, 2009P.E.S.T. Analysis 1970 - 1985

Presented by: Benjamin Fieman

• Fiscal Policy has been heavy on spending– The average

spending deficit in this time is 2.95% of GDP, and trending upwards

1970-1985

Source: http://www.heritage.org/research/features/BudgetChartBook/fed-rev-spend-2008-boc-C3-All-Recent-Administrations-Ran-Up.html Sandro Olivieri

National Debt was increasing

• Monetary Policy– Interest rates

throughout this time period trend upward from a low of under 4% to a high of just above 18%

– The dips in rate made it easier for banks to lend Wal-Mart the money it needed to lease new stores, and correlate with high growth periods

– 1971-1973: begins operations in Tennessee, Kentucky, and Mississippi

– Early 1980s: continued westward expansion beyond Texas

1970-1985

Source: http://www.irs.gov/taxstats/indtaxstats/article/0,,id=98123,00.html Sandro Olivieri

Oil prices went through the roof!

Ali Yardi

The US economy experienced severe inflation

Kenny Troop

Fed aimed to tame inflation...Interest rates were at

an all time high in 1982!

1982 Recession was severe and lasted long

Ali Yardi

Unemployment rate exceeded 10%

Kaustubh Thakur

Economy was in the throes of “stagflation”--high inflation and high unemployment

Purchasing power declined

Consumer Sentiment dipped to the lowest level ever in 1980

Kaustubh Thakur

Economic Troubles (1974 - 1985)

Source: http://harvardbusiness.org/flatmm/hbextras/200805/recessions/

73 - 75: Stagflation

75 - 80: Uneasy growth; stagflation continues

80 - 81: Short Recession

81 - 82: Deep Recession

Maureen Stafford

Economical changes!Economical changes!

• Stagflation

• Oil shock

• Unemployment

HongChul Jun

Social Trends

Album of the Year: Saturday Night Fever Best New Artist: A Taste of Honey Best Pop Duo or Group: Saturday Night Fever, Bee Gees Best Pop Female Vocal: “You Needed Me,” Anne Murray Best Pop Male Vocal: “Copacabana” (At the Copa), Barry Manilow Record of the Year: “Just the Way You Are,” Billy Joel

Song of the Year: “Just the Way You Are,” Billy Joel, songwriter

Prevailing Socio-Cultural factors • Increasingly better

informed consumers since WWII.

• TV had intensified advertising by manufacturers.

• Government standards also bolstered consumers’ self-confidence.

• Wanted cheaper, self-service retailers (ie. discount chains).

• Discounters’ sales grew to $68B in 1985.

Natalie Rebot

Technological changesTechnological changes

HongChul Jun

Technological Change

Wal-Mart did not base orders for must SKU’s on centralized sales forecasts. Rather, they created in-store terminals to communicate with their distribution centers that supplied the stores. If stocking levels were low, inventory was automatically ordered.

Kenny Troop

WalmartPEST Impact Matrix

Economy in “stagflation” Interests rates high Unemployment rate highDiscount stores growing Consumers better informedDiscounters like K-Mart focused on metro marketsSam Walton sees opportunity for discount stores in non-metro markets!!Sam Walton recognizes that IT will play a big part increating a competitive advantage for WMTSam Walton creates his Vision, Mission and Goals

Wal-Mart to the Rescue! ↑ Unemployment + ↑ Interest Rates + ↑ CPI

==Maureen Stafford

Walmart succeeds in a tough economy!!

Wal-Mart Performance (In Millions) U.S. Economy

Paranjay Soedradjat