Walmart T5
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Wal-Mart Case Analysis Wal-Mart Case Analysis SHAKY
Transcript of Walmart T5
Wal-Mart Case AnalysisWal-Mart Case Analysis
SHAKY
PEST AnalysisPEST Analysis
Political Change
EconomicChange
Social Change
Technological Change
Nature of Change
Impact of Change
Opportunities Threats Strategic Response
Government standard
Improve consumer’s confidence
Discount retailer
expansion
Increase presence in southwest
High oil prices &
Increase shipping
costs
Lower profit margin
Centralized Distribution
Unemployment
More job seekers Cheap labor Employee
TurnoverLower fixed
costs
Inventory MGMT
Increase inventory turnover
Automation Centralize
Political AnalysisPolitical Analysis
Political AnalysisPolitical Analysis
Economic AnalysisEconomic Analysis
- Strategic distribution allowed Wal-Mart to have - Strategic distribution allowed Wal-Mart to have lowerlower shipping costs during a time of rising oil prices shipping costs during a time of rising oil prices
Social AnalysisSocial Analysis• Wal-Mart organized during period of high unemployment
• Average unemployment rate during1974-1985 was 7.5%
•Heavy communication between top management
• Incentives to keep employeeso Employees received percentage of shrinkage improvemento Profit sharing for store managers
Technological AnalysisTechnological Analysis
•Efficient inventory control processes led to better inventory
turnover
•Pricing strategy determined by store location and research
•Satellite network to reduce telecommunication costs
Results- Nearly double industry average on ROE and sales growth
Wal-Mart ConclusionsWal-Mart ConclusionsFirm’s strengths were distribution, inventory
management, and communication between upper management
Wal-Mart embraced employee input and gave employees incentives to care about store performance which was unique compared to rivals
Firm’s weakness were stores were concentrated in one region of the country however this provided lower rent, cheaper distribution costs, and the greatest population growth which they turned into an advantage
Wal-Mart’s operation was very lean with little long term debt providing maximum value to the shareholders
Thank you!Thank you!
