A

Case Study on

Wal-mart Stores Discount Operations

In Partial Fulfillment to the Requirements in the Subject:

Internet Research for Business

Submitted to:
Jojie R. De Ramos
Instructor

Submitted by:
Laylo, Arlyn P.
Fermante, Babylyn B.

Oct. 29,2021
 I. INTRODUCTION

Background
Wal-Mart describes discount retailing and distinctive features. Wal-Mart followed on the heels
supermarkets which sold food at unprecedently low margins. Discounts stores has gross margins that
were 10%-15% lower than other stores. Wal-Mart like other stores had centralized purchasing. Wal-
Mart also opened distribution center. Wal-Mart’s business model has been examined in terms of its
potential success for entry into emerging markets. The company’s supply chain management and its
strengths as a retailer for strategic manufacturers have been examined alone with drawbacks that the
company has in its supply chain network. Following sections look into the internal and external
environment of Wal-Mart in depth to highlight the company’s position in each of the markets where it
operates with its massive network of discount stores and sully chain. These major retailers having
spread their network internationally; the competitive rivalry is not just limited to national boundaries.
Threat of new entrants in the global discount retailing is low if the entry of a completely new player is
considered. This is because the large discount retailing chains have not only limited their networks to
developed nations but are also ready to avail the potential that emerging markets like Hungary,
Turkey, Brazil, Argentina and India have to offer especially as many of the emerging markets have a
wave of de-regulation. However, threat of new entrants may be there to some extent given the fact
that upstart chains like Dollar General with comparable low prices offer personalized experience to
customers in contrast to the impersonal shopping experience that large discount retailers offer have
emerged with in the competitive environment. With each of these retailers enjoying economies of
scale in purchasing, negotiating favorable contracts with manufacturers and enjoying
dominance in terms of offering shelf space, the bargaining power of the supplier is low in
comparison to the bargaining power of the buyer. In addition to this, discount retailers like Wal-
Mart have started offering direct competition to suppliers by introducing their own labels and
selling them alongside famous brands like Procter & Gamble (P&G) and Kraft. With
approximately 30,000 suppliers looking towards these giant retailers, the bargaining power of
suppliers is low in this industry as these retail giants are needed by these suppliers for sales
volume much more than these retailers need them.
 STATEMENT OF THE PROBLEM
Wal-Mart made certain that they were aware of the political context in every country in which they did
business, and that the company maintained a favorable posture on political problems. Wal-Mart is
always prepared to deal with any political issues that arise. Wal-Mart has spent money on political
matters in the past. Wal-Mart Stores USA, Sam's Club, and Wal-Mart International were the three
business units that made up the corporate organization. Although Wal-Mart is a publicly traded
company, the Walton family still owns the majority of the stock. As a result, when it comes to global
sales, there is a lot of family participation at the top. The factors that contribute to this
accomplishment are numerous and relate to the company's strategic decisions about how it
competes. The effects of suppliers, competition, and consumers on the company, as well as the
effect of Wal-Mart on them, must be considered while analyzing the company's plans. Economies of
scale and scope, as well as considerations connected to entry and exit within the business, are the
main economic ideas used to explain Wal-growth Mart's and efficiency. In locations where it was the
only retailer, Wal-Mart routinely controlled 10% to 20% of overall retail sales. Promotional Techniques
"Everyday low prices" was Wal-philosophy. Mart's Almost every week, the competitor's dropped
prices by 20% to 30% on certain items. For the same, a lot of promotional/advertising costs were
incurred.
 OBJECTIVES

Competitive pressures prevailing in the current marketplace that are damaging to Wal-Mart Stores'
business operations have been identified, as well as relative strengths and weaknesses. Walmart is
known for its capacity to deliver "so darn cheap you can't believe it" merchandise. But Walmart's
business approach is more than just low prices. A garden center, pharmacy, Tire & Lube Express,
optical center, one-hour picture processing lab, portrait studio, bank branch, cell phone store, and
fast food outlet are all available in many of these stores. Some have gas stations as well. In the year
1990, In Bentonville, Wal-Mart opened the first Bud's Discount City store. Bud's was similar to Big
Lots in that it was a closeout store. As Wal-Mart stores closed and moved into newly built
Supercenters, many new locations were opened to fill leases in retail complexes. By 1997, all Bud's
Discount City locations had closed or been turned into Wal-Mart Discount Stores. There were 810
Walmart Discount Stores in the United States as of December 2009. In 2006, one in Rapid City,
South Dakota, was the busiest in the world.
 AREAS OF CONSIDERATION
SWOT Analysis of Wal-Mart Stores' Discount Operations

Internal Strengths Internal Weaknesses

· Strong brand name · Only attract price sensitive shoppers
· Strong bargaining power over suppliers · May lose control and lack of coherent
strategy due to huge expansion plan
· good supply chain management nationally and internationally
· Strong culture · The company is global but has presence
· Capable associates in relatively few countries worldwide
· Wal-Mart sell products across many
· Strong presence in Canada and Latin
sectors it may not have the flexibility of
America
some of its more focused competitors
· Low Price and Customer oriented
· Huge financial resources commitment in
· Expansion Strategy expansion
· Strong financial and IT resources. · High turnover rate of inventory
· Good customer service and pleasant
shopping experience with free parking.
External Opportunities External Threats
· Big potential market in Europe and Asia · Sustain market leader position
· Global Expansion · Competitors like, Tesco & Carrer-Four
· Increasing online sales. · Tariffs and taxes that the company has
in different countries, each countries has
· Strategic alliances acquiring rival firm. its own rate of taxes and tariff that
· Improve the feature of their website. creates additional expenses for the
company.
· To take over or joint venture to enter in
global market · Exposed to competitions from various
fronts
· Strong power over suppliers due to
large volume of purchases. · Face potential political problems,
cultural and practice differences
· Everyday low price.
· Intense price competition
· Growing international sales resulting
from new market opportunities that · Large foreign competitors entering U.S.
exist in foreign markets including and international markets where Wal-
Canada, Mexico, Japan, UK, Taiwan, Mart is present
Korea and Porto Rico.

EVALUATION
Wal-Mart’s business model has been examined in terms of its potential success for entry into emerging markets. The company’s
supply chain management and its strengths as a retailer for strategic manufacturers have been examined alone with drawbacks that
the company has in its supply chain network. Following sections look into the internal and external environment of Wal-Mart in depth to
highlight the company’s position in each of the markets where it operates with its massive network of discount stores and sully chain.
The purchasing power, aggressive marketing and provide low prices to the customer by Walmart, tend to pull out the business by the
small merchants. Gradually the dream of Walmart company to become the largest retailer in the world is full filing day-by-day. But, they
increase their business by the wrong actions and do not respect the culture or language of the communities. There are different
business Models that are followed by successful companies which varies from time to time. The business model of Walmart is based
to eliminate the Middleman from the distribution channels. The advantage after removing the middleman is to provide benefit to the
consumer by providing products at lower costs. The main motive of the Walmart business strategy company is to enter every segment
of the market and dominate the market by providing products at a lower price. The main marketing strategy of the company is based
on leading on price, be competitive, and deliver a great experience by the motto of Everyday Lower price. Company history is provided
in the first half of the case. You can use this history to draw a growth path and illustrate vision, mission and strategic objectives of the
organization. Often history is provided in the case not only to provide a background to the problem but also provide the scope of the
solution that you can write for the case study.

HBR case studies provide anecdotal instances from managers and employees in the organization to give a feel of real situation on the
ground. Use these instances and opinions to mark out the organization's culture, its people priorities & inhibitions. Make a time line of
the events and issues in the case study. Time line can provide the clue for the next step in organization's journey. Time line also
provides an insight into the progressive challenges the company is facing in the case study. In our live classes we often come across
business managers who pinpoint one problem in the case and build a case study analysis and solution around that singular point.
Business environments are often complex and require holistic solutions. You should try to understand not only the organization but also
the industry which the business operates in. Porter Five Forces is a strategic analysis tool that will help you in understanding the
relative powers of the key players in the business case study and what sort of pragmatic and actionable case study solution is viable in
the light of given facts. Once you have developed multipronged approach and work out various suggestions based on the strategic
tools. The next step is organizing the solution based on the requirement of the case. You can use the following strategy to organize the
findings and suggestions.

Build a corporate level strategy - organizing your findings and recommendations in a way to answer the larger strategic objective of the
firm. It include using the analysis to answer the company's vision, mission and key objectives , and how your suggestions will take the
company to next level in achieving those goals. Business Unit Level Solution - The case study may put you in a position of a marketing
manager of a small brand. So instead of providing recommendations for overall company you need to specify the marketing objectives
of that particular brand. You have to recommend business unit level recommendations. The scope of the recommendations will be
limited to the particular unit but you have to take care of the fact that your recommendations are don't directly contradict the company's
overall strategy. For example you can recommend a low cost strategy but the company core competency is design differentiation. Case
study solutions can also provide recommendation for the business manager or leader described in the business case study.The goal of
the business case study is not only to identify problems and recommend solutions but also to provide a framework to implement those
case study solutions. Implementation framework differentiates good case study solutions from great case study solutions. If you able to
provide a detailed
 STRATEGY FORMULATION
The market has been consistently growing in recent years, however some professional
estimates are more pessimistic, Walmart (American retail brand) was incorporated in
1969 in Delaware. It is the biggest retail brand of America and has seen fast growth in
recent years. Today, it has more than 11,300 stores (2019) as well as numerous e-
commerce websites under 58 banners in 27 countries from which it serves more than
275 million customers every week. Walmart provides a very large assortment of quality
merchandise and services at affordable prices to its customers. The central attraction
of Walmart’s value proposition are its Everyday Low Prices. If the brand has reached a
leading position in the retail market then it is because of its attractive pricing strategy.
 ACTION PLANS / PROGRAMS

Action Step Responsibilities Timeline Resources Potential Barriers Communication

What will be Who will do it? By when? Plan
done?

Implementing City Marketing October 1-30 A. The data A. Community Professional

critical path 2021 survey conducted and the Marketing
analysis method in community. Government
B. Financial B. Vision and
Resources Mission will be
implemented
before doing the
action plan.
 CONCLUSIONS
Wal-Mart has created a terrific workplace climate that is full of rivalry, self-improvement, and respects
that set the company apart from its competitors. Wal-Mart is the largest retailer in the United States and
ranks first among Fortune 500 companies. Wal-Mart operates in a number of nations throughout the
world and expands into new ones every year. Wal-Mart is growing as a retailer as well. They've branched
out into a variety of different markets, including supermarkets, petrol stations, electronics, and car repair.
Every year, Wal-Mart discovers new methods to expand and provide more services to its customers. The
company's low-cost strategy drives more customers to Wal-Mart, resulting in a higher profit margin.
Furthermore, the company has met the needs of its clients by providing a diverse selection of items,
lowering the risk of customer turnover. The company is well-positioned and has the ability to control a
significant portion of the market. It has opened numerous stores around the world and plans to establish
more. Every year, the organization discovers new ways to meet the needs of its customers. Because of Wal-
ever-increasing Mart's scale and variety of offerings, their public affairs department will become
increasingly significant. Wal-Mart will be subjected to increased regulation, and their public affairs staff
will have to work harder to ensure that the company can continue to grow. To keep their good name, Wal-
Mart will have to put in more effort.
 REFERENCES
https://www.bartleby.com/essay/A-Case-Study-on-Wal-Mart-Stores-P3MSRCA5HKGEZ
http://easy2clear.blogspot.com/2014/10/internal-and-external-environment-of.html
https://www.grin.com/document/266297https://blog.marketresearch.com/walmarts-competitive-
http://fernfortuniversity.com/hbr/case-solutions/15537-wal-mart-stores--discount-operatio.php