SUKKUR INSTITUTE OF BUSINESS ADMINISTRATION

FACULTY OF BUSINESS ADMINISTRATION

Name: Ventakash Pawan Bodani
CMS: 123-15-0017
Strategic Business Management
BS VII (A&F)
Fall 2018
Walmart Case Answers:
Case Questions

1. Pastel Analysis and any identify key factors. (EACH COMPANY)

Pastel define Identify Reasons Counter (Strategies)
Political Political  External  Because these
factors play a Factors policies are
significant role such as derived from
in determining governme the
the factors that government.
nt factors.
can impact
 Taxation-  Tax rate
Wal-Mart affects the sale
Stores, Inc.'s tax rates
price of the
long term and goods in the
profitability in incentives. store.
a certain  Political  Wal-Mart has
country or action and faced political
market. Wal- law suits. action and law
Mart Stores,
 Mandator suits for
Inc. is
y different
operating in
employee reasons.
Discount, Gender
Variety Stores benefit.
 Political discrimination
in more than lawsuit was
dozen pressure
filed against
countries and for higher the company
expose itself to wages. in 2007. It
different types
alleged that
of political women
environment
employees
and political
faced
system risks. discrimination
The achieve
in terms of
 success in such payments and
a dynamic promotions.
Discount, These few
Variety Stores regulations
industry across impact the
various perception
countries is to people have
diversify the towards the
systematic brand of being
risks of employee
political friendly and
environment. socially
conscious
company. A
negative news
can impact the
sales of the
company
adversely
 Political
turmoil can
result in
slowdown of
the
organization
retail industry

Economical Economic  Revenues  Negative
factors have a and profits impact is due
significant are to the global
impact on how impacted scale of
an by a range Walmart
organization of external
does business operations.
economic
and also how factors.  The company
has been
profitable they  Strong
traditionally
are. Factors USD
include – criticized for
relation to
economic paying
other
growth, employees low
currencies
interest rates, wages,
had
exchange rates, although
negative
inflation, Walmart has
impacts on
disposable no other option
sales in
income of in order to be
2015.
consumers and able to sustain
 Cost of cost leadership
businesses. labor is competitive
another advantage in
important the market.
 economic  During
factor that the recession,
effects people were
revenues forced to cut
for down costs
Walmart, which had
as well as, affected
revenues of the revenue
any other and profits of
business. businesses.
 macroecon Now, that
omic the world
climate and economy is
economic back on track
stability in people have
the country, again started
changes in spending on
tax rates, retail and other
unemploy items.
ment rate,  profitability of
interest the retail
rates sector is going
 more to increase in
dispensable the coming
income to years
spend.
 Governme
nt
interventio
n in the
free
market
and related
Services
 Exchange
rates &
stability of
host
country
currency.
 Efficiency
of
financial
markets –
Does Wal-
Mart
Stores,
Inc. needs
 to raise
capital in
local
market?
 Infrastruct
ure quality
in
Discount,
Variety
Stores
industry
 Comparati
ve
advantage
s of host
country
and
Services
sector in
the
particular
country.
 Skill level
of
workforce
in
Discount,
Variety
Stores
industry.
 Education
level in the
economy
 Labour
costs and
productivi
ty in the
economy
Social Also known as  influence  Increased use  The company
socio-cultural the buying of digital can adjust its
factors, are the behavior technology strategies to
areas that of custome and increased exploit
involve the rs smartphone increasing
shared belief  influences usage have consumer
and attitudes of the also demand in
the population. profitabilit encouraged cities and
These factors online
include – y of the shopping, this surrounding
population Walmart is a threat for areas.
growth, age  Customer Walmart
distribution, service and which have not
health customer still spread
consciousness, convenienc their online
career attitudes e, customer presence
engagemen globally.
t and social  These
media have social/sociocul
also tural factors
become present
important opportunities
trends that for Walmart.
are The company
affecting can increase its
the array of
Walmart. healthful
 Healthy products.
lifestyle Walmart can
trend also increase
the variety of
 Cultural
its products to
diversity satisfy various
trend cultural
 Urban preferences.
migration  Shared beliefs
 Culture and attitudes
(gender of the
roles, social population
convention play a great
s etc.) role in how
 marketers at
Wal-Mart
Stores, Inc.
will
understand the
customers of a
given market
and how they
design the
marketing
message for
Discount,
Variety Stores
industry
consumers.
 There are a
number of
countries
 where people
do not like to
travel a great
deal in order to
buy their daily
rations.
Therefore, it
would
translate into
loss of
business for
Wal-Mart as it
cannot open
stores in every
nook and
corner.
Legal Legal factors  Anti-trust  The legal
include: health law in framework and
and safety, Discount, institutions are
equal Variety not robust
opportunities, Stores enough to
advertising protect the
industry
standards, intellectual
consumer and
property rights
rights and overall in of an
laws, product the organization.
labelling and country. A firm should
product safety  Discrimin carefully
ation law evaluate
 Copyright, before entering
patents / such markets
Intellectua as it can lead to
l property theft of
law organization’s
secret sauce
 Consumer
thus the
protection overall
and e- competitive
commerce edge.
 Employm  Wal-Mart is
ent law facing
 Health and numerous law
safety law suits filed by
 Data its employees
Protection in relation to
 Law suits various HR
 issues, which
hampers its
brand image as
an employer.
 There are
several laws
that the retail
brands are
required to
remain
compliant
with,
Noncomplianc
e can result in
poor
reputation as
well as
financial
losses.
 In its history
the largest
number of
lawsuits that
Walmart has
faced have
been related to
labor force.
From
discrimination
to low wages,
several types
of legal issues
have continued
to make the
situation
difficult for
Walmart.
 In the recent
years,
Walmart has
focused on
making work
conditions
better for its
staff.
 Still, the labor
related issues
are far from
being over for
Walmart.
 Law is an
important
factor
because legal
 pressures do
not just result
in loss of
business but
legal
challenges can
also result in
substantial
fines and
financial
losses.
Technological Technological  Recent  There has been  Wal-Mart need
factors affect technologi abundant use to invest in
organizations cal of technology Research &
and the developm in the retail Development
management ents by sector activities,
thereof in three worldwide, automation,
Wal-Mart
distinct ways: and Wal-Mart technology
 New ways Stores, incentives and
is also
of Inc. leveraging respond the
producing competitor technology to rate of
goods and s its advantage technological
services  Technolog in supply and change for
 New ways y's impact distribution, remain in
of on product and online competitive
distributin offering sales market and No.
g goods  Impact on  It is equally 1 retailer.
and cost important for  The company
services Walmart. must boost its
structure
 New ways From online
of in
marketing to presence.
communic Discount, Online
customer
ating with Variety marketing and
service and
target Stores HR online selling
markets industry management increase
 Impact on as well as Walmart’s
value supply chain revenues.
chain management
structure everywhere
in the use of
Services technology has
sector become
 Rate of important for
effectiveness.
technologi
Whether it is
cal down its
diffusion supply chain
or inside the
stores,
everywhere
 Walmart is
investing in
technology to
serve the
customers
better and to
improve the
customers’
shopping
experience.
Information
technology
and Artificial
intelligence
have also
become key to
success in
retail.

2. Analyze the changing industry structure in which EACH Company is operating by using
Porter’s Five Forces Model. How did Company counter the changes and challenges of the
industry competitive forces in which Company is operating by using Porter’s Five Forces
Model?
Five Who They Are Level of Reasons Counter
Forces Threat/Barg (Strategies)
aining
Power
Threat of  groceries  Walmart By following
substitute  entertainment
Low sells a wide factors
products
 health and range of Walmart can
wellness – products, as tackle:
well as,
including
substitutes
pharmacy  By being
to this
 hard lines – products,
service
including therefore, oriented
stationery, auto the impact rather than
spares, of this just
and accessories particular product
 hardware threat to oriented.
 apparel Walmart can  By
be stated to understand
 home furnishings be
 household applia ing the
irrelevant.
nces core need
 The online of the
retailers
customer
pose some
challenge rather than
 but still they what the
are not able customer is
to offer buying.
prices  By
comparable
increasing
to Walmart
on all the the
products. switching
 Online cost for the
shopping customers.
does offer
the
convenience
where
customers
do not have
to pick the
product
from the
stores, the
products
they shop
for are home
delivered.
 So, while
customers
would like
to shop
online for
convenience
.
 The low
prices of
Walmart are
still
matchless.
 These
factors keep
the threat
from
substitute
products to
the
minimum.
Threat of  Moderate to high  The threat of By following
new cost of brand
Low new entrants factors
entrants development exerts Walmart can
 Low cost of doing medium tackle:
business pressure on
Walmart.
 Moderate capital  Because  By
costs Walmart is innovating
the largest new
among the products
retail brands and
and it would services,
require lots
New
of
investment products
to build a not only
brand like it. brings new
 Having a customers
distribution to the fold
system and but also
supply chain give old
like customer a
Walmart is reason to
even buy Wal-
difficult and Mart
can take Stores,
years to
Inc.‘s
build
products.
 Walmart’s
 By
financial
capital and building
other economies
resources of scale so
mitigate the that it can
risk from the lower the
new fixed cost
entrants. per unit.
 Walmart’s  Building
price capacities
advantage and
has helped it spending
gain a large
money on
market share
and this is research
also an and
important developme
factor that nt. New
deters the entrants
new players. are less
likely to
enter a
dynamic
industry
where the
established
 players
such as
Wal-Mart
Stores, Inc.
keep
defining
the
standards
regularly.
 It
significantl
y reduces
the
window of
extraordina
ry profits
for the new
firms thus
discourage
new
players in
the
industry.

Bargainin  P&G Moderate  Because of the By following

g power  Coca Cola diverse factors
of  Unilever product range Walmart can
suppliers that is
 PepsiCo distributed by
tackle:
 Emami retailers there
 By
 are
many different building
suppliers. efficient
 Suppliers supply
include both chain with
domestic and multiple
international suppliers.
manufacturers  By
and as the experiment
products are ing with
more or less product
standardized in designs
nature, retailers
using
and
wholesalers different
have low materials
switching costs so that if
 In order to the prices
ensure that go up of
retailers one raw
aren’t material
relying on then
any
company
particular
suppler,
can shift to
they buy another.
from a large  Developin
number of g dedicated
suppliers. suppliers
 Due to the whose
size and the business
scope of its depends
business, upon the
Walmart firm. One
secures the of the
lowest
lessons
prices from
its suppliers Wal-Mart
to sustain its Stores, Inc.
cost can learn
leadership from Wal-
competitive Mart and
advantage. Nike is
 Walmart how these
suppliers are companies
required to developed
comply with third party
a wide range manufactur
specific
ers whose
requirement
s related to business
employee solely
insurance, depends on
food safety, them thus
employee creating a
health and scenario
safety and where
others these third
party
manufactur
ers have
significantl
y less
bargaining
power
compare to
 Wal-Mart
and Nike.

Bargainin  Households  If the By following

g power  Retailers
Low products factors
of buyers are not Walmart can
differentia tackle:
ted then
buyers can  By
switch to building a
another large base
retailer as of
buyer customers.
seems to This will
be more be helpful
prices in two
sensitive. ways. It
 If the will reduce
products the
are similar bargaining
then the power of
buyer will the buyers
compare plus it will
the price provide an
among opportunit
suppliers y to the
which firm to
increases streamline
the its sales
competitio and
n and lead production
to lower process.
prices and  By rapidly
profits. innovating
 Wal-Mart new
offers a products.
wide range Customers
of often seek
products discounts
with the and
strategy of offerings
““Every on
Day Low established
Price”” products so
that appeal if Wal-
 to large Mart
audience Stores, Inc.
 Wal-Mart keep on
enjoys coming up
customer with new
loyalty products
even then it can
though limit the
there are
bargaining
low
switching power of
costs in the buyers.
retail  New
industry. products
Therefore, will also
there is reduce the
very low defection
pressure of existing
from the customers
customers’ of Wal-
side
Mart
Stores, Inc.
to its
competitor
s.

Intensity  Sears,  Among the By following

of  K Mart
Low three, Target factors
competiti  Target is the Walmart can
ve rivalry strongest, in tackle:
domestic
markets, it
 By
has grown
tremendousl
building a
y and sustainable
established a differentiat
niche for ion
itself.  By
 Sears and building
Kmart left scale so
behind. that it can
Sears could compete
not match better
the lower
 Collaborati
prices of
Wal-Mart.
ng with
competitor
 Kmart
failed to s to
 match the increase
customer the market
satisfaction size rather
standards of than just
Wal-Mart competing
(Turner
for small
2003). Its
sales are market.
approximate 
ly four times
the sales of
Kmart.
 Kmart’s
stores are
smaller than
Wal-Mart’s
discount
stores and
have only
half the sales
of Wal-Mart
stores.
 If Walmart
has the
upper hand
then it is
because of
its pricing
strategy.
 Target and
Costco are
important
contenders,
the other
brands do
not pose a
significant
competitive
threat before
Walmart.
 Kmart,
Sears, Best
Buy etc. are
not very
strong to
pose a
competitive
challenge
before the
 largest
retailer.
 In this way,
when it
comes to
competition
in the retail
industry,
Walmart is
the King.

3. You are also advised to conduct a strength, weaknesses, opportunities and threats (SWOT)
analysis for EACH Company and provide strategic suggestions based on analysis.
Identify Counter (Strategies)
Opportunities: Expanding brand portfolio:
 Wal-Mart offers
products under a
number of private
labels.
 The company plans to
increase is private label
portfolio.
 Wal-Mart incurs lower
operational costs on
these private labels.
Further, as private
brands are high-quality
low price alternatives to
national brands, they
have greater demand.
Increasing online sales:
 Online shopping has
steadily grown in
popularity in the US.
 In addition to physical
store operations, Wal-
Mart sells its
merchandise through
online portals.
Global Growth:
 Enter new markets and
form and cooperate with
other business in Europe
or the Greater China
Region.

Threats: Intense Competition:

  Wall–Mart is facing stiff
competition from
numerous of companies
in the retail market
worldwide including
Carrefour, Tesco,
Target, Home Depot,
Sears and local
companies.
 The company also faces
competition from
Internet based retailers
and catalog businesses.
Healthy lifestyle trend:
 It threatens Walmart’s
business because
many of the company’s
goods are not healthful,
organic or natural.
 Firm currently does not
prioritize healthful
products in its stores.
Small-scale/individual online
selling:
 Because of the Internet,
small sellers or
individuals can bypass
Walmart and use their
own websites to sell
products to online
consumers.
Increasing resistance from
local communities.
 According to one market
analysis report, says that
when Wal-Mart opens
new store to any
particular area, then
some local retailers are
usually forced to close
off their operations. Due
to this circumstance
Wal-Mart faces strict
resistance from
communities and
retailers which is
becoming more difficult
for Wal-Mart to open
new stores
Strength: Market Capitalization:
 Wal-Mart has market
cap of 208.37 billion US
dollars which is the
highest in discount
variety stores industry.
 It is also a chance for
 This makes Wal-Mart a
mega cap company and
financially very sound
and very attractive for
investors.
Human Resource Capital:
 The policy of sharing
stocks and profits with
its employees is another
important strength
which distinguishes it
from other
organizations.  But doing online
Technology:
 IT also supports Wal-
Mart’s efficient
procurement.
 A website has allowed
for increased sales all
over the world.
Customer oriented approach:
 It has a reputation for
value for money,
convenience and a wide
range of products all in
one store.
 It allows SAM’s club
members to buy in bulk.
 This trend can only be
strengthened by
rapidly advancing
mobile technology
accessibility.
Walmart. The
company, in order to
take advantage of
emerging new means
of distribution, needs
to carefully utilize its
retail intelligence to
lock in their target
audience with better
marketing efforts and
user-friendly services.
business comes with
challenges. One of
them is being able to
deliver orders fast
while maintaining the
quality and freshness
of food. Many smaller
businesses struggle
with this issue and
Walmart, using their
extensive experience
in technology and
optimization of
logistics can outpace
them easily.

Weakness: Exit from South-Korean and

German markets:
 Wal-Mart had to exit
from the South-Korean
market because of its
inability to cater to the
taste of the local
consumers, slowness in
opening more retail
outlets and inability to
compete with
 aggressive Korean
discounters.
Product Recall:
 Wal-Mart was involved
in several product
recalls lately like
‘Holiday Times’
Candle Holders, ‘Hip
Charms’ Key Chains,
etc.
Numerous Legal Issues:
 Suit which alleged it of
showing gender
discrimination at the
time of promotions,
pay, training and job
assignments. Such
proceedings may
adversely affect
employees’ perception
about the company
Unmanageable product range:

4. How is the Company using its resources and capabilities to get competitive advantage and
why is it so successful in it?
Resources and capabilities of Walmart:

 Global Brand Recognition and Equity:

Apart from being the biggest and most famous retail brand of US, Walmart is also famous worldwide as
a retail brand that helps you save money. Its everyday low prices have made it the most famous retail
brand and helped it attain the status of a brand that is obsessed with low prices and customer service.

 Large size and global presence:

Walmart is there in total 28 nations globally operating under 65 banners. Its total number of
stores in 2018 has reached 11718 of which 6360 are outside US. To further improve its position
in Asia Pacific, it acquired around 70% stake in Indian e-commerce brand Flip kart. The brand
has its more than 100,000 suppliers located all around the world and it has formed great
relationships with its suppliers that provide standard quality products.

 Low prices & large assortment of products:

 Leveraging technology:

Walmart is leveraging the power of technology for faster growth. Its e-commerce segment has
seen fast growth in sales. Apart from it, the brand is investing in other technological tools to
provide its customers with a fantastic inshore experience. Its store assistant app and Walmart Pay
App make it easier and more convenient to shop inside a store.

 Human Resources & Organisational culture:

The number of associates employed by Walmart is 2.3 million of which 1.5 million are
employed in America. Its organization culture has taken a shift during the recent years. It is
known to be obsessed with customer experience and customer service. However, in the recent
years, it has started focusing on HR management and apart from increasing wages, it also
introduced several training and development programs as well as important benefits for its
employees.

 Customer loyalty:

Walmart has a very large base of loyal customers. It has built its customer loyalty through its
competitive pricing strategy and excellent customer service.

5. What are Key Success Factors?

Ans:
 A supply chain with integrated technology
 An ability to generate large sales volume (economies of scale)
 Every Day Low Prices
 Superior logistics systems
 Decentralized operations
 A strong and unique culture (in U.S.)

6. Describe Company Business strategy

Ans:

 Walmart business strategy is based on ‘everyday low prices’ philosophy of the company.
 Walmart pursues cost leadership business strategy enabled by the economies of scale
derived by the company in a significant extent.
 An efficient utilization of online sales channel contributes to the level of cost-efficiency
of retail operations and about 75 percent of walmart.com sales come from non-store
inventory.
 To “Invest To Differentiate On Access”
 Improve the shopper’s accessibility to physical stores
 User friendly online shopping platforms for anytime convenient shopping
 Provide high end difficult to access services under one roof
 “Be competitive on assortment”
 “Deliver a great experience”
 Mission “to provide a wide variety of high quality, branded and unbranded products at
the lowest possible price”
  Allowed to achieve a large scale and an efficient supply chain.
 Has its own low-cost brands, like Great Value.
 A unique cost structure that allows Walmart to establish the lowest prices and achieve
competitive advantage. (best value/price combination )
 Present in many different industries and markets with efficient distribution channels
 . Very difficult strategy to imitate by offering a broad quantity of products at a low price.

In simple terms, Walmart strives to offer the widest choice of products for the cheapest
price, along with giving customers the opportunity of choosing the most convenient channel
to facilitate the purchase.

7. Who are Company’s competitors?

Ans:
 Amazon.
 Whole foods market.
 Amazon.
 Ali Baba.
 Home Depot.
 IKEA.
 Costco.
 Lowe’s.
 ALDI.
 7 Eleven.
 Target.
 Tesco.
 Kroger.
 Dollar General.
 Price Smart.
 Sears holding corporation.

8. How does Wal-Mart maintain its renowned corporate culture?

Ans: With over 7000 stores, 120 distribution centers and 2 million employees around the world
maintaining its culture is a big challenge. The company will open over 500 new stores in 14 countries this
year. It is estimated that 75% of management positions today are filled via internal promotions which
leaves 25% of them filled with leaders hired from outside the company. Maintaining its culture with so
many new stores, new managers, turnover of employees and new employees is a staggering challenge!
Wal-Mart is the largest retailer in the world with sales exceeding $375 billion USD annually. The leadership
teachings of Sam Walton were important 40 years ago at Wal-Mart, and they are still important today.
Contrary to media reports, current company leaders still believe that people are the key to the success of
the company!

9. Are the challenges that Wal-Mart faces today similar to previous?

Ans: Because of the sheer size of the company Wal-Mart’s executives face daunting challenges today that
have never been faced by a leadership team at any company before. In terms of people and serving
customers the challenges are even more complex. There is even greater pressure today to control costs.
The number of cash registers open and the number of employees on the floor has been reduced. Leaders
are forced to step up to higher levels of responsibility without the prerequisite experience these bigger
jobs demand. Retailing is all about people and somehow the people at Wal-Mart continue to figure out
how to get the “24/7/365 job” done with less resources, and more work than ever before!

10. What are Key Issues?

Ans:

 Slow growth compared to past, losing brand value because of multiple reasons such as
Single strategic approach as one strategy never fits all needs.
 Poor quality services & products.
 Losing market share to competitors.
 Losing trust because of Law suits filed on unfair labour practices such as low wages, sex
discrimination in pay, promotion and compensation, violation of child labour laws, sexual
harassment.
 High criticism on supplier relationships.
 Opposition to expansion plans in smaller neighbourhoods from local retailers &
customers.
 The major problem Wal-Mart is facing right now seems to be their single strategic
approach.

11. Identify type’s value chain activities of Company’s?

Ans:

Primary Activities:

Inbound Logistics:
  Wal-Mart has their own warehouses to store the goods.
 They bought in volume at attractive prices.
 They are buying branded products.
 80% of purchases were shipped from its own 27 distribution centers.
 They applied the technique known as “cross-platform” to transfer goods directly from vehicle to
vehicle entrance to the store.
 They created an “EDI (electronic data interchange)” system for 90% of its suppliers.
 They issued electronic invoices.
 They urged the exchange of information with suppliers.
 They used “VMI (Vendor Managed Inventory)” system.

Operations:
The range of Walmart’s business operations includes supercentres, supermarkets, hypermarkets,
warehouse clubs, including Sam’s Clubs, cash & carry, home improvement, specialty electronics,
restaurants, apparel stores, drug stores and convenience stores, as well as digital retail.

Walmart operations are divided into the following three reportable segments:

1. Walmart US. The largest operating segment comprises three primary store formats, as
well as digital retail in all 50 states in the United States. About 60 per cent of the total net
sales was generated in this segment in 2015.

2. Walmart International. This segment comprises Walmart’s retail, wholesale and other
business operations in 26 countries outside of the US. Approximately, 28 per cent of the
total net sales in 2015 was generated by Walmart International. This segment grows
primarily via acquisitions of other businesses.

3. Sam’s Club. Consisting of membership-only warehouse clubs, Sam’s Club operates in 48

states in the U.S. Membership income as the largest source of revenue of this segment and
the segment contributed to about 12 per cent of the total Walmart revenues in fiscal year
of 2015.

Outbound Logistics:

 Walmart’s inventory management technique is a supply chain practice called cross docking.
 The products received from the suppliers are cross docked at the distribution centers and then
forwarded to the stores.
 This keeps the inventory and transportation costs low and cuts down on the time needed for
transportation and thus eliminates inefficiencies.
 Walmart stores are immediately replenished without having to wait for long periods.
  The goods replenishment process originated at the point of sale information transmitted via
satellite.
 This has reduced the costs for Walmart and the benefits can be passed on to the customers.
 Its more than 150 distribution centers are the hub of activity for its business.
 These distribution centers serve the stores, clubs and deliver to the customers directly.

Marketing and sales:

 Walmart’s slogan is “Save money. Live better”.

 Its pricing strategy is one of the key elements of its marketing strategy.
 The everyday low prices strategy has helped it build a reputation of the best price retailer.
 Walmart also spends billions on marketing.
 It advertises and promotes its brand and deals through several advertising channels including
traditional and digital channels.
 From promotional videos to social media, Walmart uses them all for the promotion of its brands.
 Customer service is also a key part of its strategy that helps create a positive brand image and better
reputation.
 They were given to all its customers a satisfaction guarantee policy.

Service:

 When a customer came an associate welcomed him and gave him a cart to the goods.
 Sales were self-service.
 The majority of sales is made in cash but could pay by card.
 Members of Sam’s club membership.
 Supercentres had 30 cash registers.
 Offering a policy of “satisfaction guaranteed” could be returned merchandise to any store
without any question was asked.

Support activities:

Infrastructure:
 Glass President and CEO spoke to all employees via satellite from the company since it was
impossible to visit all the stores in the year.
 The inventory was financed by accounts payable.
 Close connection between headquarter and local stores.

Human Resource Management:

 Wal-Mart supercentre had about 450 partners and personally.

 Wal-Mart associates employed 528,000 full or part time.
  Ideas and information is shared.
 Management seminars offered at the distribution centres.
 All new partners received training.
 A culture of respect for the employee was begun, considered “associated”
 His associates were motivated by more responsibilities and recognition unlike their
counterparts in other retail chains.
 The company was not unionized, which evidenced that there was no labour discomfort.
 30% of its staff worked part-time. They had an open door policy with partners.

Technology development:

 They installed a satellite system that allowed collect and analyse sales data daily.
 Electronic scanning code standardization of products at the point of sale.
 The associated units were using manual barcode scanning to mark the price of
commodities.
 These scanners, which used radio frequency technology, communicated with the
computerized inventory of the store to ensure the exact price and improve efficiency.
 From smarter apps for inventory management to ecommerce websites it has used
technology to gain efficiency.
 A number of technological tools are used to keep the managers updated and the stores
well supplied.

Procurement:

 It has managed strategic relationships with its suppliers to keep costs of material lower.
 These suppliers provide standard products and services as mentioned in the suppliers’
code
 Wal-Mart deals directly with manufacturers, by passing all intermediaries.
 They use EDI: Electronic data interchange.

12. What is sustainable competitive advantage for Walmart?

Ans: Wal-Mart’s sustainable competitive advantage can be attributed to its cost advantage supported
by its ‘inventory management skills and processes’ and expertise in ‘supply chain management’ (which
cannot be replicated considering the scale of operations) and its culture which promotes aggressive
customer service and satisfaction through satisfied and happy associates. The ability to build and maintain
relationships with its customers, suppliers, and its associates and its speed in innovation and initiative
ness is also a source of sustainable competitive advantage.

13. What are four specific criteria of sustainable competitive advantage Company’s?
Ans:

Valuable

 Wal-Mart’s skills in developing and using POP data collection to control inventory
  Long-term relationship with vendors

Rare Capabilities

 For years, Wal-Mart’s POP system was rare

 Ability to allure customers by lowest costs

Costly to Imitate

 Wal-Mart’s shorter value chain compared to its competitors

 Brand Value

Non-Substitutable

 If Wal-Mart continues to expand and sustain sales, there should be no fear of direct
substitution in near future.

14. Do VRIN Analysis:

Ans:
Valuable Rare Difficult to N0-Substitute
Imitate
Information Yes Yes No Yes
Technology
System
Distribution Yes Yes Yes No
System
Strong Pricing Yes No Yes Yes
philosophy and
Everyday Low
price
Strong Culture Yes Yes Yes Yes
Ability to Yes No No Yes
generate large
sales volume
Superior logistic Yes Yes Yes Yes
system
Human Yes Yes Yes No
Resource
Operational Yes Yes Yes No
Decentralization