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Transcript of Walmart Case
STRATEGIES OBJECTIVES OUTPUT EXPECTED ACTUAL CONGRUENCE MODEL ANALYSIS Star Model Analysis STRATEGY STRUCTURE PROCESS & LATERAL CAPABILITY REWARD SYSTEMS PEOPLE PRACTICES CASE QUESTIONS Market
Over 90% of American Households are within 15 miles of a Wal-mart store.
Have around 30% market share in many of the US products
Global sales and suppliers
Market power to dictate to suppliers
Against labor unions
Largest retailer (larger than 6 closest competitors combined)
Highly criticized by special interests Human: 1.8 million employees
Technology: Heavily invest in logistic tracking systems.
Capital: Fleet of shipping trucks, strategically placed distribution centers, over 2000 Supercenters and expanding into smaller stores.
Other: Number 1 customer to many suppliers First Wal-Mart opened in 1962
Always Low Prices. ALWAYS.
Culture developed into looking to save every penny (both in Wal-mart and through suppliers)
Very secretive and closed organization
Since the 1990s: builds more story and enters grocery industry
Since 2010: Wal-mart gets more money from international markets Win customers by always having the lowest prices in the world. Decrease costs in all areas (salaries, suppliers, equipment, etc)
Very efficient logistics operation
Improve PR Supplier managers that work very closely with suppliers
IT system to track and organize shipping products
Purchasing products on a global, not market, scale (create private label)
Green initive Get and maintain lowest prices and costs
Get more customers
Enter international markets Successfully enter new international markets?
Adapt Wal-mart model to other countries' needs?
Reposition itself as an economy builder as opposed to a destroyer? Operations (value chain)
Regional market structures
Smaller stores Founder - Sam Walton
CEO - Doug McMillon
Head of Wal-mart US - Bill Simon
Traits need to work at Wal-mart
Work closely with suppliers
Hard working, willing (or forced) to put extra hours in without extra pay
Always looking for a cheap deal Cut costs!!! Increase international revenues
Be the number 1 lowest priced retailer
Try different store types
Change public image Vision
Always Low Prices, ALWAYS
Competitive logistical system
Market power of supplers Organizational Roles
Staff work closely with suppliers to find way to cut costs even lower Lateral Capability
Able to move information and make decisions relatively quickly Type Stuff Type Stuff "We save people money, so they can live better."
Sell products to consumers What is the mission? “We save people money so they can live better.” What is the strategy? "Always low prices. Always." What is the value proposition? "Always low prices. Always." Wal-Mart pays modestly
Illegal immigrants, lock its employees inside some stores overnight, lock its employees inside some stores overnight
Wal-Mart is brutally competitive, but it is not technically predatory. It does not exploit customers after it has driven competition out of town.
The Vlasic pickle
The market didn’t create the $2.97 gallon of pickles, nor did waning consumer demand or a wild abundance of cucumbers. Wal-Mart created the $2.97 gallon jar of pickles. What has been and still is its strategic focus? “We save people money so they can live better.” What are the key business functions that provide supporting strategies to the focus(es) you identified? What lateral processes and capabilities support its objectives? What do you predict will be Wal-Mart’s global structure in five years from today? Force suppliers to cut costs
Keep salaries low by unethical practices
Manufacture in questionable environments
Encourage innovation in cutting costs (value chain, etc. Some success in different markets
Market power gives strength here
Becoming more open