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Wal-Mart Stores Strategic Audit Team Presentation

Wal-Mart Stores Strategic Audit Team Presentation. Columbia College Jessica Kauten, Siveicea Love-Guarganious, William Montague, Scott Randall, Marchelle Robinson, and Judith Rosado Strategic Management 479 Alexander Furla. Current Situation. Current Performance

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Wal-Mart Stores Strategic Audit Team Presentation

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  1. Wal-Mart StoresStrategic Audit Team Presentation Columbia College Jessica Kauten, Siveicea Love-Guarganious, William Montague, Scott Randall, Marchelle Robinson, and Judith Rosado Strategic Management 479 Alexander Furla

  2. Current Situation Current Performance • Divided in 3 Business Segments: Wal-Mart Stores, Sam's Club, and the International Division. • Largest Company with $245 billion in sales. • $11.2 billion net income, up 9.4% to $2.68 per share. • Stock price of $46.11. • Over 6,100 stores worldwide.

  3. Strategic Management Board of Directors • 13 members, 4 affiliated, 9 independent, 3 women, 2 African Americans, 2 Hispanic Americans. • S. Robson Walton, Chairman of the Board.

  4. External EnvironmentSWOT Analysis Natural Environment • Raw materials availability. (O) • Land availability. (O) • Electricity usage. (T) • Oil and Gas usage. (T) • Water scarcity.(T) • Hazardous waste storage, transportation and disposal. (T)

  5. External Environment Societal Economy Economic • Interest rate increases (T). • Economic deterioration (T) • Increasing commodity costs. (T) • Increasing transportation costs. (T) • Currency fluctuations. (T) • Slow national economy. (T) Technology • Usage of RFID (O) • Internet presence (O) • IT increasingly important. (O)

  6. External Environment Political-Legal • Regional trade pacts making free trade available (O) • Differing laws may evoke compliance issues. (T) • Potential unionization of workforce. (T) • Many legal proceedings. (T) • Defendant in numerous cases containing class action allegations (T)

  7. External Environment Socio-cultural • Aging U.S. demographics. (O) • Slowing U.S. population growth. (T) • Wal-Mart seen as a reason for closing of mom and pop stores. (T) • International cultural differences. (T) • Green environmental movement. (O) Task Environment • United States market saturation. (T) • Expansion into Europe, China, South America, Canada, and Mexico. (O) • Rivalry High. Target, Sears, K-Mart (T) • Chance of new entrants low. (O) • Purchasing power high. (O) • Substitute power high. (T) • Government regulations power medium. (T)

  8. Internal Environment Corporate Culture • In-depth employee involvement in company affairs. (S) • Trained employees to be merchants. (S) • Reflection of the founder’s values. (S) • Conservative values create some problems through expansion. (W) • Non-Union stance is viewed unfavorably is some areas. (W) Corporate Resources Marketing • Advertising costs are expensed as incurred. (S) • Advertising costs consist primarily of print and television advertisements. (S) • Offers quality brand names at lower-than-competitive prices. (S) • Introduced a “Value Plan” benefits plan to its employees. (S) • Green marketing products better for environment. (S)

  9. Internal Environment Finance • $312.6 billion in annual sales. (S) • $11.2 billion net income. (S) • $2.68 earnings per share. (S) • 8.9% return on assets. (S) • 11.4% increase in sales and operating income for the international business. (S)

  10. Internal Environment R&D • More involved with the development side. (W) • Focused on expansion and development. (W) Operations • Wal-Mart USA - intent on driving comparative store (S) • Sam’s Club - remain committed to serving the needs of our members (S) • Wal-Mart International - approach to ensuring continued profitable growth. (S)

  11. Internal Environment Human Resources • Employees are called associates. (S) • Employee stock ownership and profit-sharing program. (S) • Decentralized approach to retail management development. (S) • Utilizes the Total Quality Management approach. (S) • Discourages unionization. (W) Information Systems • Leader in RFID technology. (S) • Good internet presence. (S) • Utilizes satellite communications, data centers, and handheld devices. (S)

  12. Analysis of Strategic Factors Situational Analysis Strengths • International brand name. • Financial position. • Market leadership. Weaknesses • Market saturation. • Public opinion. • Adjustment to cultural differences after entering a foreign market. • Supplier alienation. • Past employee discrimination. • Employee health benefits. • International supplier employee violations.

  13. Analysis of Strategic Factors Opportunities • International expansion. • Environmental leadership. • Worker’s rights leadership. • Community involvement. • Social initiatives. Threats • Strong U.S. competition. • Changing demographics. • Economic uncertainty. • Current litigation. • Employee unionization.

  14. Strategic Alternatives and Recommended Strategy • Adopt a friendlier corporate attitude and image • Pro. Improved customer service • Pro. Business growth • Pro. Stronger relationships • Con.Negative image • Con.Wrong impression from local owned retailers (Parnell, 2008). • Ease into foreign and domestic markets instead of barging in • Pro.Positive corporate image by not devouring every business in sight. • Pro. Creates an image with integrity • Pro. Customer loyalty • Pro. Increase friendlier competition • Con. Creates ill-will among smaller businesses • Con. Viewed as a bully corporation

  15. Strategic Alternatives and Recommended Strategy • Expansion • Pro.New source of tax revenue for the community • Pro. Creates more jobs • Pro. Promotes community expansion • Pro. Opportunities for employee growth • Con. Associates receive unjust wages due lower cost products • Con. Purchasing practices require manufacture of goods in third world countries • Con. Reduces the value on competing businesses

  16. Implementation • To implementing and developing ways to appease who oppose to new constructions. • To implement and get involved with developing a way to ensure employees are getting the right benefits to mirror retail industry’s average worker. • To implementing and establish committees that can perform thorough research.

  17. Evaluation and Control Determine what to measure Establish predetermine standards Measure performance Take corrective action if previous answer is NO Does the performance match standards? Yes or no?

  18. Works Cited Wheelen, Thomas L., and J. David Hunger.  Strategic Management and Business Policy: Achieving Sustainability.  Upper Saddle River: Prentice, 2010. Print

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