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
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.
Strategic Management Board of Directors • 13 members, 4 affiliated, 9 independent, 3 women, 2African Americans, 2 Hispanic Americans. • S. Robson Walton, Chairman of the Board.
External EnvironmentSWOT Analysis Natural Environment • Raw materials availability. • Land availability. • Electricity usage. • Oil and Gas usage. • Water scarcity. • Hazardous waste storage, transportation and disposal.
External Environment Societal Economy Economic • Interest rate increases (T). • Economic deterioration (O) • Increasing commodity costs. (T) • Increasing transportation costs. (T) • Currency fluctuations. (T) Technology • Usage of RFID (O) • Internet presence (O) • Information technology increasingly important. (O)
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)
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)
Internal Environment Corporate Culture • In-depth employee involvement in company affairs. (S) • Trained employees to be merchants by being responsible for the performance of their own departments. (S) • Reflection of the founder’s values. (S) • Conservative values create some problems when expanding to larger cities. (W) • Non-Union stance is viewed unfavorably is some areas. (W) Corporate Resources Marketing • Advertising costs are expensed as incurred and were $1.6 billion in 2006. Advertising costs consist primarily of print and television advertisements.
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)
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)
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)
Analysis of Strategic Factors 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.
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.