Dr. Eva Dodd-Walker
Business Strategy
Business Strategy
MBA6611 Case Analysis—Paper Template
Instructions:
1. SPACING: The assignment should be double-spaced. The “Reference” section should
be single-spaced with double spacing between entries.
2. FONT SIZE: Use Times Roman 12-point font.
3. FORMAT: Number all pages (bottom of page), and indent new paragraphs 5 spaces.
Use the APA writing style to properly cite and reference all research
material.
4. LENGTH:
The body of the paper (Introduction to Conclusion) cannot exceed 30
pages.
5. RESEARCH:
Effective research references many sources. (Use sources less than or
equal to 10 years old.) Some basic references include the following:
a.
b.
c.
d.
Your textbook
Finance.yahoo.com and MSNmoney.com
Hoovers.com
Company Profile and Industry Profile:
Business Source Premier (Enhanced)
Datamonitor reports from Troy’s electronic databases
(http://library.troy.edu/databases_business.html)
e. The company’s website
f. Small Business Administration (www.sba.gov)
g. Wikipedia’s references or sources (NOT Wikipedia)
6. INSTRUCTION PAGE: You must delete the instruction page; that is, the title page is
the first page of the report.
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COMPANY NAME
(Case Analysis)
Group #–Section #
Specialist A
Specialist B
Specialist C
Specialist D
Specialist E
Specialist F
Presentation Date
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Business Strategy
SPECIALIST ASSIGNMENT
Introduction………………………………………………………………………..Specialist #1
Question 1………………………………………………………………………….Specialist #1
Question 2 (Financial Matrices)……………………………………….………….Specialist #2
Question 3………………………………………………………………………….Specialist #3
Question 4………………………………………………………………………….Specialist #4
Question 5 (SWOT & GS Matrices)……………………………………..……….Specialist #5
Question 6a&b………………………………………….………………………….Specialist #5
Question 6c (Pro forma Statements).…………………………..………………….Specialist #6
Question 7………………………………………………………………………….Specialist #6
Update & Conclusion…………………………………………….……………….Specialist #6
INTRODUCTION
State your intentions/plans for the paper. Give an overview of the paper, and indicate
the year of your case. You should provide a brief company history as well as an industry
summary. The industry analysis should include a discussion of the industry’s total revenue,
compound annual growth rate, major product categories, and competitors. (The CAGR is
needed to position the company in the Grand Strategy Matrix.)
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Business Strategy
CASE ANALYSIS
Question 1:
Identify the firm’s apparent current mission. Then briefly review the firm’s
current objectives and strategies. [Please note that you must evaluate the
firm’s mission statement.]
Mission Statement:
Mission Statement Evaluation:
Component
1
2
3
4
5
6
Company
Company Objectives:
Company Strategies:
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7
8
9
Question 2:
Dr. Eva Dodd-Walker
Business Strategy
How would you describe the firm’s current financial condition? [Use
financial ratios and other pertinent income and balance sheet data to support
your analysis.]
Historical Financial Analysis: [You must explain the trends in each of the five
categories—liquidity ratios, asset utilization ratios, leverage ratios,
profitability ratios, and market ratios. Use the end points for your assessment
of the period.]
Competitor Financial Analysis: [You must explain your company’s positioning in each of
the five categories—liquidity ratios, asset utilization ratios, leverage ratios,
profitability ratios, and market ratios.]
Overall Financial Health or Evaluation:
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Question 3:
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Business Strategy
Outline and discuss the firm’s external opportunities and threats, using any
analytical model(s) you believe are relevant.
[You must analyze the General Environment, Industry Environment, and the firm’s strategic
group to determine this information.]
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Question 4:
Dr. Eva Dodd-Walker
Business Strategy
Outline and discuss the firm’s internal strengths and weaknesses using any
analytical model(s) you believe are relevant.
[Strengths and weaknesses will include information from the financial analysis.]
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Business Strategy
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Dr. Eva Dodd-Walker
Business Strategy
WALMART STORES, INC.
(Case Analysis)
Group 2–Section #2
Xuyen Nguyen
Hoa Hoang
Libra Byrd
Presentation Date: November 27, 2018
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SPECIALIST ASSIGNMENT
Introduction…………………………………………………………………Hoa Hoang
Question 1 ….………………………………………………………………Hoa Hoang
Question 2….………………………………………………………………. Libra Byrd
Question 3….……………………………………………………………… Xuyen Nguyen
Question 4….……………………………………………………………… Xuyen Nguyen
Question 5….……………………………………………………….……… Xuyen Nguyen
Question 6a&b….……………………………………………….….……… Hoa Hoang
Question 6c (Pro forma statement) ………………………………………… Libra Byrd
Question 7….…………………………………………………….…….…… Libra Byrd
Update & conclusion….…………………………………………………… Hoa Hoang
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Introduction
This paper takes close analysis about business strategy of Walmart Stores, Inc., headquartered in
Bentonville, Arkansas, U.S. We will evaluate the company’s mission, SWOT as well as financial
condition with analytical methods to identify the questions in the current operations, financial
health and recommend the suitable business strategy and specific actions needed to help the firm
reach its goals. The fiscal year ending January 31, 2018.
Company overview
Walmart Stores Inc. (Walmart) is one of the leading retailers worldwide offering a thousand of
products including grocery and consumables, health and wellness, technology, office and
entertainment, hardline, apparel and home categories. The company also offers other fuel and
financial services such as money orders, prepaid cards, wire transfers, money transfers, check
cashing, and bill payments. The private labels and licensed brand names of Walmart includes No
boundaries, Equate, Everstart, Faded Glory, George, My life As, Onn, Kid Connection, Hyper
Touch, Way to Celebrate. From a small retailer, Walmart has open a thousands of stores in U.S
and expanded internationally, over 11,200 stores under 55 banners in 27 countries and
eCommerce websites in 10 countries with 2.3 million employees over the world – 1.5 million
employees in U.S. They merchandise and distribute products through variety of formats
including the supermarkets, supercenters, discount stores, neighborhood markets, warehouse
clubs and cash & carry outlets. Walmart classified its business operation into Walmart U.S,
Walmart International, Sam’s Club. The cornerstone of Walmart’s strategy is everyday low price
(EDLP), the price focus has never been stronger. (Walmart Report 2018)
In FY2018, the company’s revenue is US$599,343 million, increase 3% over FY2017, operating
margin was 3.5%, decrease 25% against FY2017, get recorded net margin of 2%, go down 28%
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Business Strategy
against FY2017. (Walmart annual report 2018).
Here are some outstanding milestones of Walmart’s history:
✓ In 1945: the founder Sam M. Walton opened a franchise Ben Franklin variety store in
Newport, Arkansas. One year later, his brother, James L. Walton, opened a similar store in
Versailles, Missouri. In 1962, Sam Walton opened his first discount store in Rogers,
Arkansas. In 1969, Walmart was incorporated in Delaware. (Walmart Annual Report 2018)
✓ In 1972: The company was listed on the New York Stock Exchange. The company opened
Sam’s Wholesale Club in 1983, its first supercenter in 1988, its first Neighborhood Market in
1998. (Form 10K Walmart report, 2018).
✓ In 1990: Walmart is the nation’s No. 1 retailer. As the Walmart Supercenter redefines
convenience and one-stop shopping, Everyday Low Prices goes international. (Our History.
(n.d.). Retrieved December 4, 2018, from https://corporate.walmart.com/our-story/ourhistory)
✓ In 2000, Walmart.com is founded, allowing U.S. customers to shop online. Walmart tops the
Fortune 500 ranking of America’s largest companies in 2002. (Our History. (n.d.). Retrieved
December 4, 2018, from https://corporate.walmart.com/our-story/our-history)
✓ In 2005: Walmart reported the revenue of US$312.4 billion, over 6,200 facilities in the world
– including 3,800 stores in U.S, employing 1.6 million associates. Walmart takes a leading
role in disaster relief, contributing $18 million and 2,450 truckloads of supplies to victims of
hurricanes Katrina and Rita. (Our History. (n.d.). Retrieved December 4, 2018, from
https://corporate.walmart.com/our-story/our-history)
✓ In 2007: Walmart change the slogan from “Always Low Price, Always” into “Save money.
Live better”. One year later, they change the company’s logo by spark symbol that resembles
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a sunburst, flower. Walmart exceeds $400 billion in annual sales for the first time in 2009.
(Our History. (n.d.). Retrieved December 4, 2018, from https://corporate.walmart.com/ourstory/our-history)
✓ In 2011: Walmart acquired 51% in Massmart in South Africa, Walmart surpasses 10,000
retail units around the world.
✓ In 2015: The company employs 2.3 million associates worldwide and serves more than 200
million customers each week at more than 11,000 stores in 27 countries. (Our History. (n.d.).
Retrieved December 4, 2018, from https://corporate.walmart.com/our-story/our-history)
✓ In 2016: Walmart sold its 41 formers Walmart express stores in US to Dollar General.
Walmart Pay, a fast, easy and secure way for customers to make purchases with their
smartphones, was introduced. (Walmart Annual Report 2018)
✓ In 2017: Walmart launches free two-day shipping on more than 2 million items, no
membership required. At the same time, the company announced its plans to offer same-day
delivery of fresh and frozen food, including other wares, to the US. (Walmart Annual Report
2018)
✓ In February 2018: The company changes its legal name from Wal-Mart Stores, Inc. to
Walmart Inc. (Walmart Annual Report 2018)
Industrial environment
The retail industry is the selling of consumer goods or services to end buyer. It is estimated
that 2/3rd of U.S GDP comes from the retail industry. Retail sales were $5.3 trillion in the
United States in 2015, a growth of 2% over 2014 (Duncan, 2015). Walmart is not only the
largest global retailer but one of the largest companies in the world. Other major brands
dominating segments of the retail market include Costco, Home Depot, Target, CVS, and
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Lowe’s. (Retail Industrial Analysis 2018)
CASE ANALYSIS
Mission statement
Walmart’s mission is “To save people money, so they can live better” (Walmart, 2017)
Mission statement evaluation:
1
2
3
4
5
6
7
8
9
Component
Customer
Product
Market
Technology
Profitability
Philosophy
Selfconcept
Public
image
Employee
Mission
Statement
YES
–
–
–
–
YES
YES
–
–
Walmart’s mission statement is very concise, provide a short meaning on customer and
self-concept, with 3 components out of 9 components (David, 2005), makes the score 3/9.
This mission statement is followed through the cost leadership generic strategy (Porter’s
model). It presents the strategy of low selling price to attract customers who will spend less
money in consuming goods or service in Walmart, they will get their lives better. This is also
a method that the company gains a competitive advantage through cost control.
Company objectives
Walmart pursues four key objectives to serve customers however they want to shop by: (1)
making every day easier for them; (2) changing how Walmart works to become more
efficient; (3) delivering results and operating with discipline while making critical
investments; and (4) being the most trusted retailer. (Walmart Annual report 2018)
Company strategies
As the message from the mission statement, Walmart focus on low price, the strategy they are
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applying is cost leadership. They use slogan “everyday low cost” to commit to offering the
customers the lower cost than other’s competitor anytime, anywhere.
Walmart does not supply only food product, but also others such as financial services, fuel,
entertainment. They apply horizontal diversification to help customer get one-stop shopping
experience.
Walmart Financial Analysis
The following Walmart financial statement shows the current financial conditions and
comparisons along with two of its major competitors. The financial ratios from 2016 to 2018,
calculating the performance in five categories: liquidity ratios, asset utilization ratios, leverage
ratios, profitability ratios, and market ratios.
Liquidity Ratios
Historical Financial
Evaluation
Negative
Competitive Evaluation
Weakness
Assets Utilization
Positive
Weakness
Debt Management
Profitability
Ratios
Market Ratios
Negative
Strength
Strength(Margins)
Weakness (Returns)
Strength
Positive
Positive
Historical Financial Analysis
Liquidity Ratios
The current ratio as well as the quick ratio for Walmart is higher than its competitors, which is
setting a negative trend in liquidity ratio. Walmart need to decrease its current liabilities in
relations to current assets.
Asset Utilization: The turnover remained a positive increase and maintained a positive increase
in accounts receivable during 2017, although productivity needs to improvement in assets.
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Leverage Ratios: Although there is a negative trend for Walmart in debt ratio EBIT, it is a
strength over its competitors. The debt ratio had a small 1% increase, but they are still at a 10%
weakness in comparison to their top competitor Costco. Over the past three years, Walmart’s
Interest Times Earning (TIE) shows a positive trend decreasing its interest by .09%.
Profitability Ratios: ROA shows a negative downfall every year by 2.58% within the past three
years. Although there was a slight increase on ROE from 2017 to 2018 by 4.84%, the returns are
still weak. Profit margin are strong, making it a strength in competitive evaluation. This positive
increase means they are moving in a positive trend to improve their finances.
Market Ratios: Walmart P/E is higher than its competitor leading them in a positive trend.
There’s no need for improvement in this area.
Competitor Financial Analysis
Two key competitors for Walmart are Costco Wholesale Corporation and Target Corporation.
The discussion will be focusing on comparison to Costco using the same five categories as in
relations to Walmart.
Liquidity Ratios: Costco Wholesale Corporation had a higher debt ratio and well as quick ratio,
therefore making Walmart weak to its competitor.
Asset Utilization Ratios: Costco inventory turnover was higher than to Walmart’s by 1.39%.
Walmart is selling products faster, but Costso is selling at a higher speed in quantity.
Leverage Ratios: Walmart has a debt ratio of 0.6% which is lower than Costco’s 0.68%. Costco
still maintain a higher control over Walmart in debt management, but this debt makes it a
strength for Walmart. For three consecutive years (2018, 2016, and 2016) Walmart TIE is
negative, but a positive against its competitor Costco and a weakness for Target.
Profitability Ratios: Target has a 4.01% Profit margin in comparison to Walmart’s 3.00%.
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Walmart had 5.00% Operating Margin, which is greater than Costco’s 3.15%. This allows a
strength for Walmart to sell more products at lower price and a faster rate.
Market Ratio: Competitors Costco and Target are in no competition in this area against
Walmart. Walmart’s Price per earning are higher than both competitors, showing a strength in
market ratios.
Recommended strategy
Based on the financial analysis, we suggest Walmart try to increase its competitive advantage.
This could be done by reducing the number of expense they are accruing within the years and
decreasing inventory and interest expense. This will allow them to get out of the negative interest
expense as well as other income expenses
Walmart External Opportunities and Threats
A firm’s external opportunities are factors that provide an enterprise with means to
heighten the performance of a company as well as the competitive advantage in the market. On
the other hand, external threats are attributes from outside an organization that poses an adverse
influence on the performance, thereby hindering the accomplishment of the intended goals
(Gretzky, 2010). The table below outlines Walmart’s corporation external opportunities and
threats facing the retail giant.
Table 1: Walmart’s External Opportunities and Threats
Opportunities
Invest in emerging retail markets
Threats
Increasing competition from a close rival in the
retail industry
Engaging in online shopping platform
Resistance from local communities
Increasing trend of healthy living
High-cost inflation leading to rising price of
commodities
Increasing people acceptance in branded products Low profitability due to high competition from
through packaging and high quality
wholesalers and retailers club operators
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thereby affecting the company
performance (SEC, 2018)
financial
Green
world
promotion
by
embracing
environmental friendly products
Target a wider market using demographic
segmentation such as health conscious segment
Discussion
Walmart Inc. could exploit the outlined external opportunities in the table above to
enhance the customer base, grow the market share as well as increase profitability of the
company. Exploiting the opportunities would also enhance Walmart competitiveness in the
American as well as in the global market. However, the company should address the identified
external threats, posing a challenge to Walmart accomplishment of the set goals and objectives.
This is because the outlined threats hinder the ability of the company to grow the market share,
leading to a corresponding decrease in the recorded revenues by an enterprise. Thus, Walmart
requires addressing the outlined external threat as well as exploit the identified market
opportunities.
General Environment
An organization general environment comprises of various attributes environmental
layers. This includes nonspecific elements that surround an organization that might influence
different organization activities, which include the demographic, economic status, sociocultural,
technological, global influence, and political/legal attribute (Gupta, 2013).
i.
Demographic segment: This first general environment attributes influence Walmart
Corporation operation in the United States. The country has an estimated population
of 326,625,791 Americans as per reports by the Central Intelligence Agency (2018).
Besides, the age structure encompasses 18.73% of children aged 0 to 14 years,
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13.27% of people aged between 15 and 24 years and 39% of the population aged
between 25 and 54 years. Nonetheless, the country’s population comprises of 12.91%
of individuals aged between 55 to 64 years while 15.63% of the population revealing
ages above 65 years (Central Intelligence Agency, 2018). Lastly, most the American
live in the urban areas with approximately 82.3% of the total population based on
2018 population estimates, with a rate of urbanization at 0.95 %. (Central Intelligence
Agency,2018)
ii.
Economic Segment: The largest American population depicts high living standards.
With a GDP estimate of 19.49 trillion US dollars, the country has one of the largest
economies globally, with the industrial sector accounting for approximately 20.35%
of the US GDP (Central Intelligence Agency, 2018 )
iii.
Sociocultural Segment: The US population reveals a high level of diversification
comprises African American, Hispanic, Non-Hispanic, and Asian among other ethnic
groups and cultures (demographic). Most of the population is educated with
approximately 43% of the population between ages 25 and 64 years having tertiary
education. Besides, the largest population comprise of Christians with 46.5%
depicting Protestant, 20.8% Roman Catholic, 1.9% Jewish, 1.6% Mormon, 0.9%
other Christians and 0.9% Muslims, while the rest of the population affiliated with
other global religions (Central Intelligence Agency, 2018).
iv.
Political/Legal Segment: The country has a constitutional federal republic
government, with Environment Protection Agency acting as the leading federal
agency in the environment and human health protection. Besides, each state has a
regulating a body mandated to protecting the population health such as the Food and
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Drug Administration. The government body’s aims at controlling the type of food
consumed in the market, thereby enhancing the protection of the population from
harmful and unhealthy food material amid the increasing awareness of healthy living.
The country aligns itself in two major political affiliations comprising of the
Democrats and Republicans. The political stand is powerful in the country leading to
significant impact leading to stalling in various imperative reforms, for instance, a
recent government shutdown in mid-2018.
v.
Technological Segment: the US is one of the global countries with a significantly
high technological advancement with 2.8% of the national GDP spent on research and
development. This indicates a high level of commitment for innovation although the
percentage spent is less than what some of the world nations spend on the
technological segment, for instance, Japan approximately 3.4 % of the GDP on
research and development. Besides, the country has an Act that protects intellectual
property governed by the United States Patent and Trademark Office (U.S. Patent and
Trademark Office, 2017). Based on Statista, 2018, US recorded the largest number of
Patent application globally with 59,624 compared with China at 48,882, Japan at
48,208 and Germany at 18,982 applications.
vi.
Global Segment: Is another imperative organizational general environment attribute
that influences a business operation on an international platform. Over the years, the
American government has played a vital role in engaging in global negotiations
aimed at enhancing the global market. This entails development of trade policies that
foster effective international trade by reducing tariff as well as import barriers
fostering globalization. Besides, some policies enhance the reduction of unfair
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competition from international products enhancing the ability to have a fair global
marketplace. This offers companies, such as Walmart an opportunity to exploit the
growing global market in a bid to grow to the market share and corresponding growth
of revenues and profitability of the company.
Industry Environment
The industry environment on an organization comprises of a different factor that
influences a company operation, target market and change on the offered good and services. The
attributes reveal an impact on an entire industry affecting all companies operating in the industry
as opposed to a single enterprise in a marketplace. Notably, marketing strategies do not influence
the industry environmental factors, often attributed to changing demographics, shift in lifestyle
among other economic cycles. For instance, an increase of population health consciousness has
influenced the retail industry in the United States with players in the industry changing their
focus on healthy food material at the grocery stores (Lorinczi, 2008).
Firm’s Strategic Group
Walmart strategic group focuses primarily on the close rival Corporations mainly the
Costco Wholesale and Target Corporation.
1. Costco Wholesale: is an American international corporation operating a chain of
membership and warehouse clubs (Costco Corporation, 2018). The company was
founded by James Sinegal and Jeffrey Brotman and began operating in 1983 in Seattle in
Washington (SEC, 2017). Currently, Costco operates in membership warehouses in U.S,
Canada, UK, Puerto Rico, Spain, France, Japan, and Iceland with 746 warehouses across
the globe including in the U.S (SEC, 2017). The company is one of Walmart Inc. big
competitor in the American retail industry with a revenue base of $ 129 billion US dollars
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in the year 2017. Costco Inc. offers branded merchandise at lower prices, across various
States, and in the international countries. The company operates in different locations
such as Puerto Rico, Canada, UK Korea, and Japan among others. (Costco,2018)
The company objectives include the provision of a broad range of high-quality
merchandise at affordable prices, limited to a line of products that are fast selling. Based
on 10-K Costco’s Annual report 2018, the company offers a wide range of consumable
merchandise in cases, multiple-packs and cartons. Besides, the company policy allows
the member to return products especially, electronics item for technical services, in a bid
to enhance the satisfaction of the members. Besides, Costco pursues cost leadership and
product differentiation as the primary corporate strategies aimed at enhancing the
company competitiveness. Cotsco also uses subscription business model as a business
strategy, which requires its clients to buy membership to shop at the sore (Page, n.d). As a
result, Costco Corporation reveals a number of strengths such as customer loyalty,
sustainability initiative, low cost, and high-quality merchandise. However, the company
depicts a number of weaknesses such as limited choice of products and overreliance on
US markets.
2. Target Corporation: is another Walmart’s Key competitor in the American retail
industry. Target Corporation is second-largest departmental store in the United States,
closely behind Walmart. Headquartered in Minnesota, US, Target Corporation operates
1822 stores as of FY 2018 (Target Corporation, 2018). The company recorded $ 71.88
Billion US dollars in the fiscal year ending 2018 marking a significant growth from 69.5
billion dollars in the financial year 2017. The retail company competes for both
traditional and internet retail, with general merchandise, apparel, wholesale clubs among
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other retailers. The corporation has a compelling value proposition that offers a
competitive advantage in the American retail industry. Target employs market growth,
product development and market penetration as the primary core corporate strategy.
Besides, the company depicts a number of strengths, such as enhanced product
differentiation, higher quality innovative merchandise, and price match with other online
retailers. Nevertheless, the company depicts a number of weaknesses, which include a
high rate of stock-out, pricing perception and lack of presence in the international market.
( Securities and Exchange Commission: Target Corporation, 2018)
Competitive Profile Matrix (CPM)
Total scores show that the high to low scores with Walmart (3.5), Costco (2.75) and
Target (2.2). Through all eight factors, Walmart is considered the strongest likened to Costco and
Target.
External Factors Evaluation Summary
Walmart Inc. has a competitive benefit to augment its operation thus matching the opportunities
with 3.01/4.0 EFE score.
Q4. Internal Strengths and Weaknesses
According to Sammut‐Bonnici and Galea (2015), both strength and weaknesses form an
organizational internal analysis. Sammut‐Bonnici and Galea further argue that internal analysis
of a company is indispensable in recognizing the basis of competitive gain (2015). The internal
analysis highlights the resources, which require sustainability and development for an
organization to remain competitive. Therefore, the competitive gain must be distinct to a
company to yield profit above the industry average. Besides, the elements of an internal
assessment of both strengths and weaknesses are company resources, which are classified into
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functional categories of managerial, financial, supplier, marketing, innovation resources,
infrastructural, and distribution (Sammut‐Bonnici & Galea, 2015).
Strengths and Weaknesses
Table 2: Walmart Strengths and Weaknesses
•
•
•
Strengths
Largest retailer globally
Strong market position
Wide product assortment
•
•
•
•
Global presence
International supply chain
Higher profit margin
Large customer loyalty
•
•
•
Weaknesses
Liquidity position
Legal proceedings
Easily imitable business
model
Strengths
Walmart is the world biggest organization by revenue and the largest international
retailer. In 2018, Walmart recorded a total revenue of US$500.3 billion primarily comprising of
net sales of US$495.8 billion while at the same time being the biggest private employer of 2.3
million employees internationally (SEC, 2018). Being the largest retailer international enables
the company to enjoy economies of scales by sharing fixed costs over different products making
the company one of the most affordable places to shop. Notably, the company can effectively
utilize its resources such as information system, distribution services, and competencies over a
wider number of locations. Secondly, Walmart has a strong market position with a market
capitalization of 289.769B and a market share of 57.7% (Yahoo Finance, 2018). Walmart has an
effective international supply chain, which includes over 100,000 vendors located around the
globe. The effective supply chain enables Walmart to acquire from suppliers the volume and
assortment of products on time thereby, meeting customer demand. Jawad purports that Walmart
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efficient supply chain in regards to operations, distribution, and integration has enabled the
company to lower its cost culminating to the delivery of quality merchandise at the right time to
clients (2017). Walmart has a wide assortment of products which are classified in various
merchandise unit: grocery, health and wellness, and general merchandise entailing entertainment
hardlines, apparel, and seasonal. Walmart has a powerful international presence by being the
biggest international retail (by revenue) as well as functioning 6,360 retail, wholesale and other
stores in 28 countries (SEC, 2018; McGrath, 2013). Walmart had a large gross profit margin of
24.7% in the year 2018. The company also has a large client base loyalty, which a vital
determiner of a company success in any business ventures because of the company practices
customer-centric business operations (Davis, n.d).
Weaknesses
According to the major weaknesses of Walmart emanates from its ability to record a
negative trend in liquidity ratios. For instance, the current ratio in 2016, 2017, and 2018 were
0.93, 086, and 0.76 respectively in this perspective; it is evident that the company’s liquidity ratio
computed as current assets against current liabilities deteriorated from 2016 to the year 2017 and
further deterioration from 2017 to 2018. Additionally, analyzing liquidity ratio with respect to
quick ratio, the company trend in quick ratio deteriorated from 2016 to 2018 with a ratio of 0.24
in 2016, 0.22 in 2017, and 0.22 in 2018. More also in 2016, 2017 and 2018, Walmart cash ratio
deteriorated by recording a ratio of 0.13, 0.10, and 0.09 respectively (Stock Analysis on Net,
2018). The negative trend in Walmart’s liquidity ratio may be attributable to stiff competition
from its rivals in regards to pricing thereby influencing clients’ ability to recognize the price
difference among competitors’ products.
According to SEC (2018), Walmart is currently involved in several legal proceedings
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such as Walmart Class Employee Lawsuit. Arguably, any legal action against the company
damages the business image, incurs a significant amount of cost, and affects the operating
results. Walmart business model is easily imitable since the organization lacks a competitive
differentiator apart from its business size (Smithson, 2017).
Internal Factor Evaluation (EFE) Summary
Internal factor evaluation matrix is a tool for strategic management used for assessing
both the strengths and weaknesses of organizational functional areas (Sammut‐Bonnici & Galea,
2015). IFE is vital in evaluating the performance of Walmart concerning the stated internal
strengths and weaknesses. Walmart internal factor evaluation score is 3.2/4.0 depicting above
average. This shows that the company’s weaknesses are evident to investors resulting from its
low-interest coverage rate of 7.49 in the fiscal year 2018 depicting a deteriorating trend (Stock
on Net Analysis, 2018).
Q5. Mission and Objective Analysis
According to David, a mission statement comprises of nine components: concern for
staff, clients, philosophy, goods or services, market, technology, concern for survival,
profitability, and growth, self-concept, and concern for public image (2011). Thus, the current
Walmart mission statement scores 3.0/9.0 based on the above components. Thus, it is
recommendable for the mission to be improved to score 8.0/9.0 by incorporating technology and
concern for staffs.
“Walmart Stores, Inc. helps people around the world save money and live better- by
creating value to our people and the community and by delivering exemplary customer
experience to the market we serve through mobile and e-commerce capabilities across the globe”
Alternative Strategies
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Business Strategy
Thirteen strategies were identified which Walmart could adapt to tap opportunities and neutralize
the stiff competition in the industry. From the matrix, three strategies matched within the four
elements.
SWOT Matrix Summary
•
Strategy 1: Engage in market development by exploiting new untapped markets in the
developing nations
QSPM Score: 5.17/8.0
Although Walmart has a global presence in developing nations like South Africa,
Botswana and Namibia, taping new markets in developing nations will aid the company
in expanding its market penetration as well as increasing its global market share
culminating to the augmented organizational bottom line. With its strength in cost
leadership likened to its competitors, Walmart could utilize its supplier power to expand
to developing nation market like Africa markets thereby increasing its gross profit
margin. Arguably, the growing high population in developing nations, for instance, in
Africa nations offers a business expansion opportunity for the company.
•
Strategy 2: Engage in market development by entering in joint-ventures in the European
market
QSPM Score: 3.25/8.0
Although Walmart has an international presence, it lacks a recognizable presence in
European nations like France, Germany, Finland, Norway, and Poland. Currently,
Walmart has expanded to the UK leaving other European nations untapped and thus,
providing a business opportunity for the company to expand (SEC, 2018). It is worth
noting that Walmart market penetration to the European market will be challenging
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Business Strategy
resulting from customer purchasing power, client buying behavior, competitors, and
cultural aspects. Thus, to penetrate the European nations, Walmart could engage in a joint
venture with companies in the new markets. This would lead to reduced costs and speedy
market entry.
•
Strategy 3: Develop its private label by exploiting economies of scales offered by
developing countries for manufactured merchandise.
QSPM Score: 2.82/8.0
This would entail outsourcing the production of goods or setting up a manufacturing
plant in developing countries to take advantage of economies of scales by the nations.
This is attributable to the cheap labor offered by the nation compared to the cost of labor
in the US labor market. Cheap labor promotes lowered cost of production leading to the
manufacturing of the low-cost product in the nation compared to the similar cost of
production in the US. In the end, a company saves a lot enjoying the economy of scales
offered by the nations.
Grand Strategy Matrix Summary
Walmart is positioned at the aggressive sector indicating that the company has a favorable
position of using its internal strengths to garner advantage of external opportunities thereby
overcoming external weaknesses and mitigating external threats. For this reason, market
development and market penetration are feasible strategies. The company has a strong
competitive position as well.
Strength (S)
Weaknesses (W)
1. Largest retailer globally
2. Strong market position
1. Liquidity
position
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3. Wide product assortment
2. Legal
4. Global presence
proceedings
5. International supply chain
3. Easily imitable
6. Higher profit margin
business model
7. Large customer loyalty
8. Cost leadership
Opportunities (O)
S-O
1. High-cost inflation leading
W-O
SO1: Expand the number of outlets in countries WO1:
employee
Improve
to rising price of
with less international presence. (S2, O1-6)
benefits
to
commodities
SO2: Exploiting new untapped market in the avoid legal issues (W2,
2. High taxes
developing nations (S1-8, O1)
3. Increasing trend of healthy
SO3: Offer organic foods to align with the WO2: Engage in joint
living
O1-6)
increasing trend of health consciousness (S7, O3)
4. Increasing people
ventures
in
SO4: Open more outlet in the Asian Nations, such European market( W1,
acceptance in branded
as Oman, China, and other GCC countries (S1, O1- O6)
products through proper
5).
packaging and high quality
SO5: Engage with organic food supplier in the US
5. Green world promotion
market (S5, O3)
6. Exploit the European
SO6: Extensive market development in the
potential market
European market (S1-4, O6)
WO1: Invest on a mobile app the would initiate
growth and business model (W1, T1-6)
Threats (T)
S-T
W-T
1.Increasing competition from a ST1: an Advance mobile WT1: minimize and
close rival in the retail industry
1Resistance
communities
from
the
platform to enhance online standardize
local shopping ( S2, T1)
top
management benefits
ST2: Exploit economies of to enhance corporate
3.Low profitability due to high scales
offered
by liquidity (W1, T5)
competition from wholesalers and developing countries for
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retailers club operators thereby manufactured
products
affecting the company financial (S6, T3-4)
performance
Rapid market growth
Quadrant
1
AGGRESSIVE
Walmart Inc. intensive
market development
strategy
Quadrant II
Weak
Competitive
Position
Strong
competitive
position
COMPETITIVE
Walmart Market
penetration Intensive
strategy
Quadrant III
Quadrant
IV
Slow
market
Recommended Strategy
The recommended strategy for Walmart is Market Development: focusing on developing
new products line and expanding into global areas. Walmart offers a variety of brand named
products that are marketing for other consumers such as, Food Network, TMobile, and PF
Chang. Walmart’s prices are constantly adjusted to accommodate marketing the on-shelf
products. Therefore, Walmart would benefit from marketing a private label online and into
international countries. The productions could be manufactured very cheap, but marketed at a
value price, allowing an increase in sales. Although they could introduce their own private
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Dr. Eva Dodd-Walker
Business Strategy
product line to new countries, but they must consider the needs and marketing trends already
used in European countries. Instead, the product line would remain available online for new to
experience.
In 2018, the total number of Walmart stores worldwide is 11,718 stores, including 3,561 stores in
U.S. Asia is Earth’s largest and most populous continent, however, Walmart has just stores in
China,
Japan,
India.
(Our
History.
(n.d.).
Retrieved
December
4,
2018,
from
https://corporate.walmart.com/our-story/our-history)
We recommend the strategy of market development to penetrate deeply Asian market.
Vietnam, with increasing disposable incomes, rapid urbanization, and rising living standards,
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Business Strategy
is one of the most dynamic emerging economies in the ASEAN region. The young population
of consumers – who aged from 15 – 65 years old account for 70%, that expects to be the key
driver to robust the market growth. Walmart should enter the Vietnamese market because of
rapid developing of this country (Hickey, et al., 2018). The long-term objective is to open
Walmart stores over Asia to dominate the retail market in Asia, helping Asian people save
money and live better with Walmart’s products. (Retail in Vietnam – Emerging market,
emerging growth, 2017)
Management
Walmart should begin by setting up the stores chain in Ho Chi Minh city – the biggest city of
Vietnam and the capital of Hanoi. They are also the country’s two biggest cities, ranked
amongst the top 10 Asian cities for retail expansion. (Dezan Shira & Associates, 2018)
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Business Strategy
The number of stores will be increased based on the revenue of each store and then expand to
other big cities. Walmart will hire the local people who have working experience in retail
industrial and train them follow the Walmart’s procedures and policies. For the management
positions, we will send people from Japan and China to run. The working policies will be
made based on the parent’s company’s rule and local culture.
Asian Groceries Retail
Marketing
The marketing activities should focus on introducing the brand name of Walmart to
consumers, use TV advertisement, offering promotion. The marketers take the survey about
the feeling of customers as experiencing shopping in Walmart so that Walmart can improve
their service. Walmart has to compete with Big C and Metro – they are two biggest food
retailer of Vietnam. The annual objective is to build brand name awareness, increase sales by
year, enhance customer service. The long-term objective is the growth market share and
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Business Strategy
launching new product and service from the parent company.
Operation
Walmart should set up the office in Ho Chi Minh city to manage the Vietnamese market’s
operation. In the first year, Walmart should open the 5 stores in Ho Chi Minh city (the most
population of 3.2 million people) and 3 stores in Ha noi (the capital of 1.3 million people)
(World population Review 2017).
From the next year, depending on the revenue and
capacity’s market, Walmart will expand to 3 big cities such as Hai Phong, Can Tho, Quang
Ninh. In each store, the most objective of operation is to control the cost, from improved
staffing, labor cost management. The management must be trained online the Walmart’s
global training to run the stores effectively. The long-term objective of operation always keep
the price of product is lower than similar items that provided by competitors.
Accounting and Finance
Penetrating into Vietnamese market will take the high cost for Walmart. In the first year, the
loss may come in this market and Walmart has to balance between profit from other markets
to make Vietnamese market operate. The objective is to gain profit after one operating-years
and get the growth of annually 20% of revenue. To attract investors, Walmart will raise
money for expanding more stores in the following years.
Research and Development.
Walmart spends resources to investigate which products or service will continue to launching
in Vietnamese market, through strategy and analytics to improve on businesses efficiencies.
R&D department should focus on specific innovation on each product line. The objective of
Research and Development is finding new and efficient solutions (in terms of cost and
results) to the management.
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Balance Scorecard
Perspective
Goal
Measurements
Financial
Firm Growth & Profitability
1. Sales growth > 10%
2. Net Profit > 4.0%
Customer
Value Creation & Satisfaction
1. Survey Rating > 85%
2. Checkout < 7 mins.
Internal Business Process
Organizational Efficiency
1. TAT > 3.0
2. Operating Margin > 6.0
Learning and Growth
(Employees)
Climate Innovation
1. Employee Satisfaction
Rating > 85%
2. New Employee Benefits
program
3. $5,000.00
Adoption
assistance
Suppliers
Satisfaction
1. DAP < 30 Days
2. Suppliers Rating > 85%
Community
Satisfaction
1. Donated 35+ million to
hurricane reliefs
2. Provided >85%
The Financial Sales growth for Walmart Total Revenue years growth in 2018 was compared to
2017 are greater than 10%. Sales dropped by 9% in 2018. Although Target outperformance
Walmart by 4.0% by offering higher quality products, Walmart has a 85% greater customer
survey. The EFF and TAT is greater than 3.0% and operating expenses are greater than 6.0%.
Walmart has an 85% satisfaction rate with their employees. They offer educational scholarship,
developed a new benefits program for all employees, and offer adoption assistance to employees.
One weakness Walmart plans to adjust is how long it takes to pay back their suppliers. Their
DAP is less than 30 days, but they are provided with more than 85% supplies to sell.
Rumelt’s Criteria
The main objective for Walmart is to focus customer experience and the convenience of
shopping.
According to Rumelt’s Criteria, there are four criteria’s used to evaluate a
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Dr. Eva Dodd-Walker
Business Strategy
company’s strategy: consistency, consonance, feasibility, and advantage.
Consistency: Market development has been consistent with Walmart. We are consistently
marketing new brand products, development of innovative ways to shop, and expansion into
global markets, always offered at our low price. We want to maintain the same customer
experience every time they enter the store, by making Walmart your one stop shop.
Consonance: Another way Walmart had increased market penetration is offering Pick-Up
service for their customers. This will allow customers to place online orders, they will
receive a text message/email informing them when their order is available for pick-up.
Customers can receive orders within 1 to hours of submission. This new way to shop will
increase the volume of sale, especially during the busy holiday season.
Feasibility: the cost for providing Pick-Up service is free to customers, but Walmart has
invested a great deal of funds marketing development for this new service. Resources had to
be generated to provide customers with the new Pick-Up service. To single out the Pick-Up
service, we marketed it with the bright color orange. We wanted to assure customers they
knew exactly where to go for their orders. parking spaces to have purchase take to customer
cars. Next, a designated within the store will be separated from other checkout registers. This
will allow customers to come inside the store to wait while orders are being filled. This will
also distinguish register check-outs verses Pick-Up orders. We created a drive-up lane
specifically for Pick-Up customers. We want our customers to feel special and still maintain
the same great shopping experience as possible, so we hired a teach specifically for the PickUp service. Therefore, allowing our employees to focus strictly on the online and instore
pickups. The goal of this service is to avoid the weight inline.
Advantage: The advantage to this new marketing development is it will attract new
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Dr. Eva Dodd-Walker
Business Strategy
customers. Many people love the great deals and products Walmart has to offer but hate the
customer experience when visiting the store. By offering the Pick-Up service, customers can
easily order from home, pickup their items, and never have to leave their vehicles. This new
innovative way will also be an advantage once marketed into new countries like Vietnam,
Africa, & China.
Updated
Walmart has changed rapidly since the report was written. In May 2018, Walmart acquired
77% stake in India largest online retailer, Flipkart for US$16 billion. In June, the company
set up a milk processing facility in Fort Wayne, Indiana, US. (Walmart Report 2018).
Walmart revenue for the twelve months ending October 31, 2018 was $511.879B, a 3.41%
increase year-over-year (Walmart Revenue 2006-2018 | WMT). Walmart’s expansion help
people have more opportunities to experience low price’s goods every day, thanks to that,
Walmart has become bigger and stronger.
Conclusion
Walmart is the biggest company in the global economy that operates of retail and wholesale
and a chain of groceries stores, hypermarkets, discount department stores. With the business
slogan of “everyday low cost”, Walmart always commit to providing the products with price
is lower than similar items’ competitors. They are successfully to apply the business strategy
of cost leadership (Porter’s model) go gain market growth by both revenue and number of
stores over the world. Walmart helps the family save money so that they can live better by
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Dr. Eva Dodd-Walker
Business Strategy
the slogan of “Save money, Live better”. With the purpose of providing customer the best
one-stop shopping experience, Walmart expands continuously scope of products and
services, build up high technology. However, Wal-Mart is not standing still, they are opening
up stores everywhere, continue to bring better lives to people in the world.
References
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Intelligence
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(2018).
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Appendix A: Financial Ratios
Financial Ratios:
Historical Comparison
Walmart
Sources: Yahoo Finance,
10-K Walmart’s Annual 2018
2016
2017
2018
Assessment
Liquidity Ratios
Current Ratio
0.93
0.86
0.76
N
Quick Ratio
0.24
0.22
0.22
N
Inventory Turnover
10.84
11.29
11.43
P
DSI
33.67
32.33
31.93
P
AR Turnover
85.73
83.27
89.12
P
DSO (ACP)
4.26
4.38
4.09
P
Fixed Asset Turnover
4.14
4.26
4.36
P
Total Asset Turnover
2.42
2.44
2.45
P
Debt Ratio
0.58
0.59
0.6
N
TIE
9.46
9.62
9.55
P
Gross Margin
1.34%
1.34
1.34%
P
Operating Margin
5.00%
4.68%
4.40%
N
Profit Margin
3.00%
2.80%
1.97%
P
BEP
12.08%
11.45%
10.88%
N
ROA
7.40%
6.90%
4.82%
N
ROE
18.24%
17.54%
12.70%
P
14.48
16.12
27.36
P
Asset Utilization Ratios
Debt Management Ratios
Profitability Ratios
Market Ratios
P/E
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Dr. Eva Dodd-Walker
Business Strategy
Financial Ratios:
Competitor
Comparison
Sources: Yahoo Finance,
10-K Walmart’s Annual 2018
Case Year
Walmart
Costco
Target
2018
Assessment
Liquidity Ratios
Current Ratio
0.76
1.02
0.45
W
Quick Ratio
0.22
0.46
0.14
W
Inventory Turnover
11.43
12.82
8.3
W
DSI
31.93
28.47
43.98
W
AR Turnover
89.12
84.33
77.37
S
DSO (ACP)
4.09
4.3
4.72
S
Fixed Asset Turnover
4.36
7.19
2.87
W
Total Asset Turnover
2.45
3.47
1.84
W
Debt Ratio
0.6
0.68
0.7
S
TIE
9.55
28.18
8.11
S
Gross Margin
1.34%
1.15%
1.41%
S
Operating Margin
5.00%
3.15%
6.12%
S
Profit Margin
3.00%
2.20%
4.01%
S
BEP
10.88%
10.90%
11.30%
W
ROA
4.82%
7.70%
7.50%
W
ROE
12.70%
24.40%
25.00%
W
27.36
9.84
4
S
Asset Utilization Ratios
Debt Management
Ratios
Profitability Ratios
Market Ratios
P/E
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Appendix B
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Business Strategy
Appendix C: Pro-Forma Statements (in millions)
BS1 2016
BS2 2017
BS3 2018
Cash
$8,705,000
$6,867,000
$6,756,000
$4,783,675
Other Assets
$1,441,000
$1,941,000
$3,511,000
$3,616,330
Accounts Receivable $5,624,000
$5,835,000
$5,614,000
$5,782,420
Inventories
Current Assets
Pro Forma
$44,469,000 $43,046,000 $43,783,000 $45,096,490
$60,239,000 $57,689,000 $59,664,000 $59,278,915
Gross Fixed Assets $139,342,000 $141,136,000 $144,858,000 $147,755,160
Accumulated
Depreciation
Net Fixed Assets
Total Assets
$199,581,000 $198,825,000 $204,522,000 $207,034,075
Accounts Payable
Other Current
Liabilites
$38,487,000 $41,433,000 $46,092,000 $47,474,760
Notes Payable
$3,266,000
$22,866,000 $20,462,000 $26,029,000 $26,809,870
$5,033,000
$6,400,000
$6,592,000
Current Liabilities $64,619,000 $66,928,000 $78,521,000 $80,876,630
Long-Term Debt
Total Liabilities
$51,351,000 $51,362,000 $45,179,000 $40,661,100
$115,970,000 $118,290,000 $123,700,000 $121,537,730
Common Stock
Additional Paid-inCapital
$317,000
$305,000
$295,000
Retained Earnings
$90,021,000 $89,354,000 $85,107,000 $90,201,345
Equity
Total Financing
(L+E)
$80,546,000 $77,798,000 $77,869,000 $85,496,345
($9,792,000) -11,861,000 -7,533,000
$295,000
-5,000,000
$207,034,075
2016
2017
2018
Pro Forma
Sales
482,130,000 485,873,000 500,343,000 $515,353,290
COGS
360,984,000 $361,256,000 $373,396,000 $384,597,880
Gross Profit
121,146,000 124,617,000 126,947,000 130,755,410
Operating Expenses 97,041,000
$101,853,000 $104,698,000 $107,838,940
Operating Income
22,764,000
24,105,000
22,249,000
22,916,470
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Dr. Eva Dodd-Walker
Business Strategy
(EBIT)
Other
Income/Expense
(2,467,000)
(2,267,000)
(7,126,000)
($7,339,780)
EBT
21,638,000
20,497,000
15,123,000
15,576,690
Taxes
(6,558,000)
(6,204,000)
(4,600,000)
($4,738,000)
Net Income Continuing
Ops
15,080,000
14,293,000
10,523,000
10,838,690
Other Adjustments
-386,000
-650,000
-661,000
($650,000)
Net Income to Common
Shares
14,694,000
13,643,000
9,862,000
10,188,690
Appendix D: Extra Credit Matrices
“Walmart” Case Analysis Page 38 of 40
Dr. Eva Dodd-Walker
Business Strategy
Strengths
1
Largest retailer globally
2
Weight
Weighted
Score
Rating
0.1
2
0.2
Strong market position
0.15
2
3
4
Wide product assortment
cost leadership
0.05
0.1
3
2
0.3
0.15
5
International presence
0.05
3
0.15
6
Global supply chain
0.15
4
6
Profitability (Profit margin)
0.1
2
0.6
0.2
7
High customer layalty
0.1
2
0.2
Weighted score=weight*rating
IFE=total WS of strenghts + Total WS of weaknesses
0.2
2
Weaknesses
Weight
Weigted
Score
Rating
1
Liquidity position
0.15
4
2
Legal proceedings
0.05
0
0.6
0
3
Easily imitable business model
0.1
3
0.3
4
Every day price could be related
to poor quality
0.1
3
0.3
1.2
IFE
3.2
Opportunities
1
2
Growth in emerging retail
markets
Growth in online shopping
platform
Weight
Weighted
Score
Rating
0.07
4
0.06
3
3
Increase trend of helathy living
0.05
3
4
Increasing people acceptance in
branded products
0.05
4
5
Green world promotion
0.1
4
6
Exploit the Europne potentail
market
0.08
3
0.28
0.18
0.15
0.2
0.4
0.24
1.45
Threats
1
increasing competition from
close rivals in the retail industry
2
Intense competition
3
4
Resistance from local
communities
High cost inflation leading from
rising price of commodities
Weight
Weighted
Score
Rating
0.05
4
0.1
4
0.1
4
0.1
3
0.2
0.4
EFE= Total WS of Opportunities + Total WS of
Threats
0.4
0.3
5
High taxes
0.02
3
0.06
6
Low profitability
0.05
4
0.2
1.56
EFE
3.01
CP Matrix
“Walmart” Case Analysis Page 39 of 40
Dr. Eva Dodd-Walker
Business Strategy
Competitive Profile Matrix
critical success factors
advertising
global expansion
Price competitiveness
product quality
customer loyalty
market share
market penetration
Geographic coverage
Walmart
Costco
Target
Weight rating weighted score
Rating Weighted score
Rating
Weighted Score
0.2
3
0.6
2
0.4
2
0.4
0.3
4
1.2
3
0.9
3
0.9
0.15
3
0.45
2
0.3
1
0.15
0.1
3
0.3
4
0.4
3
0.3
0.05
4
0.2
3
0.15
2
0.1
0.1
4
0.4
3
0.3
1
0.1
0.05
3
0.15
3
0.15
3
0.15
0.05
4
0.2
3
0.15
2
0.1
3.5
2.75
2.2
weighted score= weight*rating
“Walmart” Case Analysis Page 40 of 40
QSPM Matrix
Dr. Eva Dodd-Walker
Business Strategy
Quantitative Strategic Planning Matrix
(QSPM)
Joint Ventures in
Europe market
AS
TAS
3
0.3
Economies of
scales
AS
TAS
1
0.1
1
Strengths
Largest retailer globally
2
Strong market position
0.15
2
0.3
3
0.45
1
0.15
3
Wide product assortment
0.05
3
0.15
4
0.2
2
0.1
4
5
6
6
cost leadership
International presence
Global supply chain
Profitability (Profit margin)
0.1
0.05
0.15
0.1
2
3
4
2
0.2
0.15
0.6
0.2
3
0
2
2
0.3
0
0.3
0.2
0
2
3
1
0
0.1
0.45
0.1
7
High customer layalty
0.1
2
0.2
2
0.2
1
0.1
1
2
3
4
Weaknesses
Liquidity position
Legal proceedings
Easily imitable business model
Every day price could be related to
poor quality
Opportunities
Weight
0.1
Exploiting
untapped market
AS
TAS
2
0.2
Weight
0.15
0.05
0.1
0.1
Weight
2
1.95
1.1
Exploiting
untapped market
AS
TAS
4
0.6
0
0
3
0.3
Joint Ventures in
Europe market
AS
TAS
0
0
2
0.1
0
0
Economies of
scales
AS
TAS
2
0.3
2
0.1
0
0
3
0.3
0
0
1.2
0.1
Exploiting
untapped market
AS
TAS
Joint Ventures in
Europe market
AS
TAS
2
0.2
0.6
Economies of
scales
AS
TAS
1
Growth in emerging retail markets
0.07
4
0.28
0
0
3
0.21
2
Growth in online shopping platform
0.06
2
0.12
4
0.24
2
0.12
3
Increase trend of helathy living
Increasing people acceptance in
branded products
Green world promotion
Exploit the Europne potentail
market
0.05
2
0.1
3
0.15
0
0
0.05
1
0.05
3
0.15
0
0
0.1
3
0.3
3
0.3
0
0
0.08
4
0.32
0
0
3
0.24
4
5
6
2
Threats
increasing competition from close
rivals in the retail industry
Intense competition
3
Resistance from local communities
1
4
5
6
High cost inflation leading from
rising price of commodities
High taxes
Low profitability
Weight
1.17
0.84
Exploiting
untapped market
AS
TAS
Joint Ventures in
Europe market
AS
TAS
TAS= weight*AS
0.57
Economies of
scales
AS
TAS
0.05
0
0
0
0
0
0
0.1
3
0.3
2
0.2
3
0.3
0.1
1
0.1
0
0
1
0.1
0.1
2
0.2
0
0
0
0
0.02
0.05
0
4
0
0.2
3
2
0.06
0.1
0
3
0
0.15
“Walmart” Case Analysis Page 41 of 40
Dr. Eva Dodd-Walker
Business Strategy
TOTALS
0.8
0.36
5.17
3.25
0.55
2.82
Space Matrix
6
Rapid market growth
Quadrant
1
Walmart Inc. intensive
market market
development startegy
AGGRESSIVE
Quadrant II
Weak
Competitive
Position
Strong
competitve
position
COMPETITIVE
Walmart Market
penetration Intensive
strategy
Quadtrant III
Quadrant
IV
Slow market
“Walmart” Case Analysis Page 42 of 40
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