...Wal-Mart Case Study I believe that America supports Wal-Mart and that Wal-Mart has become the most successful retail sales company in the United States. The number one goal of a corporation is to increase shareholders wealth and Wal-Mart is doing just that. If Wal-Mart were so bad, then people would stop shopping there. The world is all one big market, if people wanted to pay more for their goods, then they would end up paying more for the labor of the goods as well. If there are people that want to pay less for their goods (Wal-Mart shoppers) then they expect that they are going to pay less for the labor of the goods. The United States population is selfish, they will purchase goods at the lowest cost for pure self-benefit and Wal-Mart capitalizes on this fact. You can’t blame Wal-Mart for being too good at what they do. “Wal-Mart's company philosophy ('The Wal-Mart Way') is to be at the leading edge of logistics, distribution, transportation, and technology. The Wal-Mart business model would fail instantly without its advanced technology (Wal-Mart has the largest IT systems of any private company in the world) and supply chain (Wal-Mart has made significant investments in supply chain management).” The United States population wants to save their money, and they will save their money one way or another. Just because Wal-Mart provides its customers with the lowest price doesn’t mean they are at fault, the fact is that if your going to pay bottom dollar for your goods...
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...WAL-MART CASE 1) Why has this company been so successful? The origin of its success has to be seek into the innovative vision of its founder Sam Walton whose central goal and philosophy was to offer shoppers lower prices than they get anywhere else. Walton's goals and philosophy have definitely strongly shaped Walmart’s culture and driven the company’s growth. Its founder innovative strategy followed by a good strategy implementation strongly supported by new technology, made the Walmart business model so successful over all these years. Such successful strategy is mainly due to the development of an extremely good distribution network and software system which has revolutionized the relationship between suppliers and retailers with mutual benefits, as well to its founder heritage management principles highly focused on customer value and service, “associates” commitment to the company achieved by means of sharing of information, ideas and profit as well, community involvement and ethic responsibilities. 2) Why haven’t competitors successfully duplicate their strategy? Walmart strategy is hard to duplicate for competitors because it is actually given by a mix of factors and company values deeply entrenched into the company history, culture and mission. While single strategic management decision can be, and effectively, have been replicated by competitors, the synergy of such strategic management decisions, which is the real key of the company’s growth and success,...
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...Verhaal Wal-Mart Case Study September 16, 2014 Sam Walton started Wal-Mart in 1962. When Wal-Mart was first introduced, it was believed to be the least likely to succeed in the discount retailing business. The central focus of Wal-Mart was on price. By 1970, Wal-Mart had expanded to 30 towns, all in small towns. In order to expand Wal-Mart beyond its small region, Wal-Mart decided to go public. By the 1990s, 100 shares increased in value from $1,650 to $3,000,000. At this time, Wal-Mart had also spread throughout the United States in both large cities and small towns. Wal-Mart had many different opportunities and threats facing them including, but not limited to, the general environment, five-forces, and their industry structure. Using the VRIO framework, one can assess Wal-Mart’s resources and capabilities and conclude whether or not they have sustainable competitive advantages. The overall general environment of Wal-Mart posed opportunities as well as threats. Technology posed disadvantageous to Wal-Mart and other companies in the discount retail industry. “Internet shopping was appealing because of the convenience and selection available, but perhaps the most attractive aspect was the competitive pricing” (Hesterly, p. 1-13). Less people were coming in to look around the stores, and many items could be ordered at the comfort of the consumers’ home with the click of a finger. The demographics posed an opportunity for the discount retail industry and Wal-Mart. Demographics...
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...brought against Wal-Mart by a female employee. It specified how female employees were not given the same opportunity to advance as their male counterpart even though they had just as must experience or more. They were also denied training for top positions and prohibited from working in certain departments that were designated for men only, which also paid more (McGraw Hill, 2014, p. 582). Wal-Mart developed a system they used to promote, pay, assign and transfer their employees. This system was said to be subjective and had a disparate impact on female employees. Wal-Mart officials knew about this mistreatment to their female employees but still did nothing to correct it. They even went as far as to retaliate against one female employee who complained about the discrimination (McGraw Hill, 2014, p. 583). Another lawsuit filed against Wal-Mart in June 2001 claimed employees were not allowed to get paid for their overtime work. The employees were also approached with intimidation by threats if they did not finish their work within a scheduled amount of time, even if it was impossible for the work to be completed that same day (McGraw Hill, 2014, p. 586). Discussion When Sam and his brother Bud established their first Wal-Mart retail store, the vision was always customer satisfaction. He believed if he treated his employees well, they would in fact return that same treatment or better to the customers causing them to come back again (McGraw Hill, 2014, p. 586). Wal-Mart soon offered...
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...Wal-Mart Case Valuing Wal-Mart Stock Questions: 1. Assess the financial health of Wal-Mart based on an analysis of the financial statements. 2. Based on any additional available information (including annual reports and 10-K filings) assess the economic conditions (as of the time of the case), the industry key success factors and competitive situation, and Wal-Mart’s strengths and weaknesses. 3. Develop a pro forma income statement and balance sheet for Wal-Mart for the fiscal year ending January 31, 2006. Assume the following (in addition to information in the case): selling, general and administrative expenses at 17.3 percent of anticipated net sales; interest on debt at an average rate of four percent; similar number of shares outstanding as of January 31, 2005: similar prepaids, other assets, accrued liabilities, deferred taxes and minority interest as in 2005. State any other key assumptions. How profitable do you anticipate Wal-Mart will be? Will Wal-Mart need to increase its reliance on external borrowing? 4. Determine the intrinsic value of Wal-Mart (on a per share basis) using the dividend discount model (DDM). Assess the value based on three forms of the DDM: the constant growth version, an assessment based on three years of projected dividends and a projected future stock price, and the three-stage DDM. Clearly state any assumptions including an estimation of Wal-Mart investor required returns. 5. Determine the intrinsic value of Wal-Mart (on a per share basis)...
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...of Contents Introduction2 Wal-Mart’s resources2 Tangible resources2 Intangible resources3 Human resource3 Wal-Mart’s capabilities4 Distribution4 Corporate function4 Operation4 Management Information4 Marketing5 Competitive advantages5 Knowledge management5 Distribution network5 Relationships strategy with suppliers and associates6 Financial management6 International operation6 Conclusion7 References list7 Introduction This project will analyze resources and capabilities of Wal-Mart and the linkage between two strands. According to Wal-Mart’s case, it can be divided Wal-Mart’s resources into three main types of resource: tangible, intangible, and human resources. Moreover, thanks to its resources, Wal-Mart’s capabilities comprises of distribution, operation, management information, marketing, and corporate function. If linkage between resources and capabilities can be indicated and understood, it enables Wal-Mart to produce many competitive advantages: knowledge management, distribution network, partnerships, and financial management. Through those advantages, Wal-Mart creates some strategies for the growth of its operation line within United State or extending over the world. Wal-Mart’s resources Tangible resources In terms of financial resources, the company has established in discount retailing format and become the largest and most profitable retailer in the world. It has been developing rapidly, as result; Wal-Mart produces much profit to reinvest...
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...Foi verificado que a cultura organizacional da rede Wal-Mart é baseada na simplicidade, ou seja, o modelo de administração da Wal-Mart é um modelo simplista que obteve sucesso e que perdura como filosofia cultura desde a sua criação. Entretanto, enganam-se aqueles que pensam que esse modelo foge aos métodos e técnicas da inteligência competitiva pelo fato de estar calcado numa administração simplista. É notória a utilização de diversas técnicas de inteligência competitiva associado ao modelo de administração da Wal-Mart. Wall-Mart 50th anniversary celebrations - 2012 First store in Rogers, Arkansas. About 6,000 shareholders and employees (including 2,000 from Wal-Mart’s international operations) gathered at the University of Arkansas’s Bud Walton Arena to be hosted by Chairman Rob Walton (son of the founder) and entertained by Justin Timberlake, Lionel Ritchie, Juanes, and Celine Dion. The “one big happy family” festive atmosphere typical of Wal-Mart events had been overshadowed by employee and shareholder disquiet over the Mexican bribery scandal that had erupted in April 2012 concerning payments by Wal-Mart Mexico On May 17, Wal-Mart had reported results for the first quarter of its financial year. Sales were up 8.6% on the previous year, operating income was up 8.3%, and return on equity for the 12-month period was 18.1%. The day before the shareholders’ meeting, Wal-Mart’s stock hit an all-time high. With 2.2 million employees, it was the world’s biggest private-sector...
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...Half a Century of Supply Chain Management at Wal-Mart Wal-Mart Stores Inc., supply chain is still a competitive advantage, but the role through which it derived has changed its competitive advantage. From the start of Wal-Mart in 1962, until the 21st century, Wal-Mart supply chain brought its strength only from cost leadership point of view. However, now it has shifted its focus from cost leadership towards focus strategy for smaller targets within the United States. Wal-Mart’s supply chain management strategy is ideal because it does two things: cut costs while also saving consumers money through favorable cost structures. Wal-Mart’s supply chain relies on a well-orchestrated relationship with its customers and suppliers. These relationships were built and fine-tune over many years which has contributed substantially to their competitive advantage. Wal-Mart has led the retail industry for many years with its innovative ways to minimize costs as well as generate revenue. In other words, Wal-Mart has had the competitive advantage for various reasons such as technology implementation and usage of data. Wal-Mart’s ability to use barcodes and radio frequency identification (RFID) technology to assess how to manage better inventory is a critical role in the company’s success. The data is used to provide real world inventory updates to whether there is a need for supply on the shelves, also known as stock checks. Automatically, costs are reduced due to a more accurate forecasting...
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...1. Did Wal-Mart overestimate the transferability of its FSAs? Wal-Mart’s expansion to the German Market, did not develop as expected. The unique characteristics of the German Market hindered Wal-Mart’s successful model and the company was not sufficiently prepared to cope with all the liabilities of foreignness it faced in Germany. For example, it was impossible to provide EDLP due to the small size of Wal-Mart Germany, its inability to expand rapidly and its illegally judged loss-leader strategy. Wal-Mart’s secondly transferred FSA, its so-called ‘exceptional service’, was also overestimated, due to the fact that several of Wal-Mart’s basic operating principles were only partially compatible with German stakeholders expectations. To conclude, Wal-Mart overestimated the ease of transferring its FSA’s into the German market, without keeping in mind the host country its cultural differences, local regulations etc. Nevertheless, Wal-Mart used its bad experience problems from the past, as a guide for future growth and changed its core culture. They implemented a new system wherein a stronger focus on government restrictions, management requirements, cultural differences, and the specificities of the competitive landscape was integrated. Wal-Mart learned that is important to hire local managers. So, to reduce the lack in adequate knowledge about the international market Wal-Mart is operating in, the company now leaves greater autonomy for local management and more rigid financial...
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...Webster University | Management and Strategy | A glance into Wal-Mart | | Monica Kendra Leigh Spell | 2/5/2011 | A case study of Wal-Mart discussing strategic initiatives | Threats and Challenges A SWOT analysis provides a description of an organization’s strengths, weaknesses, opportunities, and threats. It is an important tool in management decision making, because managers are able to look at what their areas of improvement need to be, what their strong points are, and how to integrate the two to benefit the organization. After conducting a SWOT analysis of Wal-Mart, a few threats and challenges were identified. Changes in executive leadership can and usually do pose challenges for an organization. In this regard, Wal-Mart is no different. Lee Scott took the post as CEO of Wal-Mart in January 2000. Some of his challenges throughout his reign as CEO were ethical issues, personnel dilemmas, health insurance reform, and pressures from external groups. Ethics guides the managers’ decision making process by determining moral awareness, judgment, and character. The manager must acknowledge that an ethical issue exists, determine a solution that is within morals, and have the ability to carry out their ethical decisions. Managers must also wear a “veil of ignorance”, a term based on John Rawls experiment. This means that managers must place themselves in the group that the decision will negatively affect and weigh the decision. Ethical decision making...
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...1. Do you think Wal-Mart could translate its merchandising strategy wholesale to another country and succeed? If not, why not? Wal-Mart is the worlds largest retailer with a bunch of advantages above the rest. I think it is extremely possible for Wal-Mart to translate it’s merchandising strategy wholesale to another country and be highly successful. The main method to focus on is being able to understand the culture and environment that it would need to transition its methods to. For example, China originally turned its nose up at the Americanized way that Wal-Mart presented itself when it first opened. Chinese culture didn’t agree with many things, the main thing being that the meat was sold in Styrofoam or that the fish was dead, it was offensive to them. So Wal-Mart adapted to the Chinese culture and it has been a huge success for them. 2. Why do you think Wal-Mart was successful in Mexico? I think Wal-Mart was successful in Mexico because they hired local managers that were very well versed in the Mexican Culture and they allowed them to control the merchandising strategy as they saw it. After reading this case study I learned that adaption is the key to survival in different environments and economies. Since there are very few vehicles in Mexico transportation is slim, so by building smaller, closer stores was another huge benefit of it being successful in Mexico. 3. Why do you think Wal-Mart failed in South Korea and Germany? What are the differences between...
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...Japanese tends to prefer quality over low prices, which constrasts with Walmart core value as Wal mart's motto is Every Day Low Price. Also, Japan is a small country with limited spaces, which has several implications for Walmart. Small housings and apartment sizes, with high rent prices means that Japanese would need to minimize their purchases. Japanese are having trouble with lack of storage room to store purchases. For example, a typical apartment in Japan would be 1 room apartment with Living, Dining, and Kitchen area. A normal size of Japanese apartment are an average of only 27,55 sqm. Japanses likes to make several small purchases frequently. They minimize purchases, they would make their purchases several times a week, in small quantities. This means that stores would have to be readily available within reasonable distance, and bulk purchasing is discouraged. Compared to Walmart usual practice of centralized, big stores, with bulk purchasing to save costs, a neighborhood convenience store would be more suitable for the Japanese people. Japanese have high operating costs, especially because of the prices of rent and buildings in general. An average commercial land prices in Japan is 156,857 Yen (USD 2,017)/sqm, with average commercial land price in Tokyo reaching 1,551,400 Yen (USD 19,956)/sqm, followed by Osaka with average commercial land price of 493,700 Yen (USD 6,360)/sqm. I suppose it is very expensive compared to the U.S. They are also inability to apply original...
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...YIK UID 3035036503 Case study of Wal-Mart Introduction In this essay, the case of Wal-Mart will be discussed by applying the Milton Friedman’s argument on CSR and utilitarianism. Wal-Mart is the largest retailer in the world, however, it is also known for ruthless exploitation of employee, squeezing suppliers, and crushing communities. It has been the Public Enemy No. 1 for a generation of activists and reformers. To cope with these oppositions, Wal-Mart responded vigorously and, instead, announced plans to preserving the environment, fighting hunger, empowering women and providing access to healthy, affordable food. The essay will try to argue the problems of Wal-Mart dominating the world in the retail business to create great profit by giving low wages to the employee according to Milton Friedman and utilitarianism. Also, it will discuss how the plans announced by Wal-Mart deal with the global responsibility. Moreover, how should government involve in this situation. Problem: Low-wages for the Employee 1. Milton Friedman According to Milton Friedman, an American economist and philosopher, the most important social responsibility of a corporation is to maximize profit for its owner- stockholder (Friedman, 1970). He suggested that if a corporation put the focus on being socially responsible, it would make the corporation less competitive with those competitors who did not put much focus on social responsibility. For the act of Wal-Mart to provide only low wages...
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...Tim Driscoll Wal-Mart Foreign Expansion Case Both of these readings were rather small, but they really gave a lot of information about Wal-Marts foreign expansion ventures and how those quite often didn’t work out too well. Germany and Korea being some of Wal-Mart’s biggest failures abroad, they are perfect examples of how Wal-Mart’s extremely Americanized and streamlined approach really doesn’t match the shopping habits of people around the world. Many different nations have developed extremely polar opposite methods and preferences when it comes to shopping, often in Europe buying at smaller more specialized stores and spending more for higher quality, and in Asian countries looking at pre-packaged foods like meat and fish as “sub-par” and “old”. These are just a few of the specific practices that made it extremely tough for Wal-Mart to enter these foreign markets with its current policies and methods of delivering product to the consumer, and ultimately some of the things that led to its failures in countries like Germany and South Korea. Where Wal-Mart found its stride internationally, though, was when it penetrated the international markets not by aggressively building and expanding stores, but when it purchased already established major competitors and slowly used them to alter the consumer culture in a country. Some prime examples of this are Mexico and Great Britain, where it bought current chains and used them to slowly start introducing Wal-Mart’s discount culture...
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...the famous Wal-Mart supply chain. Wal-Mart’s core competency is price. One cannot find lower prices than they find in Wal-Mart on such a large assortment of products. One of the reasons that price can be Wal-Marts’ core competency relies on the efficiency of Wal-Marts’ world renowned Supply Chain. Wal-Mart will have to partner in some way with the Indian government. A modern road infrastructure is something India needs sorely. Wal-Mart and the country as well as all other businesses and citizens will benefit from a more updated travel system. Indian Culture India is a completely different culture than America. Americans are known for buying items they cannot afford by using credit cards. Indian citizens are known to have a different mentality and they prefer to save up their money and then buy. In America we often go to shopping malls and spend all day shopping for many items. However, eventually the two percent of organized retail businesses in India eventually do revolutionize this way of purchasing products in India. This all happens around the year 2000 when global brands begin to flood the Indian market. More choice among products and quality naturally transforms the mindset of Indian consumers. Increasing brand awareness and high demand for quality suddenly became a part of Indian consumers’ mindset with regard to purchasing products. Retail Regulations A major issue is how will Wal-Mart enter the...
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