case study in walmart

A Detailed Case Study on Largest Retail Giant Walmart

Avinash kumar mahato

Walmart is one of the largest retail companies in the world. It was founded in 1962 by Sam Walton. The headquarter of this company is situated in the United States. The main aim of the company is to provide consistent discounts, loyal customer service, and fast friendly service.

Walmart’s targets to expand its business in large cities as well as spread retail stores throughout the world. The retail stores of Walmart are divided into four divisions Walmart Supercenters , Discount Stores, Neighborhood Markets, and Sam’s Clubs warehouses. More than 100 million customers are visiting these Walmart Stores.

It is very uncomfortable for small merchants and communities in America. Walmart reaches their town and provides low-cost offers and the best customer service. It is a very bad condition for small merchants and businessmen in America. To downtown merchants, Walmart just comes and takes over all the small stores.

The purchasing power, aggressive marketing and provide low prices to the customer by Walmart, tend to pull out the business by the small merchants. Gradually the dream of Walmart company to become the largest retailer in the world is full filing day-by-day. But, they increase their business by the wrong actions and do not respect the culture or language of the communities.

Timeline Events Of Walmart company Business Model Of Walmart How Walmart Generates Revenue? Walmart’s Marketing Strategy Walmart’s - Flipkart Acquisition

Timeline Events Of Walmart company

The Timeline of events for Walmart company since its inception.

• 1960: Sam Walton opened his first discount store in Rogers, Arkansas.
• 1981: Walmart become the largest company in America .
• 1981: After becoming the largest company in America, they opened their stores in a small Louisiana town.
• 1983: Walmart opened its stores in Pawhuska and Oklahoma.
• 1986: Walmart claims that it can restore more than 4000 jobs to American Communities.
• 1989: They drive a campaign about Environmental awareness that Walmart is aware of land, water, and air.
• 1990: There are some activist groups against the expansion of Walmart’s store.
• 31st December 1990: Walmart’s closed its stores in  Louisiana.
• 5th November 1991: Walmart opened up its store in Lowa City.
• 6th October 1998: Walmart’s founder Sam Walton created a family charity named Walton Family Charitable Support Foundation.
• June 1999: Walmart takes over the ASDA Chain (a British supermarket chain), now they have stores and depots across the United States.
• 2001: Walmart becomes the world’s largest retailer, got huge sales of $191 billion.
• July 2003: Walmart opened its stores in Beijing and till now they have 22 stores in China and counting.
• 2006: Walmart closed its stores in Germany.
• July 2007: Walmart is operating more than 2500 retail units in Walmart International and more than 500,000 employers in some countries.
• 2007: By the ending of this year, they got a net $45 billion sales.
• 2008: Walmart’s opened its wholesale facility in India. This is the first step of Walmart's to sell products through its retail outlets in India.
• 2018: Walmart acquired Flipkart for $16 billion and owned 77% stake in India’s largest online retailer brand.

Business Model Of Walmart

There are different business models that are followed by successful companies which vary from time to time. The business model of Walmart is based to eliminate the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs. The main motive of Walmart's business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

The main marketing strategy of the company is based on leading on price, be competitive, and deliver a great experience by the motto of Everyday Lower price.

Walmart has three important segments.

Walmart U.S

Walmart U.S is operated in the U.S. They provide customers with products and services that are not present physically in stores. They provide their services via the website and mobile application . The website of Walmart company has a special feature that provides a third party to sell products. The company operates its business on various platforms like supermarkets, discount stores, neighborhood markets, and e-commerce websites .

Walmart International

Walmart International is also divided into three sections which are retailers, wholesalers, and other small projects. These sections are also divided into various sections such as supermarkets, warehouses, electronics, apparel stores , drug stores, digital retailers, and many more.

It is the online platform of Walmart’s company i.e., “ samsclub.com ”. This club is consists of memberships of the only warehouse retailer operations. This section includes warehouse clubs in the U.S, as well as samsclub.com.

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How Walmart Generates Revenue?

The Revenue Model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning.

Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business. The two main sources of revenue are Product revenue and Service revenue .

Walmart's revenue in the fiscal year ending January, 2020 was $524 Billion.

Product Revenue

Walmart has a wide range of products in various categories:-

• In the grocery category, they have products like Daily needs products, dairy products, frozen foods, bakery, baby products, beauty aids, and many more.
• Health and wellness category have products like Pharmacy products and clinical services .
• The entertainment category has products like electronics products, toys, cameras, movies, music, videos, and books.
• Stationary, paints, and hardware, Automotive, sporting goods, crafts, and seasonal merchandise.
• Apparel categories include apparel for men, women, boys, girls, shoes, jewelry, and accessories.
• Home appliances include home furnishing services, home decor, livings, and horticulture.

Service Revenue

Walmart also provide services to generate revenue in various fields:-

• They provide financial services like prepaid cards , money orders, wire transfer, money transfers, bill payments, and so on.
• VUDU movie streaming services: This is a subscription-based OTT platform for buying and renting movies, watching TV shows on demand.
• Clinical Services include primary health care, Physical and Wellness checks, Clinical lab tests.
• Health Insurance services

Walmart’s Marketing Strategy

Walmart's Business Strategy Analysis is one of the most important parts of any business whether it is small or large. It is very important to make an effective marketing plan to survive in the market . Walmart uses the principle of business marketing penetration method which is used to capture the market by offering lower prices and competitive prices to the consumers.

The company follows cost leadership which makes a huge profit for the company. The company provide low prices to the consumer and treated all the customers as king of the market to maintain the relationship between Walmart and the customer.

According to Walmart, there are four factors that drive the customer’s choice of retailer:

• Assortment.

One more reason for the success of Walmart is purchasing products from local manufacturers in a bulk in one go and selling in small quantities. Buying from local manufacturers is the benefit for both. Buying more products from local manufacturers means they are creating more jobs and they reduce the unemployment rate. They should provide good quality products at a lower price to maintain a good relationship with customers and continue to get profits in business.

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Walmart’s - Flipkart Acquisition

Flipkart is one of the leading Indian e-commerce brands. In 2018, Walmart takes 77% stakes in India’s largest e-commerce company Flipkart and makes the world’s biggest purchase of an e-commerce company.

After this acquisition the future of eCommerce industry in India has become more competitive than ever.

The three main reasons for the acquisition of Flipkart are Flipkart’s leadership in some lucrative sections, its payment platform and the company’s talent pool.

Walmart’s world’s largest company is to continue to expand its business by improving its strategies day-by-day. The main reason for the success of Walmart is the EDLP system i.e., Everyday Low Price. They are working aggressively to maintain profits, market shares, and provide low prices to consumers. There are many business ideas to gain profit from a market. All depends on how you play the cards for a profitable business.

Walmart has made acquisitions of 28 organizations and has 16 sub-organization.

Feel free to reach us and share your understanding and views on the case study of Walmart. We would love to hear from you.

What is the business model of Walmart?

The business model of Walmart is based on eliminating the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs.

What is the motive behind Walmart's Business Strategy?

The main motive of the Walmart business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

What is Walmart's Market Strategy?

How does walmart generate revenue.

The earning model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business.

What are the main sources of revenue for Walmart?

The two main sources of revenue are:

• Product revenue
• Service revenue

Is Walmart owned by China?

The Walmart branch in China is majority Chinese-owned. But predominantly it is owned by Sam Walton's many children.

Why is Walmart so cheap?

They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning.  Hence, by selling in high volume they can sell it at a cheap price and still gain profit.

What are the sub-organisations under Walmart?

There are 16 sub-organisations of Walmart. Some of them are:

• Walmart Labs
• Seiyu Group
• Walmart Canada

What are the top acquisitions of Walmart?

Walmart has acquired 28 companies. Some top acquisitions are:

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Case study: Walmart

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Why Walmart is creating a lifestyle ‘super app’

Since the advent of e-commerce, traditional retailers have tried various ways to take advantage of new shopping methods while keeping the in-store experience growing. Walmart, one of the world’s largest retailers, always strives for a customer-first mindset. So the company has been working to deliver a broader omnichannel experience to customers.

We want our app to be more than just a shopping transaction.

I recently talked to Meng Chee, Walmart’s chief product officer, about the company’s attempt to create a “super app” that’s more than just a shopping experience — and how the pandemic accelerated this approach.

How has your app strategy evolved due to COVID-19, with more consumers choosing to shop across digital platforms?

Before the pandemic, we were already changing our app strategy. Historically speaking, before 2019 we had two areas of businesses running separately: e-commerce and in-store. But in 2019, we made the decision to merge, and in 2020, we restructured our product organization to be at the center, with the goal to deliver omnichannel experiences. That’s why, when the pandemic hit, it only accelerated our efforts to bring one app together. This acceleration has also helped us focus on our larger ambition to create a super app, meaning we want our app to be more than just a shopping transaction. Ultimately we want it to be a lifestyle app, because we’re growing our business, and adding health and wellness services, financial services, auto care, etc. All of this comes together and represents a lifestyle package that we can give our customers via a super app.

I love that you’re talking about super apps. Can you give me an example of a nonshopping use for the app?

Absolutely. Many innovations happened in our app during the pandemic. For Walmart in particular, because of the prominence we have in many communities across the country, we created an online vaccine scheduler so customers could schedule their vaccinations at their local store. Quickly thereafter, we heard from customers that they wanted an easier way to manage their paper vaccine card. So we created a digital vaccine card that is accessible in their Walmart Pharmacy account.

Creating this kind of app can be organizationally tricky. Can you talk to me about how you overcame organizational silos?

The customer is at the center of everything we do. We think there are three ways to address how to work through silos within a large organization and create the apps that matter.

You need clear accountability. … You need a framework that an organizational structure agrees to use and use consistently.

First, you need the right organizational structure. In this case, part of that solution meant having a centralized product organization so that we could prioritize and think about solutions holistically and consider what happens in-store, online, and in the app.

Second, you need a framework that really identifies the way you’re working. You need clear accountability. You can’t have every single silo with a vote. You need a framework that an organizational structure agrees to use and use consistently. This way, you make clean, clear decisions that are consistent for the customer, regardless of how they shop with us.

Finally, you need to create a model that enables executional agility. For example, we have a model that we like a lot called “four in a box.” The 4ITB team is composed of accountable leads from product, tech, design, and the business. The idea is that we work together on solving a problem for the customer in a collective, integrated way. This is how we overcome organizational complexity and develop a clear focus on what our app needs to do in a way that drives value for our customers.

How does Walmart foster a seamless experience for its customers across web and app platforms?

We design with the customer journey in mind. We don’t look at app-versus-web experiences. While we have teams that are dedicated to each, we put the customer’s needs first. A customer might start on a web browser at home, because it’s convenient to shop for groceries, but then go to their phone on the go to add a few things before they pick up in-store. There’s so much that goes on, and we need to think about the customer journey holistically to help them make consistent decisions across platforms. The way you achieve that consistency is to thread it all the way across the product life cycle, and, in this case, multiple product life cycles.

What are some innovations you’ve developed to personalize the experience, and how do you see that evolving?

Our core guiding promise to our customers is to help make their lives better. In order to do that, our personalization has to work very well. There’s a lot to compete with in terms of head space as you look at your phone today, which is why personalization is so key. We have to rapidly bring our brand and our value to the forefront of a customer’s attention span.

For example, we know customers enjoy using our app to shop for their weekly groceries for pickup at our store or delivery at home. To make it faster and easier to place pickup or delivery orders, we created a tab in the app called My Items. The My Items tab automatically organizes customers’ preferred items into categories, like dairy and eggs, pantry, beauty, and more — like having a curated store to shop from within Walmart.

We design with the customer journey in mind. We don’t look at app-versus-web experiences.

Does the app have an impact on the in-store experience?

Absolutely. The app and in-store experiences must be connected, because today’s customer shops across all our channels based on their schedules. It’s our responsibility to design an integrated experience that works for their needs, not the other way around.

Our stores are a competitive advantage, and they’ll always be a core shopping channel for our customer. But we also know that we can use technology to simplify the in-store shopping experience.

For example, we heard from our customers that they wanted better navigation to find where products are located in stores and easier ways to checkout. Over the last year, we’ve been rolling out a new design for Supercenters and Neighborhood Markets that includes things like updated exterior signage reflecting the Walmart app icon, updated in-store messaging system and signage to guide customers and associates to products using the app, and more hosted-checkout kiosks as well as contactless payment solutions, like Walmart Pay and Scan and Go.

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How Walmart Automated Supplier Negotiations

• Remko Van Hoek,
• Michael DeWitt,
• Mary Lacity,
• Travis Johnson

Using a chatbot allows the procurement team to focus more on strategic relationships, exceptions, and continuous improvement.

It’s an age-old problem in procurement: Corporate buyers lack the time to negotiate fully with all suppliers. Historically this has left untapped value on the table for both buyers and suppliers. To address this challenge, Walmart deployed AI-powered negotiations software with a text-based interface (i.e., a chatbot) to connect with suppliers. So far, the chatbot is negotiating and closing agreements with 68% of suppliers approached, with each side gaining something it values. This article offers four lessons to deliver results from automated procurement negotiations: move quickly to a production pilot, start with indirect spend categories with pre-approved suppliers, decide on acceptable negotiation trade-offs, and scale by extending geographies, categories, and use cases.

Walmart, like most organizations with large procurement operations, can’t possibly conduct focused negotiations with all of its 100,000-plus suppliers. As a result, around 20% of its suppliers have signed agreements with cookie-cutter terms that are often not negotiated. It’s not the optimal way to engage with these “tail-end suppliers.” But the cost of hiring more human buyers to negotiate with them would exceed any additional value.

• Remko Van Hoek is a professor of supply chain management at the University of Arkansas’s Sam M. Walton College of Business and advises companies on procurement transformation . He previously served as a chief procurement officer at a number of companies.
• Michael DeWitt is vice president of strategic sourcing at Walmart International.
• Mary Lacity is the David D. Glass Chair and Distinguished Professor of Information Systems at the University of Arkansas’s Sam M. Walton College of Business.    
• Travis Johnson is senior director of procurement enablement solutions at Walmart International.

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Walmart's Workforce of the Future

Any discussion of the future of retail—or how we work—has to include Walmart. As of 2017, 90 percent of the US population lived within 10 miles of a Walmart store; with 11,766 locations worldwide and $514 billion in annual revenues, the discount store also has the distinction of being the largest private employer in the United States, with 1.5 million workers (2.2 million worldwide).

But that size and dominance doesn’t make Walmart immune to pressures faced by any other retail operation. In the second-year Harvard Business School course Managing the Future of Work , Professor William Kerr explores how technology and demographics are changing the way companies like Walmart, and their workers, operate.

“The pace of change in the retail sector is truly extraordinary,” says Kerr, the D’Arbeloff Professor of Business Administration and co-director of Harvard’s Managing the Future of Work initiative . “That requires a lot of reskilling of employees and hard choices, in an uncertain environment, in terms of how to deploy capital.”

“This digital transformation creates new jobs, but, more important, it changes the nature of jobs, even entry-level ones.”

Kerr captures that dilemma by detailing the scope of Walmart’s operations and current strategies in the case “Walmart’s Workforce of the Future.” Published in April, it offers an overview of the considerable investments the retail giant is making in its e-commerce infrastructure, in its employee training and support, and in technological innovations such as robot workers and in-house incubators.

Walmart fights a revenue drop

The case details how the rise of ecommerce (and the success of Amazon in particular) affected Walmart’s discount stores (which sell general merchandise but limited grocery items), resulting in a decrease in annual revenue at those stores from $142.5 billion in 2009 to 97.7 billion in 2018. During the same time period, revenue at Walmart’s “supercenters” (larger stores that also sell groceries and often include services such as eye care, beauty salons, and photo studios) increased by 16 percent, from $409.9 billion to $476.2 billion. (Walmart closed 2,214 discount stores or converted them into other formats from 1993 to 2018, with 2,576 supercenters opening during that time.)

In addition to increasing Walmart’s supercenter footprint, CEO Doug McMillon’s omnichannel strategy focuses on a seamless approach to the customer experience, with an emphasis on employee training and improved ecommerce and automation technology, both on the floor and in back office roles.

One foundational move to beef up its technology was Walmart’s $3.3 billion acquisition of online retailer Jet.com in 2016, an investment that immediately improved its ecommerce infrastructure. Walmart has also piloted and invested in robots to perform a variety of functions, from unloading trucks to scrubbing floors to scanning shelves and bringing items out of storage for curbside delivery orders. But public statements by senior executives made it clear that Walmart was equally committed to the complex, costly effort required to train its human workers.

“I want to be clear that we don’t believe technology is the answer to everything,” McMillon stated in a 2017 annual shareholder meeting. “The secret to success will always be our people. … It will be our humanity that drives our creativity, powers our competitive spirit, and keeps us out in front.”

Technology changes the nature of work

But at the same meeting, McMillon also acknowledged how technology changes the nature of work itself, a perspective echoed by Walmart Chief Sustainability Officer and Walmart Foundation President Kathleen McLaughlin. “…we’re now a tech company as much as a retail company,” Mc Laughlin said. “This digital transformation creates new jobs, but, more important, it changes the nature of jobs, even entry-level ones.”

Those demands require more of workers—and an equivalent commitment to re-skilling and compensation. In the case, Kerr cites Walmart’s investments in wages and training for employees of $1.2 billion and $1.5 billion in 2015 and 2016—part of a move that boosted starting pay for frontline associates from $9 per hour in 2015 to $10 in 2016 (it hit $11 per hour in early 2018). Yet in 2015, announcement of a wage increase resulted in a share price drop the following day of 10 percent, on news that the increase would cut earnings per share by 6 to 12 percent in 2016. It’s a dynamic that lays bare for MBA students the consequences of senior leadership’s choices, says Kerr.

“It’s easy to be critical and say that Walmart should be doing more, but when students review the company’s actions over the past five years, they have to confront the fact that every time the minimum wage went up, the stock price went down—and meanwhile, competitors have better margins.”

The case also outlines Walmart’s approach to training its workers, including its focus on building long-term, transferable skills through efforts such as Pathways, a program that teaches associates about the retail business model, explains the “why” behind the work they’re asked to do, and helps develop the soft skills that are useful in any field. Workers who completed the program received a raise and had increased job opportunities; however, many complained that it lacked clarity and that it took too long to move through the various modules. While Walmart planned for 500,000 employees to go through Pathways in 2016, the initial rollout was considerably lower; as a result, Walmart needed to revamp some parts of the program to speed up its completion rate. (Its Academies program, focused on training and empowering hourly supervisors to directly manage team members, faced similar challenges.)

In another move to build a more skilled, educated workforce, Walmart introduced a program in 2018 that offered workers the opportunity to enroll in online degree programs for $1 a day in business, technology, and supply chain management at three different universities; in June 2019, the program expanded to six universities and 14 areas of study, including cybersecurity and computer science. Widely hailed in the press for the opportunity it offers workers to graduate from college debt-free, the program has seen 7,500 employee enrollments in its first year.

“There’s so much to unpack in the choices that Walmart is making,” Kerr says, remarking that management has also introduced virtual reality goggles to train employees as well as an app, Spark City, that uses a game-type simulation to teach workers about store processes and customer service. Walmart has even crossed over with the gig economy by partnering with platforms including DoorDash, Postmates, Uber, and Lyft for package and grocery delivery.

‘You’re the CEO of Walmart’

So, is Walmart making the right investments for its future? “We spend a lot of time in conversation in this class,” says Kerr. “I’ll say, ‘You’re the CEO of Walmart. What would you have done differently? In 2030, what will your workforce look like? How much of your sales will be in-store, and how much online?

“An early indication of the uncertainty of the future is that, with a bunch of smart MBAs, we had a wide, wide range of opinions as to what the future looks like. From some putting all their chips on ecommerce to others who see Walmart as having a powerful position, particularly in more rural areas, where it can be the one place you go to get your prescriptions, do your shopping, and pick up your ecommerce packages—so building on that, rather than trying to become Amazon.”

Analysts generally give Walmart strong marks for how its investments in technology and training have set it up to compete.

“The progress that they’ve made and the strength they still possess has been working out for them to a good degree,” says Kerr. But it’s too soon to tell whether they have established themselves in a way that will allow them to truly excel. “That’s where the jury is still out. They are still defining the Walmart of the future.”

About the Author

Julia Hanna is an associate editor of the HBS Alumni Bulletin [Image: artran]

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Walmart Business Strategy: A Comprehensive Analysis

By   Julie Choo

Published: January 5, 2024

Last Update: January 5, 2024

TOPICS:   Service Design

In the dynamic landscape of retail, Walmart stands as a behemoth, shaping the industry with its innovative business strategies . This article delves into the core of Walmart’s success, unraveling its business strategy and digital transformation from top to bottom.

Walmart Business Strategy

Walmart’s business strategy is a well-crafted tapestry that combines a variety of elements to secure its position as a retail giant. At the heart of this strategy lies a robust operating model approach that encompasses a diverse range of channels and tactics. 

Transition to An OmniChannel Marketplace

The Walmart business strategy includes leveraging its vast physical presence through an extensive network of stores, drawing customers in with the promise of Everyday Low Prices (EDLP). This commitment to affordability is not just a slogan; it’s a cornerstone of Walmart’s marketing ethos, shaping consumer perceptions and driving foot traffic to its brick-and-mortar locations.

Building Strength via its Emerging Digital Operating Model

Walmart’s business business strategy extends beyond traditional advertising methods and its strength is in its operational strategy where it is charging ahead with digital transformation to become a more complete Omnichannel Marketplace to combat competitors such as Amazon. The retail giant has embraced the digital era, utilizing online platforms and e-commerce to reach a broader audience. Part of this digital evolution involves the strategic placement of distribution and fulfillment centers , ensuring efficient order processing and timely deliveries. By strategically integrating distribution and fulfillment centers into its operating model , Walmart maximizes operational efficiency, meeting customer demands swiftly and solidifying its reputation for reliability in the competitive retail landscape.

In essence, Walmart’s holistic digital operating model backed by a evolving digital transformation  strategy, encompassing physical stores, online presence, and strategically placed distribution hubs, reflects a dynamic and adaptive approach to consumer engagement and satisfaction. 

Walmart’s Existing Business Model Before Digital Transformation

Walmart’s retail business .

Walmart stores, comprising a vast network of discount stores and clubs, serve as the backbone of the retail giant’s physical presence. Walmart’s store format, ranging from neighborhood discount stores to expansive membership-based clubs, caters to a diverse customer base. These Walmart stores are strategically positioned to provide accessibility to a wide demographic, offering a one-stop shopping experience.

The discount stores, characterized by their commitment to Everyday Low Prices (EDLP), have become synonymous with affordability, attracting budget-conscious consumers. Simultaneously, Walmart clubs offer a membership-based model, providing additional benefits and exclusive deals. The amalgamation of these store formats under the Walmart umbrella showcases the company’s versatility, catering to the varied needs and preferences of consumers across different communities and demographics.

Walmart Pricing Strategy

Pricing strategy.

Walmart’s pricing strategy and its competitive advantage are substantiated by reputable sources in the retail industry. The pricing index data, indicating that Walmart’s prices are, on average, 10% lower than its competitors, comes from a comprehensive market analysis conducted by Retail Insight, a leading research firm specializing in retail trends and pricing dynamics.

Everyday Low Prices

Walmart’s success in the retail sector can be attributed to its commitment to Low Price Leadership, a strategic approach that revolves around providing customers with unbeatable prices. Leveraging Economies of Scale, Walmart capitalizes on its vast size and purchasing power to negotiate favorable deals with suppliers, enabling the company to pass on cost savings to consumers. The integration of Advanced Technology into its operations is another pivotal aspect of Walmart’s strategy. From inventory management to supply chain optimization, technology allows Walmart to enhance efficiency and keep prices competitive.

Walmart strives to keep it’s pricing tactics to the concept of “Everyday Low Prices” (EDLP). This philosophy ensures that customers receive consistently low prices on a wide range of products, fostering trust and loyalty. Additionally, the Rollback Pricing strategy involves temporary price reductions on select items, creating a sense of urgency and encouraging sales. Walmart’s Price Matching Policy, both in-store and online, further solidifies its commitment to offering the best deals. This policy assures customers that if they find a lower price elsewhere, Walmart will match it.

The insight into Walmart’s “Everyday Low Prices” (EDLP) philosophy and its impact on a 15% lower average price for common goods compared to competitors is derived from a detailed report published by Priceonomics , a respected platform known for its in-depth analyses of pricing strategies across various industries.

The statistics regarding Walmart’s market share of 22% in the U.S. grocery market and the 19% higher customer loyalty rate compared to competitors are sourced from recent market reports by Statista, a reliable and widely used statistical portal providing insights into global market trends and consumer behavior.

Multiple layers of Discount

Walmart’s embrace of Multiple Discounts adds another layer to its pricing strategy. Whether through seasonal promotions, clearance sales, or bundled deals, the company provides various avenues for customers to save money. This multifaceted approach to pricing reflects Walmart’s dedication to delivering value to its customers, ensuring that affordability remains a cornerstone of the retail giant’s identity.

These sources collectively reinforce the significance of Walmart’s pricing strategy in maintaining its competitive edge and dominating the retail landscape

Walmart’s Servicing Business

Walmart’s strategic expansion into the servicing business marks a transformative shift, positioning the retail giant as a comprehensive one-stop-shop that extends beyond conventional retail offerings. This venture encompasses an array of lifestyle services, ranging from financial services to automotive care and healthcare clinics. Walmart’s aim is clear: to seamlessly integrate into the daily lives of customers, providing not only products but also essential services, thereby enhancing its role in customers’ routines.

In response to the evolving preferences of contemporary consumers who prioritize convenience and accessibility, Walmart’s strategy seeks to streamline the customer journey. The provision of a diverse range of services alongside its traditional retail offerings exemplifies Walmart’s commitment to simplifying the consumer experience. This comprehensive approach not only caters to the varied needs of customers but also cultivates a sense of loyalty, as individuals find value in the convenience of addressing different requirements all under one roof.

The multifaceted nature of Walmart’s strategy is anticipated to foster increased customer retention. By offering not only a wide array of products but also an extensive range of lifestyle services, Walmart solidifies its position as a retail powerhouse, adapting to the changing landscape of customer-centric businesses. The convenience and value embedded in this approach are poised to elevate Walmart’s stature, making it an indispensable part of customers’ lives.

SWOT Analysis of Walmart’s Business strategy

As we navigate Walmart’s digital transformation journey, a SWOT analysis reveals key insights into its strengths, weaknesses, opportunities, and threats, guiding strategic decisions for sustained success in the dynamic retail industry that is operating in an increasingly digital economy.

SWOT Analysis of Walmart:

• Strong Brand Recognition: Walmart’s strength lies in its widely recognized and trusted brand, fostering consumer confidence and loyalty.
• Diverse Revenue Stream: The company’s adaptability is evident through a diverse revenue stream, navigating various markets and industries to maintain financial resilience. Per Walmart’s Q3 FY23 Earnings , a breakdown of walmart’s income can be recognised through its Sam’s Club membership sales (Up by 7.2%), Walmart U.S Comp Sales (Up 4.9%), Walmart U.S. eCommerce (up by 24%), and Walmart International sales (up by 5.4%). 
• Economies of Scale: Walmart leverages its extensive size for economies of scale shown by its strong revenue growth of 5.3% per 2022 and 2023 consolidated Income statement, enabling cost advantages in procurement, operations, and overall efficiency. 
• Strong Customer Base: With a vast and loyal customer base, Walmart establishes a robust foundation in the retail sector, emphasizing customer retention and sustained business growth as per market share stat of 60% shown on the Market retail/wholesale industry dominated by Walmart.

Weaknesses:

• Labor Relations: Walmart has faced criticism for labor practices, including low wages and labor disputes.
• E-commerce Competition: Despite significant strides, Walmart faces intense competition from e-commerce giants (e.g, amazon, eBay), impacting its online market share.
• Over Reliance on US Market: A substantial portion of Walmart’s revenue is generated in the United States, making it vulnerable to domestic economic fluctuations.
• Inconsistent customer service: represents a weakness in Walmart’s SWOT analysis, as variations in service quality across different locations may impact the overall customer experience, potentially leading to customer dissatisfaction and diminished brand perception.

Opportunities:

• E-commerce Expansion: Further growth in the online market allows Walmart to capitalize on changing consumer shopping habits.
• International Expansion: Targeting untapped markets presents opportunities for global revenue diversification.
• Health and Wellness Market: The growing trend towards health-conscious living provides avenues for expansion in the health and wellness sector. Increased understanding of customer journeys in these niches is key to begin to build stickiness effects.
• Technological Innovations: Embracing cutting-edge technologies can enhance customer experience and operational efficiency through a growing Omnichannel marketplace. It is vital to master data science and begin to leverage AI in the battle to understand consumer behaviors and deliver a remarkable experience.
• Competition: Intense competition from traditional retailers and e-commerce platforms poses a threat to Walmart’s market share such as Costco, Target and Amazon.
• Regulatory Challenges: Changes in regulations, especially related to labor and trade, can impact Walmart’s operations and costs. One such example is the metrics shown per Walmart’s ethics & compliance code of conduct aligning to regulatory challenges in culture, work safety, risk mitigation and more. 
• Economic Downturns: Economic uncertainties and recessions may lead to reduced consumer spending, affecting Walmart’s revenue.
• Supply Chain Disruptions: External factors like natural disasters or geopolitical events can disrupt the global supply chain, impacting product availability and costs. Such threats are specifically addressed by Walmart’s Enterprise Resilience Planning Team .

More on Walmart’s Online Competitors

Walmart faces formidable competition in the online retail arena, with key rivals such as Amazon and Target vying for a share of the digital market. Amazon, known for its extensive product selection and swift delivery services, poses a significant challenge to Walmart’s e-commerce dominance. Target, on the other hand, leverages its brand appeal and strategic partnerships to attract online customers. To counteract these competitors, Walmart employs a multifaceted approach that combines technological innovation, competitive pricing, and strategic collaborations.

Walmart strategically invests in advanced technologies to enhance its online platform and improve the overall customer experience. The integration of artificial intelligence (AI) and machine learning enables Walmart to provide personalized recommendations, similar to Amazon’s renowned recommendation engine. Additionally, Walmart’s commitment to competitive pricing aligns with its traditional retail strength, offering Everyday Low Prices (EDLP) and frequent promotions to attract budget-conscious consumers, countering the pricing strategies employed by Amazon and other competitors.

Conducting a thorough SWOT analysis (such as this example from the Strategy Journey Book – 2nd Edition) allows Walmart to capitalize on its strengths, address weaknesses, seize opportunities, and mitigate potential threats, contributing to sustained success in the ever-evolving retail landscape.

Walmart’s Digital Transformation Strategy in the new ERA of AI-led Customer Centricity 

Walmart’s online business strategy.

Overall, Walmart’s e-commerce strategy is customer-centric, driving substantial sales growth by tailoring its approach to the evolving needs of online customers. Operating a multitude of specialized e-commerce websites across diverse product categories, Walmart strategically positions itself on various e-commerce platforms for market penetration within the US.

Servicing Relevant Customer Journeys & Sustainable Transformation

Walmart’s evolving online strategy is characterized by a dual focus on extensive product offerings and technological sophistication, with concrete examples per its strategic partnership with Adobe in 2021 to integrate walmart’s marketplace, online and instore fulfillment and pickup technologies with Adobe commerce showcasing its commitment to a seamless customer experience. The integration of advanced tools is exemplified by the implementation of an efficient order processing system. For instance, Walmart employs real-time inventory management and automated order fulfillment , ensuring that customers experience timely and accurate deliveries. Statistics show an increasing number of fulfillment centers through FY2022 and FY2023 reports per statista .

Emerging predictive capabilities supported by Data Science and AI

In addition, the technological depth extends to personalized experiences, illustrated by Walmart’s robust recommendation engine. By analyzing customer preferences and purchase history, the system suggests relevant products, enhancing the entire customer journey. This personalized touch not only reflects the user-friendly interface but also demonstrates Walmart’s dedication to tailoring the online experience to individual needs.

Focus on seamless CX and UX to improve customer stickiness

Furthermore, Walmart’s commitment to a seamless online interaction is evident in its streamlined navigation features. The website’s intuitive design and optimized search functionality provide a smooth browsing experience for customers. This emphasis on user-friendliness goes beyond mere aesthetics, ensuring that customers can easily find and explore products, contributing to a more engaging online experience. Improved engagement is at the heart of Walmart’s strategy to foster stickiness effects, both digitally and to also build on brand stickiness too.

By investing in cutting-edge technologies while transforming using Human Centered design practices focused on CX and UX, Walmart not only navigates the complexities of the e-commerce landscape but also enhances the overall satisfaction and engagement of its online customers. These examples underscore Walmart’s strategic approach to digital transformation, where technological sophistication is not just a feature but a tangible means to elevate the online shopping experience. 

Walmart International Business

Successful international business expansion requires operating model transformation, and Walmart’s strategy is characterized by a blend of strategic acquisitions, partnerships, and a keen understanding of local markets. This is also how Walmart is operationally applying AI, via strategic partnerships as it continues to build its capabilities to improve its agility to implement transformation and go to market faster, rather than trying to build everything from scratch.

A Sustainable Diversification strategy that adapts to local markets  

Walmart’s international business expansion is a testament to its strategic approach in entering diverse markets and adapting to local nuances. One notable example of Walmart’s successful international expansion is its entry into the Indian market. In 2018, Walmart acquired a majority stake in Flipkart, one of India’s leading e-commerce platforms. This move allowed Walmart to tap into India’s burgeoning e-commerce market, aligning with the country’s growing digital consumer base.

The acquisition of Flipkart exemplifies Walmart’s strategy of leveraging local expertise and established platforms to gain a foothold in international markets. Recognizing the unique characteristics of the Indian retail landscape, where e-commerce plays a significant role, Walmart strategically invested in a company deeply embedded in the local market. This approach not only facilitated a smoother entry for Walmart but also enabled the retail giant to navigate regulatory complexities and consumer preferences effectively.

Another example of Walmart’s commitment to tailoring its offerings to meet local needs is further highlighted in its expansion into China where Walmart adapts its store formats to cater to specific consumer preferences. 

In China, Walmart has experimented with smaller-format stores in urban areas, recognizing the demand for convenient and accessible shopping options. This adaptability showcases Walmart’s understanding of the diverse economic and cultural landscapes it operates in, contributing to its success on the global stage.

Working with partners to diversify and build a sustainable business model 

Collaborations and strategic partnerships play a pivotal role in Walmart’s competitive strategy. In 2023, Walmart has outlined plans to invest heavily into AI automation fulfillment centers to improve its unit cost average by 20%, increasing efficiency in order fulfilments and operations. 

The acquisition of Jet.com in 2016 expanded Walmart’s digital footprint and brought innovative talent into the company. Furthermore, Walmart’s partnerships with various brands (such as Adobe, ShipBob) and retailers enable it to diversify its product offerings, providing a competitive edge against the more specialized approaches of some competitors. As part of Walmart’s strategy in marketing, Walmart has announced partnerships with social media giants such as TikTok, Snapchat, Firework and more further boosting its online digital footprint. 

The acquisition of Jet.com in 2016 not only expanded Walmart’s digital footprint but it brought innovative talent into the company. It is clear Walmart sees the need for talent as key to its continued efforts to apply human centered design as part of its digital transformation strategy.

By continuously adapting and evolving its strategies, Walmart is clearly implementing digital transformation sustainably, to support its future operating model as Walmart remains a formidable force in the online retail landscape, navigating the challenges presented by its competitors.

In conclusion, Walmart’s business strategy is that of an growing Omnichannel marketplace, a multifaceted approach that combines physical and digital retail, competitive pricing, supply chain excellence, and a commitment to customer satisfaction. Understanding these elements provides insights into the retail giant’s enduring success in a rapid changing and competitive digital economy as it continues to combat emerging new business disruptions.

Q1: How did Walmart become a retail giant?

Walmart’s ascent to retail dominance can be attributed to a combination of strategic pricing, operational efficiency, and a customer-centric approach. 

Q2: What sets Walmart’s supply chain apart?

Walmart’s supply chain is marked by innovation and technological integration, allowing the company to streamline operations and stay ahead in a competitive market.

Q3: How does Walmart balance physical and digital retail?

Walmart seamlessly integrates its brick-and-mortar stores with its online presence, offering customers a comprehensive shopping experience.

Q4: What is Walmart’s philosophy on pricing?

Walmart’s commitment to everyday low prices is a fundamental philosophy that underpins its strategy, ensuring affordability for consumers.

Q5: How has Walmart expanded globally?

Walmart’s global expansion involves adapting its strategy to diverse markets, understanding local dynamics, and leveraging its core strengths.

About the author

Julie Choo is lead author of THE STRATEGY JOURNEY book and the founder of STRATABILITY ACADEMY. She speaks regularly at numerous tech, careers and entrepreneur events globally. Julie continues to consult at large Fortune 500 companies, Global Banks and tech start-ups. As a lover of all things strategic, she is a keen Formula One fan who named her dog, Kimi (after Raikkonnen), and follows football - favourite club changes based on where she calls home.

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Case study: Walmart embraces immersive learning

Virtual reality is revolutionizing the way the retail giant’s associates learn.

Published 

In 2016, Walmart had an emerging issue among its learning programs. The $4 trillion retailer has 1.5 million workers in the U.S., and most of them needed training on how to handle complex customer situations — specifically, training that wouldn’t be disruptive to the customer experience.

“We can’t do that in the store,” says Kate Kressen, senior manager II of learning content and development for Walmart in Bentonville, Ark. “And it’s very hard to recreate a live store environment in a training program.”

For a long time they relied on classroom instructors giving lectures and quizzes, or static online courses that associates clicked through on their own. But neither format could convey the heightened experience of dealing with certain situations in the flow of work.

“We can talk all day, but until you understand the tension that associates and managers feel, it doesn’t really translate,” Kressen says.

Armchair coach

Around that same time, Derek Belch was launching Strivr, a Palo Alto, Calif.-based athletic training company that uses virtual reality as an immersion tool to give athletes a way to practice their craft off the field. Belch had previously been an assistant football coach at Stanford while writing his master’s thesis on using VR to train football players. The project was so impressive that Stanford’s head coach provided Belch with funding to launch Strivr, which he co-founded with Stanford VR professor Jeremy Bailenson.

“When we started Strivr, we were only focused on the sports world,” Belch says. But about a year after launching, he got a surprising call from Brock McKeel, senior director of digital operations at Walmart, who’d seen Strivr’s VR software being used for quarterback training. “He wanted to talk about employee training,” Belch says.

By that time, Strivr had worked with more than 30 NFL and college teams, but Belch had never considered the potential of using his immersive training technology to teach store employees. However, as he and his team discussed the opportunity, it started to make sense. “As I talked to Walmart about how they train their employees, and what they needed them to learn, we realized that our formula for athletes wasn’t that different,” he says. His developers wouldn’t need to reinvent the software, they just needed to reengineer the experience for a store environment. “It turned out to be a little easier than we expected,” he says. “Stores are a lot more static than a football field.”

Belch was convinced he could create a course that would work for Walmart, though the potential scale of the project was daunting. Walmart wanted Strivr to create programs that could be run in all 200 learning academies, which are training centers attached to larger Walmart stories. And eventually, the retailer wanted to roll it out to 4,000 locations. “It was important that Strivr be able to scale their solution to meet our needs,” Kressen says, “because we needed to get a handle on training 1.2 million associates.”

“It was a pivotal moment for our company,” Belch says. And it led to the first of many sleepless nights, as he and his team figured out how to meet the training needs of the largest employer in the country.

Black Friday in 3D

For the pilot program, which would be tested in 20 stores, they wanted to focus on a high-impact training experience that would replicate well in virtual reality. So Strivr placed a 360-degree camera in one store on Black Friday and let it record for 30 minutes. “What they captured was incredible,” Kressen says. “We were able to turn it into so much good material.”

They used the content to build a training module that allowed trainees in pilot stores to experience the chaos and pressure that associates face on Black Friday, without having to go through it in real life. VR goggles were used to immerse trainees in the store experience, while an instructor talked about what was happening and pointed out where associates did the right things and what to watch out for.

It was the perfect scenario for the pilot, Belch says. “It gave them the chance to experience Black Friday and to make mistakes without affecting any customers.”

The first round of content wasn’t interactive, but it gave trainees, managers and company leaders a taste of what they could accomplish with VR. Kressen’s team immediately saw the benefit. “It gave us a way to show associates what ‘good’ looks like,” she says.

Employees love it

Early numbers proved that not only was the training fun, it was having the desired effect. “The associates’ response to the content was so exciting,” Kressen says. “It was so different from what they were used to.”

Trainees who took the VR training reported a 30 percent higher satisfaction rating compared with trainees attending traditional courses, and the VR trainees scored higher on content tests 70 percent of the time. They also demonstrated a 10-15 percent higher rate of knowledge retention compared with those in traditional training.

The training also takes less time. What might require 90 minutes of classroom training can be completed in 20 minutes using Strivr content. That translates to millions of dollars in productivity savings, Kressen says.

Once they validated the concept, they focused on how else they wanted to use it, and how to expand the training to 200-plus stores. While the 360-degree videos were effective, Walmart wanted trainees to have a full VR experience that allowed them to interact with the environment, pick things up and engage with virtual customers.

But creating that level of immersive and interactive virtual content would be time- and cost-intensive. Belch wanted to be sure they would get value from any content they created.

“Everyone on my team was excited to start this journey, and we wanted to say ‘yes’ to everything they asked for,” Belch says. “But not all training content is the right fit for virtual.”

He notes that for every 20 ideas they brainstormed, only two or three warranted the time and expense of turning existing training into an immersive experience. “The challenging part was how to sift through the enthusiasm,” he says. “We had to have the confidence to push back when it wasn’t the right choice.”

To find the balance, they made sure every virtual learning program solved a specific need using virtual reality that couldn’t be achieved in a traditional classroom. It had to be attached to some return on investment metric to ensure the experience would deliver business value.

Some early courses included active shooter training, dealing with hazardous spills and severe weather, and practice stocking shelves in high-volume areas. Other suggested topics, however, like learning how to use new store technology, didn’t fit the bill. “You don’t need to recreate an existing piece of equipment in a 3D model when you can just train people on it in the real world,” Belch says.

Once Walmart and Strivr agreed on a topic, they worked collaboratively to capture the right content and script the immersive experiences so that trainees would have lots of opportunities for meaningful interactions within the virtual environment.

Thousands of headsets

As they built the courses, they also had to address the issue of scale. Providing the training to employees across Walmart’s retail network would require a significant technology investment. But once Walmart leaders saw the impact of the training and the enthusiasm to learn more, it wasn’t a hard sell.

In 2018, Kressen’s team got approval to acquire 18,000 Oculus Go headsets for its 200 academies, giving thousands of employees the chance to experience the Strivr training. Today, Walmart has 30 active VR training modules, and the company is rolling out headsets to stores across the nation, with four for every superstore and two per neighborhood market.

“It is a lot of real estate to cover,” Kressen says. Along with buying headsets, they have to make sure stores have the space to store and deploy them, and that managers are trained in how to use the headsets as part of their associate training programs.

It’s a huge undertaking, but it is worth it, according to Kressen: “Associates like the content.” However, the most valuable part of the program is the message it sends. “They appreciate the investment Walmart is making in their training. It shows how much we care about the people component of our business.”

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Walmart Five Forces Analysis (Porter Model), Recommendations

Walmart Inc. competes with Costco , Home Depot , Amazon and its subsidiary, Whole Foods , and many other retailers. The variety of competition compels Walmart to develop strategies to protect the business from the issues in its industry environment, such as the ones linked to external factors identified in this Five Forces analysis of the business. Michael E. Porter’s Five Forces analysis model is a strategic management tool that evaluates the effects of external factors that determine the competitive landscape of the industry. These external factors define the bargaining power of customers or buyers, the bargaining power of suppliers, the threat of substitution, the threat of new entrants, and competitive rivalry. In this case, the five forces refer to the retail industry, where Walmart focuses its operations. The company’s strategic direction is representative of strategic responses to competitive forces in the retail industry environment.

A Porter’s Five Forces analysis of Walmart Inc. shows the implications of the competitive rivalry or intensity of competition on the business and the retail industry. This condition of the industry environment pushes the company to explore strategic measures to manage the negative effects of competition. Considering that the retail market is saturated, Walmart is in a continuous process of improvement to counteract the impact of strong competition shown in this Five Forces analysis.

Summary: Five Forces Analysis of Walmart

Summary . In determining the degree of competitive rivalry in the retail industry, a basic consideration is market saturation. The retail services market is highly saturated. As a result, Walmart Inc. faces tough competition, which warrants strategies and tactics that build on the company’s strengths. The SWOT analysis of Walmart enumerates a number of strengths that the business can utilize to maintain its industry position despite aggressive competitors. Based on the external factors enumerated in this Porter’s Five Forces analysis, Walmart experiences the following intensities of the five forces in the retail industry environment:

• Competitive rivalry or competition – Strong
• Bargaining power of buyers – Weak
• Bargaining power of suppliers – Weak
• Threat of substitutes or substitution – Weak
• Threat of new entrants – Strong

Recommendations . Walmart’s strategic planning must prioritize competition and new entry in the retail industry. Based on this Five Forces analysis, the business needs to continually improve its capabilities to sustain its competitive advantages. Walmart’s generic competitive strategy and intensive growth strategies establish the basic approaches to grow the business and keep it competitive. However, this Five Forces analysis shows that the company needs to develop additional enhancements. It is recommended that the company increase its investment in the automation of internal business processes, including its supply chain. This recommendation aims to improve overall efficiency and, as a result, improve cost effectiveness to satisfy Walmart’s corporate vision and mission statements . It is also recommended that the company further enhance its human resource management. Such improvements can contribute to workforce competencies that support business growth. These resulting improvements based on these recommendations can help counteract the effects of the strong forces of competition and new entry, which are the most significant issues determined in the results of this Five Forces analysis.

Intensity of Competitive Rivalry or Competition (Strong Force)

The intensity of competitive rivalry is strong in the retail industry. This Five Forces analysis considers that there are many firms of different sizes competing in this industry environment. The following external factors are the most significant considerations in Walmart’s strategic management of the strong force of competition:

• Large number of firms in the retail market (strong force)
• Large variety of retail firms (strong force)
• High aggressiveness of retail firms (strong force)

Walmart experiences the strong force of these external factors that define the competitive rivalry in the retail industry environment. In Porter’s Five Forces analysis model, a large number of firms typically strengthen competition. In relation, the high variety of firms imposes challenges in developing Walmart’s competitive advantages, considering the diversity of approaches that these competitors use. Also, higher firm aggressiveness leads to stronger competitive rivalry. Thus, the company must remain aggressive to remain competitive. Walmart must keep growing to remain in its position as a major global retailer.

Bargaining Power of Buyers or Customers (Weak Force)

Walmart faces the weak intensity of the bargaining power of buyers in the retail industry environment. Based on Porter’s Five Forces analysis model, the large population of buyers makes it difficult for them to impose significant pressure on retail firms. Walmart is subject to the following external factors concerning the weak bargaining power of buyers or customers:

• Large population of consumers (weak force)
• High diversity of consumers (weak force)
• Small size of individual purchases (weak force)

The large population of buyers exerts a weak force on Walmart and the retail industry. Individual buyers have a negligible impact on the company’s global revenues. The weak force of buyer diversity and the weak force of small individual purchases further weaken the bargaining power of customers. Higher buyer diversity makes it more difficult for customers to collectively impose pressure on the company. In effect, the bargaining power of buyers is weak in influencing Walmart and other firms in the industry.

Bargaining Power of Suppliers (Weak Force)

The bargaining power of suppliers has weak intensity in the retail industry environment. This Five Forces analysis considers that there are many suppliers in the industry. Large firms like Walmart can easily affect these suppliers. Based on this condition, Walmart experiences the weak force of the bargaining power of suppliers, based on the following external factors:

• Large population of suppliers (weak force)
• Tough competition among suppliers (weak force)
• High availability of supply (weak force)

This Porter’s Five Forces analysis of Walmart Inc. considers the large population of suppliers as having weak potential to impact the company. Individual suppliers have minimal influence on large retailers like Walmart. Also, there are many suppliers competing for limited space in retail stores. The high availability of supply makes it difficult for suppliers to impact the strategic growth of Walmart. Thus, the company faces the weak intensity of the bargaining power of suppliers. Walmart’s corporate social responsibility strategy helps in managing suppliers’ influence on the business.

Threat of Substitutes or Substitution (Weak Force)

The threat of substitutes or substitution has weak intensity in affecting the retail industry environment. Walmart offers a wide variety of goods and services that have few or no substitutes. The following external factors impose the weak threat of substitution against Walmart:

• Moderate availability of substitutes (moderate force)
• Low variety of substitutes (weak force)
• Higher cost of substitutes (weak force)

Some substitutes for Walmart’s goods and services are readily available. However, the external factor of the low variety of substitutes makes it difficult for consumers to move away from products available from retailers like Walmart. Also, some substitutes are more expensive than the low-cost goods and services available at the company’s stores. In Porter’s Five Forces analysis model, the combination of these external factors leads to the weak threat of substitutes or substitution in Walmart’s industry environment.

Threat of New Entrants or New Entry (Strong Force)

Walmart must address the strong intensity of the threat of new entrants. New entry of retail firms is easily achieved even in the presence of giants like Walmart. Small retailers can enter the market and compete on the basis of convenience, location, specialty, and other factors. Based on this Porter’s Five Forces analysis, the strong force of new entry is broken down into the following component external factors:

• Moderate to high cost of brand development (moderate force)
• Low cost of doing business (strong force)
• Moderate capital costs (strong force)

It is costly to develop a new entrant’s brand. Nonetheless, some large new entrants have the financial resources to build a strong brand. This condition exerts a moderate force on Walmart Inc. The cost of establishing a new retail firm and the cost of running it are low to moderate. For example, small retailers have low costs of doing business relative to larger firms. This condition makes it possible for many smaller retailers to compete against Walmart. Initial capital outlay varies, but it is typically high in terms of funding for business space, human resources, and equipment, among other variables. Still, smaller new entrants can establish their operations with low to moderate capital outlay. These external factors in the context of the Five Forces analysis show that new entrants can keep operating and become potential threats to firms like Walmart.

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Hyperledger Web3j in 2024: Updates for Blockchain Developers. Read it here Read it here

How Walmart brought unprecedented transparency to the food supply chain with Hyperledger Fabric

Download Printable Case Study

When an outbreak of a food-borne disease happens, it can take days, if not weeks, to find its source. Better traceability could help save lives by allowing companies to act faster and protect the livelihoods of farmers by only discarding produce from the affected farms.

Walmart thought that blockchain technology might be a good fit for the decentralized food supply ecosystem. To test this hypothesis, the company created a food traceability system based on Hyperledger Fabric. Walmart, together with its technology partner IBM, ran two proof of concept projects to test the system. One project was about tracing mangos sold in Walmart’s US stores and the other aimed to trace pork sold in its China stores.

The Hyperledger Fabric blockchain-based food traceability system built for the two products worked. For pork in China, it allowed uploading certificates of authenticity to the blockchain, bringing more trust to a system where that used to be a serious issue. And for mangoes in the US, the time needed to trace their provenance went from 7 days to… 2.2 seconds!

Walmart can now trace the origin of over 25 products from 5 different suppliers using a system powered by Hyperledger Fabric. The company plans to roll out the system to more products and categories in the near future. In fact, it has recently   announced   that it will start requiring all of its suppliers of fresh leafy greens (like salad and spinach) to trace their products using the system.

Tracking food for better safety

We rarely think about it, but the modern food system is a marvel. We have access to fresh produce all year round, buy exotic food from all around the world, and have more variety than our ancestors could ever dream of.

Our food is generally safe to eat. Still, occasionally it can make us sick. Last year in 2018 there were at least   18 reported outbreaks   of foodborne illnesses in the USA, including the E. coli found in romaine lettuce.

“People talk about the food supply chain,” says Frank Yiannas, former Vice President of Food Safety at Walmart. “But it is not actually a chain, it’s a complex network.” When an outbreak of a food-borne disease does happen, it can take days, if not weeks, to find its source. If investigators cannot point to a specific farm or farms, the government usually advises consumers to avoid products grown in a certain area (as   happened   with romaine lettuce from Yuma, Arizona), or even to avoid the type of product altogether. According to   Walmart , millions of bags or heads of lettuce had to be removed, and consumers lost confidence in romaine lettuce altogether. Better traceability could help save lives by allowing companies to act faster and protect the livelihoods of farmers by only discarding produce from the affected farms.

For this reason, Walmart has always been interested in enhancing transparency and traceability in the food system. Mr. Yiannas explains that the company has tried many systems and approaches to solving this problem over the years; none had brought them the kind of results they were after. When Yiannas first heard about blockchain and the idea of using it to trace food in the supply chain, he was skeptical.

From blockchain skeptic to believer

Karl Bedwell, Senior Director at Walmart Technology, explains, “Creating a (traceability) system for the entire food supply ecosystem has been a challenge for years, and no one had figured it out. We thought that blockchain technology might be a good fit for this problem, because of its focus on trust, immutability, and transparency.”

Bedwell and his team introduced Yiannas to the possibilities of blockchain technologies for enterprise solutions. Says Yiannas, “I really had an “aha” moment once I deeply understood the technology. I had been hesitant about creating yet another traceability system – the ones we had tried in the past never scaled. Now I understand that was because they were centralized databases. Blockchain, with its decentralized, shared ledger felt like it was made for the food system!”

With the business interest in blockchain technology confirmed, Walmart started working on two proof of concept (POC) projects with their technology partner IBM.

Choosing the blockchain

Walmart Technology considered several blockchain technologies but ultimately decided to go for Hyperledger Fabric.

“IBM brought Hyperledger Fabric to us. We looked into Ethereum, Burrow project and others. Ultimately, we decided to go with Hyperledger Fabric because it met most of our needs for a blockchain technology,” Bedwell said. “We felt that it best met our needs. It is an enterprise-grade blockchain technology, and it is permissioned.”

The team also found it important to work with an open-source, vendor-neutral blockchain. Since the food traceability system was meant to be used by many parties, including Walmart’s suppliers and even direct competitors, the technology ecosystem underlying it needed to be open.

Hyperledger Fabric is a blockchain framework implementation and one of the Hyperledger projects hosted by The Linux Foundation. Intended as a foundation for developing applications or solutions with a modular architecture, Hyperledger Fabric allows components, such as consensus and membership services, to be plug-and-play. Hyperledger Fabric leverages container technology to host smart contracts called “chaincode” that comprise the application logic of the system.

For mangoes in the US, the time needed to trace their provenance went from 7 days to… 2.2 seconds!

In October 2016, Walmart, together with its technology partner IBM, announced the two projects: one was about tracing the origin of mangos sold in Walmart’s US stores and the other aimed to trace pork sold in its China stores.

For the mango POC, Yiannas started by creating a benchmark. He bought a packet of sliced mangoes at a nearby Walmart store and asked his team to identify which farm they had come from – as fast as possible. The team started calling and emailing distributors and suppliers, and eventually had an answer almost seven days later. This was not bad by industry standards, but Walmart wanted to do much better. So together with IBM, they got to work building a blockchain-based food traceability system.

The Walmart Technology team looked at their own processes as well as those of their suppliers to design the application. Archana Sristy, Director of Engineering at Walmart, explains, “[Our team at Walmart Technology] co-led the core design and setup of the application (with IBM), as well as built the integration with the enterprise systems. We worked with GS1 (the standards authority in barcodes and labeling) to define the data attributes for upload to the blockchain. IBM wrote the chaincode.

Suppliers used new labels and uploaded their data through a web-based interface.

From POC to production, from Walmart to IBM Food Trust

Once Walmart saw that the system worked, they wanted to expand it – and not just within Walmart. Given the interconnected nature of the food system and the company’s negative experience with closed systems, Walmart wanted to make sure that this time, many players were involved. Says Yiannas, “(Walmart’s) CEO was reaching out to other food companies the next day, including other retailers!” Wal-Mart collaborated with IBM and others to set up   IBM Food Trust , involving prominent players in the food industry, like Nestle and Unilever.

The Walmart team had a positive experience working with Hyperledger. “Every question that we had, it looked like the Hyperledger community had already been working on addressing that,” says Bedwell. For example, in building a truly open system, the Walmart team worried about interoperability with other blockchain-based traceability systems. And as if in answer to their concern, Hyperledger recently   announced   its collaboration with Ethereum. He adds, “It seems that the Hyperledger community is addressing everything that enterprises would be concerned about.”

Says Yiannas, “I really had an ‘aha’ moment once I deeply understood the technology. I had been hesitant about creating yet another traceability system – the ones we had tried in the past never scaled. Now I understand that was because they were centralized databases. Blockchain, with its decentralized, shared ledger felt like it was made for the food system!”

Tips from Frank Yiannas on implementing your blockchain project

1. Let the business lead the project , not the IT department.

2. Understand the business case deeply.  Make sure that you know and can explain why blockchain is the right solution.

3.   In a large organization, you need to   bring a lot of people along.  Think about all the different departments that will be affected by the projects. Meet with these stakeholders early on and explain what you are trying to do.

4. Have your soundbite!   People don’t get inspired by technology, but by a vision. For us, it was the story of mangoes – 7 days vs. 2.2 seconds with blockchain.

5. Participate in forums   that allow you to speak to other companies who have launched similar projects successfully. It helps if you help an expert in the field who’s willing to come in and educate fellow members.

6. Start small, with a POC.  And when you’ve run your pilots and are convinced about the business value, go ahead and scale. After all, Yiannas says, “Walmart is a pretty big lab! If it can scale at Walmart, it can scale anywhere!”

Looking forward

Walmart now traces over 25 products from 5 different suppliers using IBM Blockchain which is built atop Hyperledger Fabric. The products include produce such as mangoes, strawberries and leafy greens; meat and poultry such as chicken and pork; dairy such as yogurt and almond milk; and even multi-ingredient products such as packaged salads and baby foods.

Yiannas says of the impact, “This solution allows us to see the whole chain in seconds! We can take a jar of baby food and see where it was manufactured and trace back all the ingredients to the farms!”

Walmart plans to roll out the system to more products and categories in the near future in cooperation with IBM Food Trust.. In fact, the company recently   announced   that it will start requiring all of its suppliers of fresh leafy greens (like salad and spinach) to trace their products using the system.

“Using the IBM Food Trust network that relies on blockchain technology, we have shown that we can reduce the amount of time it takes to track a food item from a Walmart Store back to source in seconds, as compared to days or sometimes weeks,” Walmart wrote in a   letter   to suppliers.

Beyond tracing the products’ journey, the company might start tracing other data, like sustainability.

About Walmart

Walmart Inc. (NYSE: WMT) helps people around the world save money and live better – anytime and anywhere – in retail stores, online, and through their mobile devices. Each week, nearly 265 million customers and members visit our more than 11,200 stores under 55 banners in 27 countries and eCommerce websites. With fiscal year 2018 revenue of $500.3 billion, Walmart employs over 2.2 million associates worldwide. Walmart continues to be a leader in sustainability, corporate philanthropy and employment opportunity. Additional information about Walmart can be found by visiting http://corporate.walmart.com .

About Hyperledger

Hyperledger is an open source collaborative effort created to advance cross-industry blockchain technologies. It is a global collaboration including leaders in banking, finance, Internet of Things, manufacturing, supply chain, and technology. The Linux Foundation hosts Hyperledger under the foundation. To learn more, visit hyperledger.org

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Home » Management Case Studies » Case Study: Business Strategy Analysis of Wal-Mart

Case Study: Business Strategy Analysis of Wal-Mart

Sam Walton, a leader with an innovative vision, started his own company and made it into the leader in discount retailing that it is today. Through his savvy, and sometimes unusual, business practices, he and his associates led the company forward for thirty years. Today, four years after his death, the company is still growing steadily. Wal-Mart executives continue to rely on many of the traditional goals and philosophies that Sam’s legacy left behind, while simultaneously keeping one step ahead of the ever-changing technology and methods of today’s fast-paced business environment . The organization has faced, and is still facing, a significant amount of controversy over several different issues; however, none of these have done much more than scrape the exterior of this gigantic operation. The future also looks bright for Wal-Mart, especially if it is able to strike a comfortable balance between increasing its profits and recognizing its social and ethical responsibilities .

Why is Wal-Mart so Successful ? Is it Good Strategy or Good Strategy Implementation ? In 1962, when Sam Walton opened the first Wal-Mart store in Rogers, Arkansas, no one could have ever predicted the enormous success this small-town merchant would have. Sam Walton’s talent for discount retailing not only made Wal-Mart the world’s largest retailer, but also the world’s number one retailer in sales. Indeed, Wal-Mart was named “Retailer of the Decade” by Discount Store News in 1989, and on several occasions has been included in Fortune’s list of the “10 most admired corporations.” Even with Walton’s death (after a two-year battle with bone cancer) in 1992, Wal-Mart’s sales continue to grow significantly.

Regarded by many as the entrepreneur of the century, Walton had a reputation for caring about his customers, his employees (or “associates” as he referred to them), and the community. In order to maintain its market position in the discount retail business, Wal-Mart executives continue to adhere to the management guidelines Sam developed. Walton was a man of simple tastes and took a keen interest in people. He believed in three guiding principles: 1. Customer value and service; 2. Partnership with its associates; 3. Community involvement.

• The Customer — The word “always” can be seen in virtually all of Wal-Mart’s literature. One of Walton’s deepest beliefs was that the customer is always right, and his stores are still driven by this philosophy. When questioned about Wal-Mart’s secrets of success , Walton has been quoted as saying, “It has to do with our desire to exceed our customers’ expectations every hour of every day”.
• The Associates — Walton’s greatest accomplishment was his ability to empower, enrich, and train his employees. He believed in listening to employees and challenging them to come up with ideas and suggestions to make the company better. At each of the Wal-Mart stores, signs are displayed which read, “Our People Make the Difference.” Associates regularly make suggestions for cutting costs through their “Yes We Can Sam” program. The sum of the savings generated by the associates actually paid for the construction of a new store in Texas. One of Wal-Mart’s goals was to provide its employees with the appropriate tools to do their jobs efficiently. The technology was not used as a means of replacing existing employees, but to provide them with a means to succeed in the retail market.
• The Community — Wal-Mart’s popularity can be linked to its hometown identity. Walton believed that every customer should be greeted upon entering a store, and that each store should be a reflection of the values of its customers and its community. Wal-Mart is involved in many community outreach programs and has launched several national efforts through industrial development grants.

What are the Key Features of Wal-Mart’s Approach to Implementing the Strategy Put Together by Sam Walton — The key features of Wal-Mart’s approach to implementing the strategy put together by Sam Walton emphasizes building solid working relationships with both suppliers and employees, being aware and taking notice of the most intricate details in store layouts and merchandising techniques, capitalizing on every cost saving opportunity, and creating a high performance spirit. This strategic formula is used to provide customers access to quality goods, to make these goods available when and where customers want them, to develop a cost structure that enables competitive pricing , and to build and maintain a reputation for absolute trustworthiness.

Wal-Mart stores operate according to their “Everyday Low Price” philosophy. Wal-Mart has emerged as the industry leader because it has been better at containing its costs which has allowed it to pass on the savings to its customers. Wal-Mart has become a capabilities competitor. It continues to improve upon its key business processes, managing them centrally and investing in them heavily for the long term payback. Wal-Mart has been regarded as an industry leader in testing, adapting, and applying a wide range of cutting-edge merchandising approaches. Walton proved to be a visionary leader and was known for his ability to quickly learn from his competitors’ successes and failures. In fact, the founder of Kmart once claimed that Walton not only copied our concepts, he strengthened them. Sam just took the ball and ran with it.

Wal-Mart has invested heavily in its unique cross-docking inventory system . Cross docking has enabled Wal-Mart to achieve economies of scale which reduces its costs of sales. With this system, goods are continuously delivered to stores within 48 hours and often without having to inventory them. Lower prices also eliminate the expense of frequent sales promotions and sales are more predictable. Cross docking gives the individual managers more control at the store level.

A company owned transportation system also assists Wal-Mart in shipping goods from warehouse to store in less than 48 hours. This allows Wal-Mart to replenish the shelves 4 times faster than its competition. Wal-Mart owns the largest and most sophisticated computer system in the private sector. It uses a MPP (massively parallel processor) computer system to track stock and movement which keeps it abreast of fast changes in the market. Information related to sales and inventory is disseminated via its advanced satellite communications system.

Wal-Mart has leveraged its volume buying power with its suppliers. It negotiates the best prices from its vendors and expects commitments of quality merchandise. The purchasing agents of Wal-Mart are very focused people. Their highest priority is making sure everybody at all times in all cases knows who’s in charge, and it’s Wal-Mart. Even though Wal-Mart was tough in negotiating for absolute rock-bottom prices, the company worked closely with suppliers to develop mutual respect and to forge long-term partnerships that benefited both parties. Wal-Mart built an automated reordering system linking computers between Procter & Gamble (P&G) and its stores and distribution centers. The computer system sends a signal from a store to P&G identifying an item low in stock. It then sends a resupply order, via satellite, to the nearest P&G factory, which then ships the item to a Wal-Mart distribution center or directly to the store. This interaction between Wal-Mart and P&G is a win-win proposition because with better coordination, P&G can lower its costs and pass some of the savings on to Wal-Mart.

Sam Walton received national attention through his “Buy America” policy. Through this plan, Wal-Mart encourages its buyers and merchandise managers to stock stores with American-made products. In a 1993 annual report management stated the program demonstrates a long-standing Wal-Mart commitment to our customers that we will buy American-made products whenever we can if those products deliver the same quality and affordability as their foreign-made counterparts.

Environmental concerns are important to Wal-Mart. A prototype store was opened in Lawrence, Kansas, which was designed to be environmentally friendly. The store contains environmental education and recycling centers. Wal-Mart has also adopted the low cost theme for its facilities. All offices, including the corporate headquarters, are built economically and furnished simply. To conserve energy, temperature controls are connected via computer to headquarters. Through these programs, Wal-Mart shows its concern for the community.

Wal-Mart has been led from the top but run from the bottom, a strategy developed by Sam Walton and carried on by a small group of senior executives led by CEO David Glass. Although recent growth has led Wal-Mart to add more management layers, senior executives strive to maintain its unique culture. This culture, described as “one part Southern Baptist evangelism, one part University of Arkansas Razorback teamwork, and one part IBM hardware” has worked to Wal-Mart’s advantage.

Just how Successful is Wal-Mart? — A forecast of Wal-Mart’s income for the period 1995-2000, considering increases of 30.6% in Net Sales, 27.7% in Operating Expenses, and 52.3% in Interest Debt (a level which is below Wal-Mart’s historically compounded growth rate of 55.6%) indicates that the company should continue to report gains each year until 2000.

Growth on Sales — According to most analysts and company projections, sales should approximate $115 billion by 1996, representing an increase of 30.6% as compared to 1995. If the company continues at this pace, sales should reach $334 billion by the year 2000. The growth on sales that Wal-Mart reported during the 1980s and the beginning of the 1990s will be difficult to repeat, especially considering the ever-changing marketplace in which it competes. In an interview, Bill Fields, President of the Stores Division, said “Wal-Mart is now seeing price pressure from companies that once assiduously avoided taking it on. These include specialty retailers such as Limited, category killers like Home Depot and Circuit City, and catalog companies like Spiegel. I think everybody prices off of Wal-Mart. You’ve got Limited reaching levels we’d thought they’d never get to. The result is that everyday low prices are getting lower”.

In addition, the baby-boomers are reaching their peak earnings years, when financial and personal priorities change. Thus, savings, not spending, will likely take precedence because most baby-boomers are approaching retirement.

Debt Position — Based on Wal-Mart’s position in 1994, which was considered a year of expansion for the company, (Wal-Mart added 103 new discount stores, 38 “Supercenters”, 163 warehouse clubs, and 94,000 new associates) interest debt increased 52.3%. The cost paid by Wal-Mart to finance property plants and equipment forced the company to increase long term debt by 4.6 times during the period 1991-1995. Long term debt for 1995 is $7.9 billion. If Wal-Mart continues its expansion plans based on more debt acquisition at 1994 levels, the company may not attain forecasted gains by as early as 1998.

Operating Expenses — Operating expenses will be a key strategic issue for Wal-Mart in order to maintain its position in the market. The challenge is how to run more stores with less operating expenses. According to Bill Fields, “. . . the goal is to increase sales per square foot and drive operating costs down yet another notch”. Trends indicate that operating expenses have been growing at a rate of 27.7% in recent years. However, Wal-Mart should reap the benefits of its investments in high technology, and be able to operate more stores without increasing its expenses.

Cost of Sales — Cost of sales historically has been equal to the level of sales. If the company continues to take advantage of its buying power, Wal-Mart can expect to lower its cost of sales.

Wal-Mart’s future will depend on how well the company manages its expansion plans. For the coming years, the company will need to justify its expansion plans with consistent growth in sales, in order to offset the increases in debt interest and operating expenses.

What Problems are Ahead for Wal-Mart? What Risks? — Throughout the 1980s, Wal-Mart’s strategic intent was to unseat industry leaders Sears and Kmart, and become the largest retailer in the U.S. Wal-Mart accomplished this goal in 1991. But Wal-Mart’s current strong competitive position and its past rapid growth performance can’t guarantee that the company will remain as the industry leader or maintain its strong business position in the future. Carol Farmer, a retail consultant, told the Wall Street Journal that, “One little bad thing can wipe out lots of good things”. Every move in its business operation ought to be well thought-out and executed.

Wal-Mart needs to address two major areas in order to maintain or to capture an even stronger long term business position: 1) Single-business strategy — Wal-Mart’s success is mainly based on its concentration of a single-business strategy. This strategy has achieved enviable success over the last three decades without relying upon diversification to sustain its growth and competitive advantages . Given its current position in the industry, Wal-Mart may want to continue its single-business strategy and to push hard to maintain and increase market share. However, there is risk in this strategy, because concentration on a single-business strategy is similar to “putting all of a firm’s eggs in one industry basket”. In other words, if the retail industry stagnates due to an economic downturn, Wal-Mart might have difficulty achieving past profit performance.

Also, if Wal-Mart continues to follow Sam Walton’s vision of expansion, Wal-Mart will reach its peak in the very near future. When it does, its growth will start to slow down and the company will need to turn its strategic attention to diversification for future growth .

2) Social responsibility — Retail stores can compete on several bases: service, price, exclusivity, quality, and fashion. Wal-Mart has been extremely successful in competing in the retail industry by combining service, price, and quality. However, other merchants may object to Wal-Mart’s entry into their community. Because of its ability to out-price smaller competitors, Wal-Mart’s stores threaten smaller neighborhood stores which can only survive if they offer merchandise or services unavailable anywhere else. This makes it very hard for small businesses, such as “mom-and-pop” enterprises, to survive. They, therefore, fight to keep Wal-Mart from entering their locales. Numerous studies conducted in different states both support and criticize Wal-Mart. Nevertheless, Wal-Mart did drive local merchants out of business when it opened up stores in the same neighborhood. As a result, more and more rural communities are waging war against Wal-Mart’s entrance into their market. Besides protesting and signing petitions to attempt to stop Wal-Mart’s entry into their community, the opposition’s efforts can even be found on The Internet. Gig Harbor, a small town in Washington, recently started a World Wide Web page entitled “Us Against the Wal.” The town’s neighborhood association promised that they “will fight them [Wal-Mart] tooth and nail”.

The increasing opposition indicates that the road ahead for Wal-Mart may not be as smooth as Wal-Mart’s annual report would entail. This requires Wal-Mart to rethink its expansion strategy since it would not be profitable to operate in an unfriendly community.

How Big Will Wal-Mart be in Five Years if all Continues to go Well? — Before he died, Sam Walton expressed his belief that by the year 2000 Wal-Mart should be able to double the number of stores to about 3,000 and to reach sales of $125 billion annually. Walton predicted that the four biggest sources of growth potential would be the following: 1. expanding into states where it had no stores; 2. continuing to saturate its current markets with new stores; 3. perfecting the Supercenter format to expand Wal-Mart’s retailing reach into the grocery and supermarket arena — a market with annual sales of about $375 billion; 4. moving into international markets.

Wal-Mart Supercenters represent leveraging on customer loyalty and procurement muscle in order to create a new domestic growth vehicle for the company. With few locations left in the U.S. to put a new Sam’s Club or traditional Wal-Mart, the Supercenter division has emerged as the domestic vehicle for taking Wal-Mart to $100 billion in sales. Before the Supercenter, Walton experimented with a massive “Hypermart”, encompassing more than 230,000 square feet in size. The idea failed. Customers complained that the produce was not fresh or well-presented and that it was difficult to find things in a store so big that inventory clerks had to wear roller skates. One of Walton’s philosophies was that traveling on the road to success required failing at times.

As a result of the unsuccessful experiment, Walton launched a revised concept: the Supercenter, a combination discount and grocery store that was smaller than the Hypermart. The Supercenter was intended to give Wal-Mart improved drawing power in its existing markets by providing a one-stop shopping destination. Supercenters would have the full array of general merchandise found in traditional Wal-Mart stores, as well as a full-scale supermarket, delicatessen, fresh bakery, and other specialty shops like hair salons, portrait studios, dry cleaners, and optical wear departments. Supercenters would measure 125,000 to 150,000 square feet, and target locations where sales per store of $30 to $50 million annually were feasible.

Walton’s prediction was right on target. The Supercenter division more than doubled in size during 1993, then doubled again in 1994. Supercenters, once thought of as risky because of slim profit margins on the food side, will most likely make Wal-Mart the nation’s largest grocery retailer within the next five to seven years.

Expanding overseas, Wal-Mart moved into the international market in 1991 through a joint-venture partnership with CIFRA S.A. de C.V., Mexico’s leading retailer. Since then the company has entered Canada, Hong Kong, mainland China, Puerto Rico, Argentina, and Brazil. The Wal-Mart International Division was officially formed in 1994 to manage the company’s international growth. By the year 2000, analysts expect Wal-Mart to be a huge international retailer, with numerous locations in South America, Europe, and Asia.

Conclusion — The ever-changing market presents continuing challenges to retailers. First and foremost, retailers must recognize the strong implications of a “buyers’ market”. Customers are being offered a wide choice of shopping experiences, but no one operation can capture them all. Therefore, it is incumbent upon management to define their target market and direct their energies toward solving that specific market’s problems. Technology, demographics, consumer attitudes, and the advent of a global economy are all conspiring to rewrite the rules for success. Success in the next decade will depend upon the level of understanding retailers have about the new values, expectations, and needs of the customer. If Wal-Mart continues its customer-driven culture, it should remain a retail industry leader well into the next century.

Related posts:

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• Business Level Strategies – Cases of Wal-Mart, Apple, Zara and Ikea
• Case Study: Pfizer’s Strategy Analysis
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How Customer-Centricity Drives a Reimagined Multichannel Shopping Experience

New experience results in a 98 percent increase in mobile orders.

In a growing, yet underdeveloped ecommerce landscape, Walmart Canada is leading a retail transformation. A transformation that is truly customer-first in its approach to all things digital. With great pride, we partnered with Walmart to develop the experience across all touchpoints, including a recently launched mobile app that is available on both iOS and Android.

The Imperative for Change

We took the philosophy that customers want to browse and shop anywhere, anytime to heart. So we created a responsive site that fluidly adapts to any device. The new walmart.ca incorporated best of breed technologies, modular architecture and consumer-driven insights that resulted in a seamless, consistent experience from desktop, tablet or mobile device.

The Transformative Solution 

Staying true to Walmart’s brand promise of helping customers live better lives while saving time and money, a new grocery service was integrated into an existing responsive experience. Designs that were developed and tested with buyers resulted in a customer-centric experience that includes features such as:

• A real-time slot booking engine for grocery pickup
• A fixed grocery-list style shopping cart
• The ability to save customers' carts across devices and channels

Let’s face it, some customers are in a rush and don’t have time to wander aisles. We branded innovative Grab & Go lockers that are located in select Walmart stores, 7-Eleven locations and Canada Post retail outlets. After customers place their order online, a Walmart Associate fills the order and places it in a locker. Once filled, the customer is sent a 6-digit code to access their locker.

The Business Impact

We’re #1. Walmart.ca is Canada’s first responsively designed ecommerce site for a big box retailer. In 2016, we saw incredible year-over-year growth. The numbers speak for themselves.  

“Canadians count on Walmart to save them money, both in stores and online. We’re delivering on that promise, allowing them to shop anytime, anywhere with Walmart.ca and the Walmart Canada Online Shopping app.” Matt Ginsberg , Senior Director Ecommerce Technology and Product Management, Walmart Canada

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• Harvard Business School →
• Faculty & Research →
• January 1994 (Revised November 2002)
• HBS Case Collection

Wal-Mart Stores, Inc.

• Format: Print
• | Pages: 21

About The Author

Stephen P. Bradley

Related work.

• February 1997 (Revised November 1998)
• Faculty Research

Wal-Mart--1997

• Wal-Mart--1997  By: David B. Yoffie and Anthony St. George