enass walmart

8/11/2019 Enass Walmart

1/27


2/27


3/27

0. C!sto$er. 7rod!cts or services2. Mar*ets8. echnolog"9. Concern for s!rvival, profita&ilit", gro#th

5. 7hilosoph":. Self-concept;. Concern for p!&lic i$age. Concern for e$plo"ees

D. External AuditExternal Analysis: OpportunitiesEconomic/n o!!ortunit available to the industr is the free trade 0one. When the

"overnment enters into ne# trade a"reements #ith forei"n countries, businesses

in the 1nited States have the abilit to offer !roducts from these countries intheir stores. This sim!l increases the mar&ets available to retailers.

Social, cultural, demo"ra!hic, and environmental/n o!!ortunit facin" the industr is that customers #ant ease of sho!!in". To

!rovide the ease of sho!!in" the industr is "uaranteein" that the customers #illfind #hat the #ant #hen the #ant it. This is su!!orted b convenient

!resentation and the ri"ht level of service ever time the customer sho!s.Political, le"al, and "overnment

/n o!!ortunit facin" the industr is that the /sian mar&et is virtuall unta!!edb the retail #orld. havin" an unta!!ed mar&et it "ives a hu"e o!!ortunit for

com!anies to e*!and. It !romises unlimited !otential for "ro#th and !rofits.Technolo"ical

/n o!!ortunit facin" the industr is that internet sho!!in" is "ro#in". To ta&eadvanta"e of internet sho!!in", the industr is focused around the customer. The

customer receives friendl site desi"ns, efficient order fulfillment, fast deliverand !rofessional customer res!onse. The !rocess returns, refunds, and rebates

+uic&l.Com!etitive

/n o!!ortunit facin" the industr is that the value of mone is #ea&enin". The#ea&enin" value of mone #ill hel! the industr because it reduces the abilit of

forei"n manufactures to offer discounts.

External Analysis: ThreatsEconomic

/ threat is that the econom is ver slo# ri"ht no#. There is no #a of!reventin" it and no #a to chan"e it. This im!acts all businesses and causes

!rofit mar"ins to be reduced as !rice-cuttin" ensues to attract more consumers.

Social, cultural, demo"ra!hic, and environmental

/ threat is customer theft. Manufacturers are fi"htin" bac& a"ainst customertheft b embeddin" !a!er cli! si0ed antitheft ta"s, called electronic articlesurveillance labels, inside !roducts and !ac&a"in". Called source ta""in", the

!rocess offers several ma'or benefits.2or one, merchandise ta""ed on the factor floor durin" manufacture or

!ac&a"in" lets retail em!loees s!end less time in the storeroom a!!lin" labelsand more time on the sho# floor hel!in" customers. /lso, hi"h-theft merchandise

!reviousl dis!laed behind "lass can no# sit out in the o!en, boostin" salessi"nificantl. /nother social, cultural, demo"ra!hic, and environmental threat is


4/27

em!loee theft. /lon" #ith antitheft labels there are radio-fre+uenc circuits thatare hidden in !ac&a"es and "o unnoticed. The onl time the #ill "o off is #hen

the bar code scanner does not deactivate the circuit, #hich means the stole it.This hel!s to !revent the t#o forms of em!loee theft, #hich are s#eat heartin"

and slidin". S#eat heartin" is #hen the em!loee char"es the customer less thanthe actual !rice and slidin" is #hen the em!loee covers the barcode at the !oint

of sale.Political, le"al, and "overnmental

/ threat is the Chinese re"ulations. China has one of the lar"est !o!ulations inthe #orld3 ho#ever, the Chinese "overnment does not ta&e &indl to o!enin"

their countr to forei"n establishments. /lso, there is ram!ant corru!tion amon"the Chinese, and the have no "enerall acce!ted accountin" !rinci!les.

Technolo"ical/ threat facin" the industr is that technolo"ical advances ma ma&e the

!roducts obsolescent. /s technolo" advances, !roducts bein" sold toda are"one tomorro#3 this !rovides less !roducts for retailers to sell.

Com!etitive

/ threat is that the industr is not follo#in" consumer taste. To overcome thethreat of not !rovidin" consumers #ants the industr is e*!andin" ra!idl in the

urban centers #hile traditional )#et mar&ets) are bein" ed"ed out as the middle-class enlar"es and oun" !eo!le floc& to the cities.Com!etitive Profile Matri*

/ com!etitive !rofile matri* identifies a firm(s ma'or com!etitors and its!articular stren"ths and #ea&nesses in relation to a sam!le firm(s strate"ic

!osition. The ratin"s are as follo#s$4 ma'or #ea&ness, 5 minor #ea&nesses, 6 minor stren"ths, and 7 ma'or

stren"ths.

CPM Competitive Profile Matrix

Critical Success

Factors

Rating Wal-Mart arget !-mart


5/27

ver critical if the #ant to com!ete a"ainst each other for the best +ualit!roducts at lo# !rices. With this, Tar"et #as scored the hi"hest #ith a ratin" of 7

#hile both Wal-Mart and Kmart are rated as a 6.This is because Tar"et does a lot more advertisin" then Wal-Mart and Kmart.

The ne*t most critical success factor is "lobal e*!ansion #ith a #ei"hted score of8.58. This is some#hat im!ortant if ou #anted to &ee! u! #ith the com!etitors.

Wal-Mart #as found to be rated the hi"hest #ith a 7 #ith Kmart #as rated ne*t#ith a 6, and finall Tar"et rated as a 5. Wal-Mart #as ran&ed the hi"hest

because the are found around #orld, #hile Kmart #as ran&ed ne*t because theare onl found in a fe# other countries. Tar"et, ran&in" last, does not have an

"lobal branches. This is onl a minor #ea&ness because the reall do not haveto "o "loball because of ho# #ell the are &ee!in" u! #ith the com!etitors

#ithin the 1nited States. Price com!etitiveness and financial !osition are ran&edne*t on the com!etitive !rofile matri* #ith a #ei"hted score of 8.49 each. Wal-

Mart, ran&in" the hi"hest in both cases #ith a 7, is above all com!etitors. This isbecause the !rice reasonabl #ith lo#er !rices than all the com!etitors and their

financial !osition is "reat. Tar"et is ran&ed ne*t #ith a ratin" of 6 in both !rice

com!etitiveness and financial !osition. Tar"et is &no#n to have some#hat hi"h!rices and !eo!le tend to see that and #ant to "o sho!!in" else#here li&e Wal-

Mart. Their financial !osition is not that "reat #ith the minor stren"th, but theare &ee!in" u! #ith their ma'or com!etitor, Wal-Mart. 2inall, Kmart is found tohave a ratin" of a 6 in !rice com!etitiveness, and a ratin" of 5 in financial

!osition. This is because Kmart does &ee! u! #ith the !rices of com!etitors, butthe do "et !rice in some areas. Their financial !osition is a minor #ea&ness

because of the Martha Ste#art scandal and their ban&ru!tc. er !roducts #erebein" sold a lot until the scandal came out. :o# the are !ricin" her !roducts

reall lo# 'ust to "et the inventor sold.:e*t, !roduct +ualit and customer loalt is found on the com!etitive !rofile

matri* to have a #ei"hted score of 8.48. Tar"et is found to have a ratin" of 7 in!roduct +ualit. In customer loalt the have a ratin" of a 6. This is because

!roducts found in Tar"et tends to be to! brand !roducts, but at the same time,

customers see these !roducts some#here else for a lo#er !rice and the tend to"o to that !lace instead. Wal-Mart is ran&ed ne*t #ith a ratin" of 6 in both!roduct +ualit and customer loalt. Wal-Mart ma not have to! brand !roducts

but the +ualit is fairl "ood.Customer loalt is also ran&ed as a 6 because some !eo!le do li&e to "et better

!roducts no matter ho# much it costs. Kmart, ran&ed last #ith a 5. This isbecause the do not carr +ualit !roducts. Peo!le tend to "o other !laces for

#hat the #ant because of the better selection and +ualit.2inall, the last critical success factor is mar&et share #ith a ratin" of 8.89. Wal-

Mart and Tar"et are both ran&ed 6 #hile Kmart is ran&ed 4. This is about ri"htbecause as indicated b the total #ei"hted score, Kmart is the #ea&est #ith 5.99.

Tar"et(s total #ei"hted score #as in bet#een but closer to Wal-Mart(s score of

6.49, and Wal-Mart(s #as the stron"est #ei"hted score as 6.98.

In conclusion of the com!etitive !rofile matri*, Wal-Mart as a com!etitor rises

above both Tar"et and Kmart.

External Factor Evaluation/n e*ternal factor evaluation matri* identifies the industr-#ide o!!ortunities and

threats. Wei"hts are assi"ned to the various o!!ortunities and threats based onho# #ell the sub'ect com!an is res!ondin" to the threats and o!!ortunities. The

ratin"s are as follo#s$


6/27

4; !oor res!onse, 5 ; avera"e res!onse, 6 ; above avera"e res!onse, and 7 ;su!erior res!onse.

The main o!!ortunities that #e identified #ere increasin" internet sho!!in", easeof sho!!in", free trade 0ones, the Chinese mar&et, and the value of the dollar.

The main threats that #e identified #ere technolo" ma&in" !roducts obsolete,customer and em!loee theft, slo# econom, the Chinese re"ulations, and not

offerin" #hat the consumer #ants.The o!!ortunities #ere #ei"hted .49 for internet sho!!in", .48 for ease of

sho!!in", .48 for free trade 0ones, .48 for Chinese mar&ets, and .89 for the #ea&dollar. The threats #ere #ei"hted .48 for technolo" ma&in" !roducts obsolete, .

58 for customer and em!loee theft, .89 for the slo# econom, .48 for theChinese re"ulations, and.89 for not offerin" #hat consumers #ant.

The #ei"hts and are re!resentative of the im!ortance the o!!ortunities andthreats !resented to Wal-Mart. The #ere determined b considerin" the im!act

that each one has on the industr and ho# #ell Wal-Mart is conditioned to reactto the situations !resented.

We felt that the most im!ortant factors #ere internet sho!!in", and customer

and em!loee theft. These t#o factors are !aramount to the industr and all ofits counter!art(s success.

If these factors are not addressed b the industr, ban&ru!tc is sure to follo#.We rated each of the o!!ortunities and threats based on ho# #ell Wal-Mart hasbeen !ositionin" itself in the mar&et. Wal-Mart(s #ebsite has been a hu"e success

#ith it contributin" additional revenue to the bottom line3 #e rated this as a 7.The res!onse to consumer demand for one-sto! sho!!in" has also been a

success. The fact that ou can bu a vast ma'orit of everda needs such as"roceries, clothes, !ersonal care !roducts, electronics, amon" man other

!roducts sho#s the commitment Wal-Mart is ma&in" to the one-sto! sho!!in"idea. We also rated this 7.

We felt that Wal-Mart(s continued e*!ansion into forei"n countries to be aboveavera"e and thus rated it a 6. ecause China is heavil re"ulated, #e rated their

res!onse to the o!!ortunities available in China a 5. This is still a ver "ood score

because it is ver difficult for an firm to e*!and into China.Wal-Mart(s reaction to the dollar #ea&enin" has been above avera"e because ofits #orld#ide covera"e. The have been able to ta&e advanta"e of this economic

factor #ith ease and #e rated it a 6.The res!onse to threats has been e+uall im!ressive. While technolo" is

constantl ma&in" !roducts obsolete, Wal-Mart has been able to !osition itself tobe a !ositive avenue for sellin" all of the ne#est and innovative !roducts. Wal-

Mart su!!liers definitel have a "reat o!!ortunit for sales because of the vastaudience that !atroni0e Wal-Mart. We rated this as a 6. Em!loee and customer

theft is inevitable in all industries. This #as ran&ed as a 5 because Wal-Mart usesthe same devices that the entire industr uses. The slo#in" econom has been a

sour !oint to all industries as #ell. Wal-Mart has been able to limit its e*!osure

b offerin" lo# !rices and maintainin" its mar&et-leadin" share. We ran&ed this

factor a 7. /"ain, because China is such a tou"h mar&et to enter, #e ran&ed theirres!onse to Chinese re"ulations a 5. The idea that com!anies offer !roducts that

consumers do not #ant is not uncommon. There have been thousands of!roducts that have flo!!ed after bein" introduced. Wal-Mart has been able to

circumscribe their e*!osure b offerin" thousands of !roducts across mandifferent areas. We ran&ed their res!onse to this a 7. The final score, 5.


7/27

Opportunities

. he fail!re of circ!it cit"2. =aving al#a"s lo# price8. Wal-Mart operated internationall" in 8 co!ntries

9. Wal-Mart gro!ped its s$aller disco!nt stores into a ne# ho$eto#n )S/ progra$5. /ccepting Master cards for pa"$ents:. Ma>or cost advantages over S!per ?$art and arget;. Wal-Mart la!nched a pilot progra$ in China. 7hilanthrop" and co$$!nit" involve$ent4. ?$art sh!t do#n :00 stores in the !nited states d!ring 20020. o ta*e over, $erge #ith, or for$ strategic alliances #ith other glo&al retailers,

foc!sing on specific $ar*ets s!ch as E!rope or the @reater China


8/27

:. 0.0; 2 0.9

;. 0.05 0.05

)reats

. 0.0: 8 0.

2. 0.05 2 0.0

8. 0.08 8 0.04

9. 0.08 2 0.0:5. 0.0; 2 0.9

:. 0.08 2 0.0:

;. 0.05 8 0.5

. 0.0: 8 0.

4. 0.09 2 0.0

0. 0.02 0.02

. 0.08 8 0.04

2. 0.02 2 0.09

8. 0.0: 9 0.29

otal *.++ .12

Five Forces Analysis of al!Mart "n#ustry

Threat of Com!etitors$

he &iggest threat in the )S @rocer"Fisco!nt


9/27

uers= Po#er$

D!"ers% act!all" hold a good deal of po#er in the )S @rocer"Fisco!nt


10/27

children(s hos!itals throu"h the Children(s Miracle :et#or& Telethon, !rovidedmone and man!o#er for fund raisers, school benefits and churches, o and

>irl Scouts, !ar& !ro'ects, !olice and fire charities, food ban&s, senior citi0encenters, and more. The also educate the !ublic about recclin" and other

environmental to!ics #ith the hel! of a )>reen Coordinator,) a s!eciall trainedem!loee #ho coordinates efforts to ma&e an environmentall res!onsible store.

/lon" this same line, Wal-Mart has created Environmental ?emonstration Storesin @a#rence, Kansas3 Moore, %&lahoma3 and Cit of Industr, California. These

stores serve as a )test tube) for environmentall friendl buildin" materials ande*!erimental methods for conservin" ener" and #ater.

2inall, the cor!orate structure of Wal-Mart is ver #ell rounded and mana"ed#ith three core values$ res!ect for the individual, service to their customers, and

strivin" for e*cellence. The mana"ement of Wal-Mart is the bac&bone to theentire com!an and these core-values have !ro!elled Wal-Mart to the to! of their

industr and have allo#ed Wal-Mart to be the #orld(s lar"est com!an.Mar&etin"

The nature of Wal-Mart(s mar&etin" is in its Ever ?a @o# Price AE?@PB

cam!ai"n. This is #hat ma&es Wal-Mart successful. Sam Walton devised a sstemfor #hich !rice settin" #as to be follo#ed. Sam #ouldn(t allo# mana"ement to

hed"e a !rice at all. If the list !rice #as 4.D


11/27


12/27

/s discussed in the !roductionGo!eration section, Wal-Mart uses a so!histicatedsstem of satellite-based communications. The also offer a safe, secure and

com!lete #ebsite #here consumers can !urchase all of the same !roducts foundin the store. The #ebsite is stren"th because it is not onl a means for

!urchasin" !roducts, but is also a ver thorou"h informational site.

E. 3nternal Audit

"nternal Analysis: ea&nessesMana"ement

The bi""est #ea&ness that Wal-Mart has in the mana"ement area is that it doesnot have a formal mission statement. While the do have core values, the do

not e*!licitl tell their em!loees or consumers #hat their business is. This is afundamental as!ect of a com!an and it !rovides not definition and direction, but

it "ives a com!an a statement on #hich to rel on to sta stron" and focused./nother #ea&ness is that there are fe# females in to! mana"ement and there

are fe# minorities em!loed. With such a societal demand for e+ualit, Wal-Mart

is lac&in" in this cate"or. This is not a ver "ood ethical decision for Wal-Mart tobe ma&in". The are reall hurtin" their cor!orate ima"e b maintainin" this

!osition.The other area that Wal-Mart lac&s in is #ith unions. Currentl, Wal-Mart does not

have an union involvement. This is a !roblem because of the !erce!tion of

treatin" em!loees !oorl. 1nions are created to !rovide bar"ainin" !o#er toem!loees on issues that involve their com!ensation, benefits, and #or&in"

conditions. This is also a #ea&ness because of 'ob securit. With unions, 'obsecurit is not as much of a concern.

Mar&etin"The bi""est source of mar&etin" #ea&ness stems from Wal-Mart lobbin" to

e*!and into ne# mar&ets. There are thousands of to#ns across the 1nited Statesthat have tried to bloc& the introduction of Wal-Mart because of the economic

im!act that it has on small-to#n stores and sho!s. Wal-Mart has a dama"edre!utation because #hen the move into a location the end u! )forcin") these

t!es of businesses out of business.2inanceG/ccountin"

Wea&nesses in Wal-Mart(s finances are seen in three of its ratios. The fi*ed assetturnover,earnin"s !er share, and avera"e collection !eriod ratios are not ver

"ood. The fi*ed assetturnover ratio is tellin" us that the have made a lot ofinvestments, but that the are notbein" full used at this !oint in time. The

earnin"s !er share ratio is not "ood because #hencom!ared to the industr,the are not earnin" as much mone for each shareholder.

o#ever, this is most li&el due to the sheer number of outstandin" shares. Theavera"e collection !eriod is a cause for concern because it means that the are

allo#in" their debtors to carr accounts #ith Wal-Mart for an above avera"e!eriod of time. This is not "ood because it increases the li&elihood of non-

!ament.

ProductionG%!erationsThe lar"est source of concern for this functional area is the slo#in" s!eed of

chec&out lines.This is sim!l a !roduct of Wal-Mart(s success. ecause more and more !eo!le

are "oin" to Wal-Mart, and the number of chec&out lines is stain" constant, the

onl #a to com!ensate is for the time to chec&out increase. This is a !roblem


13/27

because it can and #ill cause !eo!le to choose other stores that are lesscon"ested. The are basicall losin" sales due to this fact.

Research and ?evelo!mentThis is a #ea&ness because the do not activel en"a"e in an research and

develo!ment.S!ecificall, the do not do an !rior site research before o!enin" a store. The

sim!l a!!roach a local "overnment and build.Com!uter Information Sstems

We did not find an #ea&nesses in Wal-Mart(s com!uter information sstems.Internal 2actor Evaluation

The internal factor evaluation is used to evaluate the ma'or stren"ths and#ea&nesses of a com!an. There are #ei"hts assi"ned to stren"ths and

#ea&nesses based on ho# the com!an res!onds to them. The ratin"s are$ 4 ;!oor res!onse, 5 ; avera"e res!onse, 6 ; above avera"e res!onse, and 7 ;

su!erior res!onse.The &e stren"ths #e identified #ere financial !osition, em!loees, customer

oriented, one sto! sho!!in", satisfaction "uaranteed !ro"rams, em!loee stoc&

o#nershi! and !rofit sharin", #ell-rounded business, ease of #ebsite, "oodre!utation, and favorable access to distribution net#or&s. /lon" #ith &e

stren"ths of Wal-Mart, #e also identified &e #ea&nesses. The &e #ea&nessesare some ratios are not sufficient, non-unioni0ation, no formal mission statement,fe# #omen and minorities in to! mana"ement, undifferentiated !roducts and

services, site research, slo# s!eed of chec&out service, and finall a dama"edre!utation.

The stren"ths #ere #ei"hted$ .87 for financial !osition, .8J for em!loees, .8Jfor customer orientation, .47 for one-sto! sho!!in", .89 for satisfaction

"uaranteed !ro"rams, .89 for stoc& o#nershi! and !rofit-sharin", .86 for #ell-rounded business, .87 for ease of #ebsite, .87 for "ood re!utation, and .87 for

favorable access to distribution net#or&s. The #ea&nesses have also been#ei"hted. The #ea&nesses #ei"hted scores #ere .86 for insufficient ratios, .49

for non-unioni0ation, .89 for no formal mission statement, .89 for fe# #omen and

minorities in to! mana"ement, .86 for undifferentiated !roducts and services, .89for site research, .87 for slo#in" s!eed of chec&out service, and .86 for adama"ed re!utation.

These #ei"hts sho# the im!ortance of each stren"th and #ea&ness of Wal-Mart.The are determined b ho# im!ortant that +ualit is to Wal-Mart and ho# hard

of an im!act each has a"ainst other businesses. We felt that the most im!ortantfactors #ere one-sto! sho!!in" and non-unioni0ation. These t#o factors are ver

im!ortant to Wal-Mart(s structure and #ell bein" as a #hole. If these factors arenot evaluated re"ularl, the could !ut a start to its !otential do#nfall.

We rated each stren"th and #ea&ness based on ho# Wal-Mart seems to be!ositionin" itself a"ainst its com!etitors. Wal-Mart(s em!loees, customer

orientation, one-sto! sho!!in", satisfaction "uaranteed !ro"rams, stoc&

o#nershi! and !rofit sharin", ease of #ebsite, "ood re!utation and favorable

access to distribution net#or&s all have been ver successful stren"ths for thecom!an. These are so successful #e rated each #ith a 7. The financial !osition

of Wal-Mart and the #ell-rounded business that it is has made Wal-Mart #hat it istoda. ecause of this success #e rated these factors #ith a 6.

In their #ea&nesses, #e thou"ht that minor #ea&nesses included$ non-unioni0ation, no formal mission statement, fe# #omen and minorities in to!

mana"ement, undifferentiated !roducts and services, site research, and theslo#in" s!eed of chec&out service. Since these #ere onl minor #e "ave them a


14/27

score of 5. We also rated some ma'or #ea&nesses. These included insufficientratios and their dama"ed re!utation, #hich #e rated as a 4.

usin" these scores in the internal factor evaluation matri*, #e came to a totalscore for Wal-Mart bein" a 6.84, #hich is above avera"e. The are above the

avera"e com!an #hen it comes do#n to its stren"ths and #ea&nesses and ho#the deal #ith them.

E*istin"GPotential ProblemsThere are three !otential !roblems for the or"ani0ation. The are customer and

em!loee theft, slo# chec&out service, and non-unioni0ation. Ran&ed in the orderof im!ortance, customer and em!loee theft comes out first. This is a ma'or

!roblem not for 'ust Wal-Mart but for the #hole industr as #ell. The em!loeesstart to become ver creative in the #a the steal merchandise or even mone.

%ne e*am!le could be #hen the cashier is chec&in" someone out3 the cashier

doesn(t "ive the recei!t to the customer, then #hen the customer leaves theem!loee #ill cancel the transaction and ta&e the mone. /lon" #ith em!loee

theft customer theft is another bi" issue. :o matter #hat technolo" Wal-Marthas, someone #ill fi"ure out ho# to "et around it.The ne*t !otential that is of im!ortance, ran&in" second, is slo# chec&out

service. When !eo!le "o to Wal-Mart, the ma "o for the lo# !rices, but #henthe "o to leave some !eo!le ma sa for"et it. Some Wal-Mart(s have the

slo#est chec&outs around. It ma ta&e fifteen minutes for someone to bu onethin" because of ho# man !eo!le are in line #aitin". This reall discoura"es

!eo!le from "oin" to Wal-Mart and ma encoura"e them to "o to a com!etitor.2inall the last !otential !roblem Wal-Mart has is non-unioni0ation. This is

because in the industr the com!etitors have unions #hile Wal-Mart doesn(t. The#or&force for Wal-Mart had been lobbin" to unioni0e for the distinct advanta"e

that unions !rovide to their members. This is im!ortant because union

membershi! allo#s em!loees to increase their value to the em!loer and tothemselves throu"h collective bar"ainin". /s this !ressure increases, Wal-Mart#ill either have to create unions or the #ill have to increase its com!ensation

and benefits to em!loees.

"nternal Factor Evaluation ("FE) Matrix

Critical Success Factors Weig)t Rating Weig)ted Score

Strengt)s

. 0.0: 9 0.29

2. 0.09 8 0.2

8. 0.0: 9 0.29

9. 0.05 9 0.20

5. 0.09 8 0.2:. 0.08 8 0.04

;. 0.0: 9 0.29

. 0.0; 9 0.2

4. 0.02 8 0.0:

0. 0.0; 9 0.2

. 0.08 9 0.2

2. 0.0: 9 0.29

8. 0.0: 9 0.29


15/27

Wea(nesses

. 0.09 2 0.0

2. 0.0; 0.0;

8. 0.0: 2 0.0

9. 0.0: 0.05

5. 0.0; 0.0;

:. 0.02 2 0.09;. 0.08 2 0.0:

0A' *.++ .2

Internal-E*ternal Matri*

The internal-e*ternal matri* is also &no#n as a !ortfolio matri* because itinvolves !lottin" or"ani0ation divisions in a schematic dia"ram. It is based on t#o

&e dimensions$ the internal factor evaluation total #ei"hted score on the *-a*isand the e*ternal factor evaluation total #ei"hted scores on the -a*is.

%n the *-a*is of the internal-e*ternal matri*, an internal factor evaluation total#ei"hted score of 4.8 to 4.DD re!resents a #ea& internal !osition, a score of 5.8

to 5.DD is considered avera"e, and a 6.8 to 7.8 is considered stron". Similarl, onthe -a*is, an e*ternal factor evaluation total #ei"hted score of 4.8 to 4.DDis

considered lo#, a score of 5.8 to 5.DD is medium, and a score of 6.8 to 7.8 ishi"h.

The internal-e*ternal matri* is divided into three different re"ions. The first

re"ion is described as "ro# and build and can use intensive or inte"rativestrate"ies. The second re"ion is described as hold and maintain. This re"ion can

use mar&et !enetration and !roduct develo!ment strate"ies. The third and finalre"ion is described as harvest or divest and this is #here successful or"ani0ations

are able to achieve !ortfolio of businesses.

Wal-Mart is !art of "ro# and build strate"ies and the three strate"ies a!!ro!riatefor the com!an are mar&et !enetration, mar&et develo!ment, and !roduct

develo!ment. This is because the internal factor evaluation total #ei"hted scoreis 6.84 and the e*ternal factor evaluation total #ei"hted score is 5.D9 causin"

them to fall into the medium ran"e in stron" !osition.

$tren%ths

4. Wal-Mart is a !o#erful retail brand. It has a re!utation for value for mone,convenience and a #ide ran"e of !roducts all in one store.

5. Wal-Mart has "ro#n substantiall over recent ears, and has e*!erienced "lobale*!ansion

6. The com!an has a core com!etence involvin" its use of information technolo" to

su!!ort its international lo"istics sstem. 2or e*am!le, it can see ho# individual!roducts are !erformin" countr-#ide, store-b-store at a "lance. IT also su!!ortsWal-Mart(s efficient !rocurement.

7. / focused strate" is in !lace for human resource mana"ement and develo!ment.Peo!le are &e to Wal-Mart(s business and it invests time and mone in trainin"

!eo!le, and retainin" a develo!in" them.

ea&nesses


16/27

4. Wal-Mart is the World(s lar"est "rocer retailer and control of its em!ire, des!iteits IT advanta"es, could leave it #ea& in some areas due to the hu"e s!an of

control.5. Since Wal-Mart sell !roducts across man sectors Asuch as clothin", food, or

stationarB, it ma not have the fle*ibilit of some of its more focusedcom!etitors.

6. The com!an is "lobal, but has has a !resence in relativel fe# countriesWorld#ide.

Financial 'atio Analysis

3. )e 3nternal-External 43E5 Matrix

)e 3FE otal Weig)ted Score

Strong /verage Wea*

8.0 to 9.0 2.0 to 2.44 .0 to .44

=igh I II III

8.0 to 8.44

Wal-Mart

Medi!$ IB B BI

)e EFE otal

Weig)ted Score

2.0 to 2.44

2

Lo# BII BIII I

.0 to .44

F. SW0 Matrix


17/27

Strengt)s Wea(nesses

. Ongoing develop$ent of itse$plo"ees.2. S!percenters offer one stopshopping.

8.


18/27

:. rend is to#ard s!percenters.

Fecreased C!sto$er Spending.

$trate%iesStren"ths-%!!ortunities AS%B Strate"ies

The SO alternative strategies for Target Corporation are to present their quality produts and philanthropiativities !eause Target an use their reputation for quality produts and servies to pro"ote to todays!etter#eduated and "ore o"forta!le soiety in order to inrease sales to this "ar$et. Target%s effiientdistri!ution syste" &ill allo& the" to provide usto"ers &ith a &ide seletion of options and Target%s"anage"ent tea" identifies the i"portane of orporate soial responsi!ility.

Wea&nesses-%!!ortunities AW%B Strate"iesThe 'O for Target Corporation is to open additional super enters in order to ta$e advantage of thegro&ing eono"y to sell all or part of these divisions in order to "ini"i(e their Target%s finanialperfor"ane and to e)pand into "ar$ets in *e)io and Canada !eause Target is at this ti"e notonerned in foreign "ar$ets and Target should see$ to overo"e is their underperfor"ing divisions thatare not ontri!uting to Target%s gro&th.

Stren"ths-Threats ASTB Strate"iesThe ST for Target Corporation is to needs to develop ne& produts and servies in order to inreaseshare "ar$et seg"ent that &ill help to inrease their on the &hole sales revenues and developing anadvertising progra" to pro"ote their eletroni retailing division target diret.

Wea&nesses-Threats AWTB Strate"iesThe 'T strategies for Target Corporation are to open additional super enters+ e)pand into "ar$ets inCanada and *e)io+ advertise online shopping onveniene and !enefits+ and to sell underperfor"ingdivisions that &ill inrease Target%s a!ility to o"pete &ith e)isting super enters and &ill give the a!ility toinrease sales !y developing this ne& "ar$et and efforts on developing Target division.

ased on the T%WS Matri*, the follo#in" !ossible strate"ies #ere identified$

,ori(ontal -ntegration

*ar$et enetration

*ar$et /evelop"ent

rodut /evelop"ent

Conentri /iversifiation

etrenh"ent

oint enture

Finally:

/s determined b the IE Matri*, Wal-Mart fits into the cate"or of "ro# and build strate"ies.

Thus, the aforementioned strate"ies #ould fit Wal-Mart ver #ell. /ll three of the strate"iesthat #e decided on are "ro# and build t!es. The three strate"ies that Wal-Mart #ould

benefit most from are$ mar&et !enetration, mar&et develo!ment, and !roduct develo!ment.

Mar&et PenetrationThe mar&et !enetration strate" is #hen a com!an is see&in" to increase the mar&et sharefor !resent !roducts or services in !resent mar&ets throu"h "reater mar&etin" efforts. This

is also an a!!ro!riate strate" for Wal-Mart to im!lement because the can ta&e advanta"eof the ban&ru!tc of K-Mart. Throu"h the increase of Wal-Mart(s mar&etin" cam!ai"ns, the

can attract and retain most of K-Mart(s customers. /lso, because K-Mart has been closin"hundreds of stores, Wal-Mart has a distinct advanta"e of controllin" mar&ets #here both

Wal-Mart and K-Mart are located. /lso, because of Wal-Mart(s economies of scale a"ainst itsrivals, the have the !o#er to influence mar&ets in their direction.


19/27

The com!an culture is also #ell suited for this t!e of strate". The mana"ement of Wal-Mart has in"rained in the em!loee(s the core values needed to e*cel at increasin" their

mar&et !enetration. /"ain, their E?@P and Rollbac& cam!ai"ns can readil be diffused intomar&ets #here the do not have as much of a mar&et share as the #ant. This #ill also

have a !ositive im!act on the com!an culture because of the increased o!!ortunitiesavailable to current em!loees. /s their mar&et share increases, the #ould also !robabl

be"in to add to their !roduct offerin"s in that area. This #ill, in turn, allo# em!loees theabilit to "ro# #ith the com!an and be !romoted into hi"her !ositions.

The costs involved #ith mar&et !enetration are not nearl as "reat as #ith mar&etdevelo!ment. Wal-Mart onl needs to increase its mar&etin" cam!ai"ns in the tar"et areas.

/nd a"ain, #ith K-Mart(s unfortunate e*it in man of the same mar&ets as Wal-Mart, thehave an even better chance of success sim!l because the #ill be the onl lar"e discount

retailer in the area. The ma not even have to increase an costs in this t!e of situationsim!l because of the natural reaction of consumers needs. If the #ere "oin" to K-Mart for

!roducts and K-Mart is closed, their natural reaction #ould be to sim!l "o to Wal-Mart.The len"th of time for this t!e of strate" im!lementation can be measured in das. This is

because Wal-Mart alread has a ver lar"e, established mar&etin" cam!ai"n. /ll that the

#ould need to do is reali"n or increase their mar&etin" in the tar"et area. This is a versim!le !rocess of contactin" the local television stations and !urchasin" advertisin" s!ace.

It can also be accom!lished throu"h circular ads and the ne#s!a!er. The runnin" len"th oftime for this strate" can be measured in #ee&s, as Wal-Mart #ould !robabl chan"e theircam!ai"ns !eriodicall.

This is a "ood strate" for Wal-Mart because of the relative ease of success that Wal-Martcan "arner sim!l from advertisin" in areas #here K-Mart stores have closed. This is also a

"ood strate" because it #ill have a !ositive im!act on Wal-Mart(s bottom line #ithout aver lar"e increase in costs. The onl bad as!ect of this cam!ai"n is that other com!etitors

#ill !robabl be doin" the same. Ever sin"le business in that area #ill have to res!ond toWal-Mart(s drive to increase its customer base.

The advanta"es of this strate" are almost immediate results, increased mar&et share,increased sales, and increased consumer reco"nition. ?isadvanta"es of this strate" are

!ossible failure and increase com!etition.

Mar&et ?evelo!mentThe mar&et develo!ment strate" is sim!l the introduction of !resent !roducts or servicesinto ne# "eo"ra!hic areas. This is a ver "ood strate" for Wal-Mart because it is in line

#ith its core values. Wal-Mart has man areas of o!!ortunit to e*cel #ith this strate",both at home and abroad. The have the needed ca!ital and human resources to e*!and,

the are ver successful in their industr, and there are several unta!!ed and unsaturatedmar&ets still available. This is also an a!!ro!riate strate" because of the increased

com!etition that the retailGdiscount industr is facin". While Wal-Mart is at the to!, the areincreasin"l seein" their com!etition move closer to dethronin" their !osition.

The com!an(s culture alread is rece!tive to this t!e of strate". The have beene*!andin" their reach in all facets of their business for ears. This t!e of strate" allo#s

for current em!loees to be !romoted b relocatin" to ne# stores, have increased roles in

the success of ne# locations, and be a !art of a #innin" or"ani0ation. /lso, because of the

societal influence that Wal-Mart has, the can im!rove the +ualit of life in the areas ofe*!ansion. This is a ver im!ortant as!ect of Wal-Mart as discussed #ith their scholarshi!

and communit donations.The costs of this strate" are ver hi"h. ecause this #ould involve constructin" ne#

buildin"s and or"ani0in" ne# distribution net#or&s, Wal-Mart has to !lan for this #ith theutmost attention to detail. This is not a ver lar"e !roblem for Wal-Mart, thou"h, because

the have the financin" available to do 'ust about anthin". The t!ical store covers over498,888 s+uare feet, and re+uires a lot of !lannin" before the construction be"ins.


20/27


21/27

ecause of Wal-Mart(s e*tremel efficient distribution sstem, the #ould be able toundercut all of the businesses in the same line of #or&.

The advanta"es of this strate" are increased mar&ets, increased sales, increased incomes,and increased customer loalt. The disadvanta"es of this strate" are that it #ill ta&e a#a

local 'obs, it #ill be e*!ensive to im!lement over the entire com!an.Strate" Selection

Wal-Mart #ould be most successful b !ursuin" the mar&et penetration strate%y. This isthe best strate" because it is the easiest and least costl o!tion. Wal-Mart has man

advanta"es to choosin" this s!ecific strate" over the other ones. While most of theadvanta"es overla! bet#een the different strate"ies, #e believe because of the costs of

choosin" one of the other strate"ies, this one is the best.ecause of the !otential for e*!andin" too fast and ta&in" on too much debt, Wal-Mart

should not choose the mar&et develo!ment strate". This strate" is a "ood one, but theresults could be ver !ositive or ver ne"ative, #hereas #ith the mar&et !enetration

strate", the results could be ver !ositive or 'ust some#hat ne"ative.The mar&et !enetration strate" is also the sim!lest strate" for Wal-Mart to im!lement.

ecause of the financial state of K-Mart, Wal-Mart can have an immediate im!act on its

bottom line 'ust b advertisin" is those selected mar&ets #here both stores e*ist. /lso, Wal-Mart has ver distinct advanta"es as outlined in their internal stren"ths. /mon" the most

im!ortant are the E?@P and Rollbac& !ro"rams. These #ill allo# the mar&et !enetrationstrate" to succeed to the fullest since Wal-Mart can out !rice an of the local com!etition.We feel that the !roduct develo!ment strate" is also a "ood strate", but not the best

because of its s!ecific costs. /s discussed earlier, the costs to retool and u!date theire+ui!ment can be e*tremel hi"h in order for Wal-Mart to "ain a distinct advanta"e in their

divisions. /lso, the #ould have to create an entire ne# mar&etin" cam!ai"n for thesedistinct services.

". S%ACE Matrix

Strategic %osition 6 Action Evaluation 4S%ACE5 Matrix

It is another im!ortant Sta"e 5 matchin" tool and its four-+uadrant frame#or& indicates$4. /""ressive

5. Conservative6. ?efensive

7. Com!etitive

%verall Strate"ic !osition determined b$1. inanial Strength S2. Co"petitive dvantage C3. 7nviron"ental Sta!ility 7S4. -ndustry Strength -S

F37A7C3A' SRE7"8

Wal-Mart Corp. had 4.;J sales gro#th in 200 co$pared to 2.;J for co$para&le storesWal-Mart Corp. gross profit $argin increased to .82 in 200 fro$ .8 in 2000

:5

Average score 9or 9inancial strengt) /./

37D:SR; SRE7"8


22/27


23/27

2. Overo"e internal &ea$nesses and3. void e)ternal threats.

'al#*art a finanially strong fir" that has ahieved "a9or o"petitive advantages in a gro&ing and sta!leindustry.

The appropriate Strategies in SPACE matrix

enass walmart

Documents