Wal-Mart E-Business Analysis

In: Business and Management

Submitted By balian25
Words 2445
Pages 10
Walmart: E-business Analysis
Dustin Cooper
Intro to Information Systems
Professor Young Bao Choi
August 29, 2011

An E-Business Analysis of Walmart Walmart is the world’s largest company and quite possibly the most powerful retailer. Walmart began as strictly a brick and mortar store but has advanced into click and mortar over the last five decades. Walmart may soon become a major competition for huge online only retailers like Amazon. The recent acquisitions by Walmart are sure to be placing this retailer in place for an online invasion of epic proportions. Walmart was started by Sam Walton in rural Arkansas in 1962. Sam Walton had previously owned a franchise in the Ben Franklin stores since 1944 and also opened a small chain of stores called Walton’s 5 & 10. Sam Walton was extremely industrious and had a knack for increasing sales in businesses. His ability to find ways to slash prices to the lowest bottom line is the reason for the success of Walmart. (Sam Walton, 2009) Walmart stores have been geared toward the low-income customer segment. The concept of frugality is the central tenet of the company. Even the Walmart headquarters is a drab and plain building in a small town in central Arkansas. There are no luxuries at the headquarters and it is not based in a fancy big city. During the recent downturn of the world economy when other businesses were going under, Walmart had reported sales growth of 11%, amounting to $6.4 billion. Walmart has also made some very wise investments in other countries, and has expanded the Walmart concept in faraway places like Germany, South Korea, China and the United Kingdom. In 1986, Walmart had completed their own satellite network, a private satellite network, which allowed the corporate office to track inventory, sales, and send instant communication to their stores." (Walmart, 2011) They also equipped 90%…...

Similar Documents

Wal-Mart Analysis

...Case Study: Wal-Mart and Bharti Transforming Retail in India Executive Summary This paper is an analysis and evaluation of Wal-Mart and the future venture into the retail sector of India. The challenges that Wal-Mart needs to resolve to become successful range from the cultural differences to problems with supply chain management in India. The analysis below identifies the challenges of many factors dealing with the Wal-Mart, Bharti and the Indian retail sector. These factors for Wal-Mart would deal with the ability to operate in India efficiently as they do in the US. In addition, Wal-Mart to be successful will have to sort out problems with the government, culture differences and the partnership with Bharti. These factors for Wal-Mart and Bharti will be presented in more specific detail through a SWOT analysis. The analysis will evaluate Wal-Mart as a company in relation to the future operation in the Indian market. Then the Bharti Company will be analyzed using a SWOT to pin point how the company will fit into the overall plan of Wal-Mart operating in India. The report will further evaluate the Indian retail sector through a competitive industry analysis using the Porter’s 5 forces model. This model will detail the threats to the market entry, supplier power, buyer power, availability of substitutes and competitive rivalry as they relate to the India retail sector. The report will then offer alternatives for the Wal-Mart company. These alternatives would include not......

Words: 315 - Pages: 2

Wal-Mart Analysis

...Wal-Mart Analysis Axia University of Phoenix ECO 365 May 04, 2013 Wal-Mart Analysis Wal-Mart is one of the biggest retailer stores in the United States and throughout the world. Since 1962 Wal-Mart has grown from a small business into a successfully large business. For Wal-Mart to have achieved such success Wal-Mart has gone through market structure change, price change, productivity, and many other changes and challenges. Wal-Mart’s first priority is to have lower prices around the country and worldwide. To understand the success of a business one would need to have its market analysis. Market analysis includes productivity, market structure, price, technology, competitors, wages, benefits, supply and demand, etc… Wal-Mart is to be considered a perfect competition market structure. Wal-Mart is known throughout the United States as well as worldwide (“Wal-Mart,”2-12). Because Wal-Mart is a retail store providing goods and services to the consumers that can also be provided by another store and is one of the reasons Wal-Mart is considered a perfect competition market. There are retail stores all over that offer the same or similar products that Wal-Mart offers and all products give or take a few cents provide similar pricing; however not all stores offer similar services such as optical, pharmacy, automotive, making Wal-Mart a one stop kind of shop. These types of retail businesses are relatively easy to enter and exit the market without hardship.......

Words: 2036 - Pages: 9

Wal-Mart & Costco Analysis

...Porter’s five forces model. The analysis will then narrow the industry into segments and focus on how key players in the segment exhibit distinct advantages. A discussion will follow on how the leading company achieves competitive advantage by means of their distinct competencies and whether they can sustain it over time. The chosen industry for this report is the retail industry, specifically the discount merchandiser segment. The key companies discussed in this paper will be Costco and Wal-Mart, two of the biggest discount merchandisers in the USA. While Costco and Wal-Mart operate under two very separate business models, they carry similar products and compete in similar geographical areas. The life cycle stage of this industry is in the mature stage where the market is now saturated with notable players aside from the two mentioned. Growth in this market is demonstrated by expanding into different geographic and other markets to increase their overall market shares. Under the maturity life stage, minimizing cost and expansion into different segments can develop a competitive advantage over other big box retailer competitors. Currently, Wal-Mart is the industrial and segment leader because of its ability to minimize their expenses and expand quickly in global and online markets. Wal-Mart Wal-Mart is a mass-market retailer operating in three segments: Wal-Mart USA, Wal-Mart International and their online stores. Their different business models including......

Words: 2612 - Pages: 11

Supply and Demand Analysis of Wal-Mart

...Lovelle McDonald Supply and Demand Analysis of Walmart Wal-mart franchises are stores of convince because they feature many items in every department. Customers do not have to go another store to get automobile supplies, house and garden, or produce. There are still stores people may need to go to because Wal-mart does not supply them, but they do supply the majority of what the customers need. They have many venues that keep them afloat with supply and demand. Technology plays a huge part in keeping the supply chain of Wal-mart together. Wal-mart became an (Traub, 2012) innovator in technology the way it structured on how stores keep track of their inventory. The Walmart stores does not have to stock their shelves on the assumption of what customers need, but will restock on the customer’s demands on what they want and is needed. The demand of the supply chain in Wal-mart has goals set in place to manage their companies. Their strategy consist (Wal-mart Keys to Succesful Supply Chain Managment, 2014) of four components vendor partnerships, cross docking, distribution management, technology and integration. Cross docking has to do with the technology where this innovation get the products to different Walmart stores. Wal-mart believes in keeping their prices at a low cost and are willing to do business with manufactures who are willing who are able to keep up with the demand the of customer. The strategy of Wal-mart is to keep their competitive prices and remain a......

Words: 320 - Pages: 2

Wal-Marts Organizational and Business Style

...cultural values. A major social cultural trend is the continued growth of suburban communities. The increasing number of people living in the suburbs has a number of effects. Walmart continues expanding its current store capacity to include new products and services for customers. Walmart will build new supercenters in previously unexplored regions in Canada, which includes plans for 37 new stores in the next fiscal year). In America alone, Walmart established 4,017 stores in central and convenient locations to serve communities. Walmart must carefully analyze the business-related polices. Competition laws, taxation laws, and labor training laws are areas in which policies can affect Walmart’s operation and profitability a lot. Walmart is facing an issue regarding discrimination of employees based on their gender. Women are discriminated by not allowing them to sit in supervisory and managerial levels (Walmart: An Analysis, 2008). There are said to be pending lawsuits waiting for Walmart's notions as the company has allegedly went against the labor laws. This negative reputation could result in a loss of competitive advantages, sales, and possibly Walmart’s reputation as the world’s leading retail company. For Walmart, demographic segments are analyzed on a global basis, because it operates internationally. Demographic segments is concerned with many areas such as population size, age structure and geographic distribution. Walmart is using its wealth of sales and......

Words: 1655 - Pages: 7

Wal-Mart, an Organizational Analysis

...Wal-Mart, an Organizational Analysis Kenneth Russell Strayer University Dr. Mary Tranquillo Bus. 310 November 6, 2012 Wal-Mart, an Organizational Analysis Introduction I will thoroughly discuss in detail the operation of Wal-Mart, the company’s strategies, legal concerns and various challenges the company faces. In addition, I will address any current (or anticipated) human resource issues concerning the expanding into the international market and make recommendations on how the organization can leverage its human resources to come out on top in a highly competitive market. Wal-Mart, an Organizational Analysis Describe the nature of the organization, its size, and any specific human resource challenges it faces. One of the most recognized retail chains around the world, Wal-Mart is an American public multinational corporation running chains of large discount and warehouse stores. Considered the largest public corporation when ranked by revenue, Wal-Mart boasts a staggering 2 million employees worldwide with approximately 1.4 million in the United States. (Wal-Mart, 2012). Wal-Mart is known for their brand of low prices and high volume which dominates the retail market. Wal-Mart’s mission statement and slogan sums it up in one simple phrase: “We save people money, so they can live better”. Wal-Mart’s idea and strategy is targeted at offering consumers a variety of name brand goods at competitive prices. Wal-Mart has over 10, 300 retail stores in 27......

Words: 1511 - Pages: 7

Strategic Management Analysis for Wal-Mart

...WAL-MART STORES, INC Step 1: Identify the Firm’s Existing Vision, Mission, Objectives, and Strategies. Vision and Mission: There is no formal vision and mission of Wal-Mart available in this case study. Objective: Wal-Mart is a retail store that strives to excellently serve, respect and focus on both domestic and international customer by providing every-day low prices’ general merchandise to satisfy customers’ needs and help customers to save money. Strategies: 1. Forward Integration * Wal-Mart acquired four stores and six sites from Makro, the Korean Club store retailer. (pg 614) 2. Horizontal Integration * Wal-Mart had acquired entrenched, dominant player, the Wertkauf hypermarket chain in Germany. (pg 611) * Wal-Mart acquired 229 stores of Asda Group PLC, the UK’s third largest supermarket chain. (pg 615) 3. Product Development * Wal-Mart reported experimenting internationally with new operational elements, including jewelry, one-hour photos, optical labs, and online home-delivery programs. (pg 605) 4. Market penetration * Wal-Mart plans to add another 50 German stores by the year 2003. (pg 614) * Wal-Mart plans to open 120-130 new stores in existing international markets. (pg 616) * Wal-Mart announced plans to open 44-55 new stores, 200 new Supercenters, 20-25 new Neighborhood Markets, and 40-45 new Sam’s Clubs. (pg 616) 5. Cost Leadership * Wal-Mart foresaw opportunities to serve customers in other countries, using its......

Words: 7179 - Pages: 29

Wal-Mart Financial Success/Failure Analysis

...Wal-Mart Financial Analysis Well everyone knows the history of Walmart, the great American success story, or do you? Let me fill you in. In 1950s Sam Walton opened his first store in Arkansas with the believe in fair play and providing American produce goods at low prices and undercutting his competition by keeping his profit margin even lower. Mr. Walton was able capitalize on this philosophy through cultivate his business and leveraging capital by means of encouraging managers and associates to take advantage of his situation and become stakeholders thereby inspiring the manager’s and associates to improve their skill sets and take ownership and pride in the business. In the 60’s, the first true Wal-Mart open its doors permanently. By the 80’s Walmart was a billion dollar company with stores operating across 28 states. (http://walmart1percent.org/) Today Wal-Mart is the largest corporation in the world employing 2.3 million people (Dun & Bradstreet, 2014, para. 1) However todays Wal-Mart does not share Sam Walton visions or his values. Today Wal-Mart does whatever it needs to maximize revenue at the expense of its employees and customers. Today’s Wal-Mart has little or no respect for their employees. For the majority of their employees’ wages lower than their closest competitors (Costco and Target) since Wal-Mart encourage their employees to get on government funded programs such as food stamps, Medicaid, and public housing thereby passing some of their......

Words: 1741 - Pages: 7

Business and Management Wal-Mart

...Human Resource Management Foundation – HRM 500 1. How well do you think Wal-Mart’s earlier, more limited health benefits supported the company’s overall business strategy? I feel Wal-Mart’s earlier, limited health benefits did not support the company’s overall business strategy because, in order for employees to want to work for a specific employer, employees must feel they are making a difference in his/her position. Employees must also feel that the organization is meeting some of their important needs. Employees place value in job satisfaction for example, employee earnings and benefits. ‘A job is the primary source of income and financial security for most people” (Noe. 2009, p.294). An employee expects a fair salary for the work he/she performs. If the employee feels his/her pay is not equal or comparable to others, who are doing the same job, can cause the employee to feel a sense of unfairness and dissatisfaction. An employee who feels the organization supports their individual needs are more motivated in displaying positive behaviors and working relationships. When an employee feels good about his/her employer it shows in his/her performance. Employees are more engaged in their position when the organization presents a pleasant working environment and opportunities for growth. One of Wal-Mart’s expectations of their employees is to provide superior customer service. Employees who are satisfied with their job and the organization are more committed and......

Words: 310 - Pages: 2

Analysis of Accounting Policec of Wal-Mart

...Flags After analyzing Wal-Mart’s annual report for 2010, attention has been brought to several items that require closer examination. A common “red flag” to questionable accounting has been found within Wal-Mart’s statement of cash flows and income statement. There is an increasing gap between the company’s reported income and the cash flow from operating activities. In the year 2008 reported income and cash flow from operating activities differed by $484 million. However the difference increased a considerable $2,249 and $4,183 billion in the years 2009 and 2010 respectively. This increasing gap is a significant warning sign that the company may be changing accrual estimates. Another factor to consider when analyzing Wal-Mart’s financial position is the firm’s uncertain tax position. At the current time, Wal-Mart has $1.0 billion of unrecognized tax benefits related to continuing operations. However note 8 of the consolidated financial statements observe, “During the next 12 months, it is reasonably possible that tax audit resolutions could reduce unrecognized tax benefits by between $350 million and $500 million, either because the tax positions are sustained on audit or because the company agrees to their disallowance.” The company also states that any change should not have a significant change on financial position; however in my opinion an investor should not over look this red flag. * Step two: Identify Principal Accounting Policies Wal-Mart has several......

Words: 2357 - Pages: 10

Wal-Mart Case Analysis

...Strategically, Wal-Mart positioned itself to cater to population that lived in small towns having no other discount stores nearby with everyday low prices and greater variety of goods. 33% of its stores operated in metropolitan areas with few competitors enabling Wal-Mart to command 10-20% of total retail sales compared to non-metropolitan areas with 12% gross margins. By lowering expenses in key areas (advertising, COGS, SG&A expenses) and with competitive pricing, Wal-Mart was able to drive up sales and reap superior profits compared to other competitors in the market. The remainder of this paper analyzes in detail the various components of Wal-Mart’s cost structure which formed the core to its high profitability. Cost structure (1984) of Wal-Mart with respect to industry average is as below: Discounting Industry Economics Wal-Mart Economics in 1984 ($ in millions) Net Sales 100.0% $ 6,401 100.0% *Exhibit 1 License fees and other income 1.1% $ 52 0.8% *Exhibit 1 Cost of goods sold 71.9% $ 4,722 73.8% *Exhibit 1 Payroll expense 11.2% $ 645 10.1% *10.1% in 1985 - p.7 Advertising expense 2.3% $ 70.4 1.1% *$16.3 million in 1985 - p.6 Rental expense 2.2% $ 120 1.9% *1.8% + 0.1% in 1980's - p. 4 Miscellaneous expense 7.6% $ 346 5.4% *Calculated from difference Operating income 5.9% $ 550 8.6% *Exhibit 1 - Earnings before interest and taxes - $271 + $231 + $48 Net income 2.7% $ 271 4.2%...

Words: 1094 - Pages: 5

Wal-Mart Strategic Analysis

...Wal-Mart: Strategic Plan [pic] Strategic Plan Saren Thompson BUS 413 TABLE OF CONTENTS Introduction Page 3 Mission Statement Page 4 Macro-Environmental Analysis Economics Page 5 Demographics Page 6 Socio-Culture Page 8 Political/ Regulatory Page 11 Technological Page 13 Micro-Environmental Analysis Industrial Page 14 Markets Page 16 Competition Page 18 Supplier Page 19 Resources Page 20 Preferences Page 22 Opportunities and Threats Strengths and Weaknesses Page 23 Opportunities and Threats Page 25 Opportunity Analysis Page 27 Alternative Strategies Formulation Page 28 Ranking Strategies Page 28 References Page 29 INTRODUCTION Wal-Mart is the top retail company in the United States and has grown from a small customer centered store in Arkansas to an International Retail Store. This company was founded in the 1962 by Sam Walton. Walton and wife Helen put up 95 percent of the money for the first Wal-Mart store in Rogers, Arkansas. He traveled abroad to study retail and believed it was the future. His company began a success and the Wal-Mart empire began when it was incorporated October 31, 1969. Wal-Mart stock was first traded over the counter as publicly-held company in 1970. Since Wal-Mart has had eleven 100 percent stock split as of March of 1999. The company has grown to new levels and I hope to introduce and inform throughout this paper. ...

Words: 6119 - Pages: 25

E Commerce at Wal-Mart

...To: From: In Reference to: E-Commerce at Wal-Mart: The Future Success or Failure · E-commerce leads to large profits · Our core values are exemplified through e-commerce · 1999 was a pivotal year in Wal-Mart e-commerce · Before 1999 Wal-Mart.com was underperforming · Our companies target audience became major e-commerce players in 1999 · Wal-Mart.com lowered customer-borne transaction costs · Already established distribution channels allow for a competitive edge · Market power more easily obtained due to ability to drive down prices · Ease of delivery and return allowed for greater interest over competitors · Partnerships with experts in the field of direct delivery boosted efficiency and understanding of e-commerce shipping · Diversifying through e-commerce reduces potential market volatility · Storage warehouses can lead to large savings with seasonal/miscellaneous items through e-commerce · Millennials are turning to online outlets rather than “brick and mortar” · International sales growth possibilities are vast · Lower need for physical retail outlets will lead to greater profit margins due to reduced expenses Wal-Mart has grown to be, over the year’s one of the largest retail companies in the world. From humble beginnings in 1962 to the global supergiant we have become today it is important to understand the steps that have led to the overall success of the company, while not falling into the same traps and learning from our mistakes as a company...

Words: 1688 - Pages: 7

An E-Business Analysis of Walmart

...An E-Business Analysis of Walmart Patricia Brandon-Garst E-Business Professor Victor Olufeso August 29, 2011 An E-Business Analysis of Walmart Walmart is the world’s largest company and quite possibly the most powerful retailer. Walmart began as strictly a brick and mortar store but has advanced into click and mortar over the last five decades. Walmart may soon become a major competition for huge online only retailers like Amazon. The recent acquisitions by Walmart are sure to be placing this retailer in place for an online invasion of epic proportions. Walmart was started by Sam Walton in rural Arkansas in 1962. Sam Walton had previously owned a franchise in the Ben Franklin stores since 1944 and also opened a small chain of stores called Walton’s 5 & 10. Sam Walton was extremely industrious and had a knack for increasing sales in businesses. His ability to find ways to slash prices to the lowest bottom line is the reason for the success of Walmart. (Sam Walton, 2009) Walmart stores have been geared toward the low-income customer segment. The concept of frugality is the central tenet of the company. Even the Walmart headquarters is a drab and plain building in a small town in central Arkansas. There are no luxuries at the headquarters and it is not based in a fancy big city. During the recent downturn of the world economy when other businesses were going under, Walmart had reported sales growth of 11%, amounting...

Words: 2447 - Pages: 10

Wal-Mart Analysis

...Alex Fedoruk MGMT 434 February 12, 2012 Discussion of Wal-Mart Stores, Inc. How did Wal-Mart change the relationship between the producer and the retailer? What exactly did Wal-Mart do? Wal-Mart alone changed this dynamic away from the old “push” system and toward a “pull” system in which the retailer tells the manufacturer what to produce and how much. Companies have little room to negotiate when it comes to partnering up with Wal-Mart. Because of its inventory system’s unmatched efficiency and accuracy, Wal-Mart knows exactly what to buy and exactly how much to pay for it. To which concepts studied in the course are Wal-Mart’s actions with Rubbermaid most relevant? In the relationship with Rubbermaid, concepts that were touched on were cost leadership, lower price bargains, and loss of buying/purchasing power. In this case, Rubbermaid’s cost of business went up and they had to adjust for that increase by increasing their prices while supplying Wal-Mart. Wal-Mart did not want to agree to the price increase and pulled Rubbermaid’s products of their shelves. This in the long run hurt the Rubbermaid business. Fedoruk 2 How do Wal-Mart’ actions relate to what you studied in Chapters 3 and 4? Make reference to specific concepts from the chapter. Wal-Mart recognizes that strategic competitiveness and above-average returns result only when core competencies matched with opportunities. Wal-Mart’s competitive advantage is that it is able to obtain cost –efficient......

Words: 649 - Pages: 3