Menu

Wal Mart Stores Inc Case Study Help

Case Study Solution And Analysis


Home >> Ivey >> Wal Mart Stores Inc >>

Wal Mart Stores Inc Case Study Help

Wal Mart Stores Inc is presently among the most significant food chains worldwide. It was established by Ivey in 1866, a German Pharmacist who initially launched "FarineLactee"; a mix of flour and milk to feed babies and decrease death rate. At the very same time, the Page brothers from Switzerland likewise discovered The Anglo-Swiss Condensed Milk Company. The two became competitors in the beginning but later combined in 1905, resulting in the birth of Wal Mart Stores Inc.
Business is now a multinational business. Unlike other multinational business, it has senior executives from different nations and attempts to make choices thinking about the entire world. Wal Mart Stores Inc presently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The function of Wal Mart Stores Inc Corporation is to improve the lifestyle of people by playing its part and supplying healthy food. It wants to help the world in forming a healthy and much better future for it. It likewise wishes to encourage people to live a healthy life. While making sure that the company is being successful in the long run, that's how it plays its part for a better and healthy future

Vision

Wal Mart Stores Inc's vision is to provide its consumers with food that is healthy, high in quality and safe to eat. Business envisions to develop a well-trained labor force which would help the business to grow
.

Mission

Wal Mart Stores Inc's objective is that as presently, it is the leading company in the food industry, it believes in 'Great Food, Excellent Life". Its mission is to provide its consumers with a range of choices that are healthy and best in taste too. It is concentrated on supplying the best food to its customers throughout the day and night.

Products.

Wal Mart Stores Inc has a wide variety of products that it uses to its customers. In 2011, Business was noted as the most rewarding organization.

Goals and Objectives

• Bearing in mind the vision and objective of the corporation, the company has set its objectives and objectives. These objectives and goals are listed below.
• One objective of the business is to reach zero land fill status. (Business, aboutus, 2017).
• Another objective of Wal Mart Stores Inc is to waste minimum food during production. Usually, the food produced is squandered even prior to it reaches the consumers.
• Another thing that Business is working on is to enhance its product packaging in such a way that it would help it to reduce the above-mentioned issues and would also ensure the delivery of high quality of its items to its customers.
• Meet worldwide requirements of the environment.
• Construct a relationship based on trust with its customers, company partners, workers, and federal government.

Critical Issues

Recently, Business Company is focusing more towards the method of NHW and investing more of its earnings on the R&D technology. The nation is investing more on acquisitions and mergers to support its NHW strategy. However, the target of the company is not accomplished as the sales were anticipated to grow greater at the rate of 10% per year and the operating margins to increase by 20%, given in Exhibit H. There is a requirement to focus more on the sales then the innovation technology. Otherwise, it may result in the decreased income rate. (Henderson, 2012).

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The present Business method is based on the idea of Nutritious, Health and Health (NHW). This technique deals with the concept to bringing change in the client choices about food and making the food stuff much healthier worrying about the health issues.
The vision of this strategy is based on the secret technique i.e. 60/40+ which just implies that the products will have a score of 60% on the basis of taste and 40% is based upon its nutritional worth. The items will be manufactured with extra dietary worth in contrast to all other products in market gaining it a plus on its nutritional content.
This strategy was embraced to bring more delicious plus healthy foods and drinks in market than ever. In competitors with other business, with an intention of maintaining its trust over clients as Business Business has actually gained more trusted by customers.

Quantitative Analysis.

R&D Spending as a portion of sales are decreasing with increasing actual amount of spending reveals that the sales are increasing at a higher rate than its R&D costs, and enable the business to more spend on R&D.
Net Earnings Margin is increasing while R&D as a portion of sales is declining. This sign also reveals a green light to the R&D spending, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D advancement rather than payment of debts. This increasing financial obligation ratio position a danger of default of Business to its financiers and might lead a declining share costs. In terms of increasing financial obligation ratio, the company must not invest much on R&D and must pay its existing financial obligations to reduce the danger for financiers.
The increasing danger of investors with increasing financial obligation ratio and declining share rates can be observed by substantial decline of EPS of Wal Mart Stores Inc stocks.
The sales development of business is also low as compare to its mergers and acquisitions due to slow perception structure of customers. This sluggish growth likewise hinder business to further invest in its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Keep in mind: All the above analysis is done on the basis of calculations and Charts given in the Displays D and E.

TWOS Analysis


2 analysis can be utilized to obtain various strategies based upon the SWOT Analysis given above. A quick summary of TWOS Analysis is given up Exhibit H.

Strategies to exploit Opportunities using Strengths

Business must introduce more ingenious items by big amount of R&D Costs and mergers and acquisitions. It might increase the market share of Business and increase the earnings margins for the company. It might also supply Business a long term competitive benefit over its competitors.
The global growth of Business need to be focused on market capturing of developing countries by expansion, attracting more customers through customer's loyalty. As developing nations are more populous than developed nations, it might increase the client circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Swot AnalysisWal Mart Stores Inc needs to do careful acquisition and merger of organizations, as it could impact the customer's and society's perceptions about Business. It ought to obtain and merge with those companies which have a market track record of healthy and nutritious companies. It would enhance the understandings of consumers about Business.
Business needs to not just spend its R&D on innovation, rather than it needs to also concentrate on the R&D costs over examination of cost of various healthy products. This would increase cost efficiency of its items, which will lead to increasing its sales, due to decreasing costs, and margins.

Strategies to use strengths to overcome threats

Business must move to not only establishing but likewise to developed nations. It needs to widens its geographical expansion. This broad geographical growth towards developing and established nations would decrease the danger of potential losses in times of instability in numerous countries. It ought to broaden its circle to various countries like Unilever which operates in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

Wal Mart Stores Inc needs to wisely manage its acquisitions to prevent the danger of misunderstanding from the customers about Business. It should obtain and combine with those nations having a goodwill of being a healthy company in the market. This would not only improve the perception of consumers about Business but would also increase the sales, revenue margins and market share of Business. It would also allow the business to utilize its possible resources effectively on its other operations instead of acquisitions of those organizations slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based on 4 aspects; age, gender, earnings and profession. Business produces numerous items related to infants i.e. Cerelac, Nido, and so on and related to grownups i.e. confectionary items. Wal Mart Stores Inc items are rather budget friendly by practically all levels, however its major targeted consumers, in regards to earnings level are middle and upper middle level consumers.

Geographical Segmentation

Geographical division of Business is composed of its presence in almost 86 nations. Its geographical segmentation is based upon 2 primary aspects i.e. typical earnings level of the consumer as well as the climate of the area. For example, Singapore Business Company's segmentation is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and lifestyle of the customer. Business 3 in 1 Coffee target those customers whose life style is quite hectic and do not have much time.

Behavioral Segmentation

Wal Mart Stores Inc behavioral segmentation is based upon the attitude knowledge and awareness of the customer. Its extremely healthy products target those consumers who have a health mindful attitude towards their consumptions.

Wal Mart Stores Inc Alternatives

In order to sustain the brand in the market and keep the client undamaged with the brand name, there are 2 choices:
Alternative: 1
The Company ought to spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the company, increasing the wealth of the company. However, costs on R&D would be sunk cost.
2. The business can resell the obtained systems in the market, if it stops working to execute its method. However, quantity invest in the R&D might not be restored, and it will be thought about totally sunk expense, if it do not give prospective outcomes.
3. Investing in R&D provide sluggish development in sales, as it takes long period of time to introduce a product. However, acquisitions provide quick results, as it offer the business currently developed product, which can be marketed not long after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the business's worths like Kraftz foods can lead the business to face misconception of customers about Business core worths of healthy and healthy products.
2 Large costs on acquisitions than R&D would send out a signal of company's inefficiency of establishing innovative products, and would lead to customer's dissatisfaction as well.
3. Large acquisitions than R&D would extend the line of product of the company by the items which are currently present in the market, making business not able to present new ingenious items.
Alternative: 2.
The Business ought to invest more on its R&D instead of acquisitions.
Pros:
1. It would enable the business to produce more innovative items.
2. It would provide the business a strong competitive position in the market.
3. It would make it possible for the business to increase its targeted customers by presenting those items which can be provided to an entirely brand-new market sector.
4. Innovative products will provide long term benefits and high market share in long run.
Cons:
1. It would decrease the revenue margins of the business.
2. In case of failure, the entire spending on R&D would be considered as sunk expense, and would affect the business at large. The threat is not in the case of acquisitions.
3. It would not increase the wealth of business, which might offer a negative signal to the investors, and could result I declining stock prices.
Alternative 3:
Continue its acquisitions and mergers with considerable spending on in R&D Program.
Vrio AnalysisPros:
1. It would allow the business to introduce new ingenious products with less risk of transforming the spending on R&D into sunk expense.
2. It would offer a positive signal to the financiers, as the total assets of the business would increase with its considerable R&D costs.
3. It would not affect the profit margins of the business at a big rate as compare to alternative 2.
4. It would offer the business a strong long term market position in regards to the business's general wealth in addition to in terms of ingenious products.
Cons:
1. Risk of conversion of R&D costs into sunk expense, higher than alternative 1 lower than alternative 2.
2. Risk of misconception about the acquisitions, greater than alternative 2 and lesser than alternative 1.
3. Introduction of less variety of innovative products than alternative 2 and high number of ingenious items than alternative 1.

Wal Mart Stores Inc Conclusion

RecommendationsBusiness has remained the leading market player for more than a decade. It has institutionalized its methods and culture to align itself with the marketplace modifications and customer behavior, which has eventually enabled it to sustain its market share. Though, Business has developed considerable market share and brand name identity in the metropolitan markets, it is suggested that the business must concentrate on the rural areas in regards to developing brand name loyalty, awareness, and equity, such can be done by creating a particular brand allowance technique through trade marketing methods, that draw clear difference between Wal Mart Stores Inc items and other competitor products. Wal Mart Stores Inc needs to utilize its brand image of safe and healthy food in catering the rural markets and also to upscale the offerings in other classifications such as nutrition. This will enable the company to develop brand name equity for recently presented and already produced products on a higher platform, making the efficient usage of resources and brand name image in the market.

Wal Mart Stores Inc Exhibits

PESTEL Analysis
P
Political
E
Economic
S
Social
T
Technology
L
Legal
E
Environment
Governmental assistance

Altering criteria of worldwide food.
Improved market share.
Altering understanding towards healthier products
Improvements in R&D and QA divisions.

Intro of E-marketing.
No such impact as it is favourable.
Issues over recycling.

Use of sources.

Competitor Analysis
Business Unilever PLC Kraft Foods Incorporation DANONE
Sales Growth Highest given that 1000
Highest after Business with much less development than Company 6th Cheapest
R&D Spending Greatest considering that 2005 Highest after Organisation 2nd Cheapest
Net Profit Margin Highest because 2009 with rapid development from 2003 to 2013 Because of sale of Alcon in 2011. Virtually equal to Kraft Foods Incorporation Virtually equal to Unilever N/A
Competitive Advantage Food with Nutrition and also health variable Greatest number of brand names with sustainable techniques Biggest confectionary and processed foods brand in the world Biggest milk items as well as bottled water brand worldwide
Segmentation Center and also top center degree consumers worldwide Specific clients in addition to household group Any age as well as Revenue Customer Groups Middle as well as upper middle degree consumers worldwide
Number of Brands 3rd 8th 4th 7th

Quantitative Analysis​
Analysis of Financial Statements (In Millions of CHF)
2006 2007 2008 2009 2010
Sales Revenue 27368 333226 348299 969344 535647
Net Profit Margin 7.39% 5.69% 88.92% 3.29% 68.51%
EPS (Earning Per Share) 16.87 5.98 9.66 3.49 26.84
Total Asset 643876 272555 693612 737123 35118
Total Debt 99446 81923 88144 79997 85165
Debt Ratio 53% 49% 27% 47% 65%
R&D Spending 9825 4696 9451 3171 2558
R&D Spending as % of Sales 1.12% 4.89% 4.61% 1.52% 6.23%

Wal Mart Stores Inc Executive Summary Wal Mart Stores Inc Swot Analysis Wal Mart Stores Inc Vrio Analysis Wal Mart Stores Inc Pestel Analysis
Wal Mart Stores Inc Porters Analysis Wal Mart Stores Inc Recommendations