Walmart-Final2 - Wal-Mart Stores, Inc Under Attack...

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Wal-Mart Stores, Inc Under Attack International Strategic Management Prof. Gregory BUS495a October 2, 2008 - 1 -
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Executive Summary The “Everyday low prices” and “people first” Wal-Mart philosophy have recently been put under a microscope by top management initiatives from Wal-Mart after the criticisms the company received. The establishment of the new position of Senior Director of Stakeholder Engagement in February 2006 intended to create a strategic position for the company that conveyed more societal interest. In March 2006 top management included a Global Ethics Director among their top officers to ensure that their retail code of conduct was being properly applied in the company’s operations and make up for the different issues the company’s reputation was suffered from. Some these issues and weaknesses are the company’s fading reputation, numerous legal and environmental issues the company is facing, huge span of control, and the low stock price. On the other hand, as the biggest retailer in the world, Wal-Mart has significant strengths - a strong market position in USA, economies of scale, strong supply chain network, and an efficient IT structure, which is one of the distinctive competencies of the company. Because of its technological expertise, Wal-Mart is the leader in low cost distribution as well as in backward integration on the value-chain, another distinctive competency of the company. The company’s supply chain management is also world-class as it posses both inbound logistics and a satellite network that provides real time point-of-sale data as outbound logistics. Os a whole, the company is managing successfully all of the value chain activities. Analyzing the company’s societal and task environments, one finds out that the company faces significant opportunities and threats. As the company has been concerned with growth initiatives from its very inception, international expansion has become a major issue. The globalization of the world economy and worldwide improvements in the area of free trade provide the necessary framework for successful expansion abroad. Nevertheless, the different value systems and marketing preferences in foreign countries pose a challenge for Wal-Mart’s international growth. Domestically, Wal-Mart is faced with a highly competitive retail environment. Being the largest retailer in the US by providing the lowest prices, the company has a unique competitive advantage. However, the company operates in a fluid, dynamic and very volatile industry. Therefore a competitive advantage today does not necessarily translate into long-run profitability and success. Thus, the company should emphasize on redesigning its older facilities in the domestic market in order to boost its sales growth, because it currently relies only on new stores being opened. More can be desired from the international growth of the - 2 -
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company, which has failed on most continents due to management mistakes. The most successful attempts for Wal-Mart internationally come from major acquisitions and joint
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This note was uploaded on 04/30/2009 for the course BUS 495 taught by Professor Gregory during the Spring '09 term at American University in Bulgaria.

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Walmart-Final2 - Wal-Mart Stores, Inc Under Attack...

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