1.

Executive overview:

In 1962, Sam Walton founded Walmart in nearby Rogers, Arkansas. The company had

two main strategies. First, make good deals with suppliers, then lower product prices

and pass the savings on to customers. Second, their strategy was to target small town

populations in order to become a large discount store. Initially, the company focused

on its brick and mortar strategy in order to increase foot traffic by operating from a

store or retail premises.

By 2018, Walmart had acquired numerous businesses and expanded its global

operations. Every year, over 260 million customers visited 11,723 stores in 28

countries. The acquisition was part of a strategy to increase their online presence and

compete with Amazon.

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2. Problem Statement:

Walmart was the world's largest retailer by the end of 2017, with global revenues of

nearly $486 billion. However, there were issues that could endanger the company's

future growth. The main issue was the growth of Amazon, which had recently

purchased Whole Foods and was the biggest attraction for customers shopping online.

Furthermore, the growing preference of consumers for online shopping prompted

Walmart to reconsider its brick and mortar strategy.

Walmart's business model is primarily focused on retail stores and the provision of

goods at low prices. As a result, the most difficult challenge for Walmart was to

establish an online presence in a market already dominated by a competitor like

Amazon. To operate its business online, it required a significant financial investment

as well as management.

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3. Analysis

3.1 SWOT Analysis

Strengths:

• A Retail Legend: The company is regarded as a "legend" in the retail industry

due to its decades-long history and determination to continue growing rapidly.
• Scale of Operations: With 60 million products in their stores, the company offers
a wide range of unique, low-cost products to its customers.
• Effective Supply Chain: They provide the necessary care, effort, time, and
money for the processes of tracking products, recording and updating inventory,
and tracking customer satisfaction statistics.
• Walmart’s extensive product line: It has well-known and well-liked product
brands. It has more affordable options. It has its own private label with a wide
range of Walmart products.

Weaknesses:

• Healthcare situation: The world's largest retailer is unable to provide adequate

healthcare to its more than 1.5 million employees in the United States.
• Working Conditions: A store that needs to stock every aisle and product requires
stealthy employees. Full-time employees are not permitted to take vacation or
sick leave.
• Thin Profit margin: Walmart minimizes selling prices, it also needs to minimize
profit margins and rely more on sales volume. The cost leadership strategy also
makes Walmart’s business model easy to copy.

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Opportunities:

• Possible acquisitions and expansion: Walmart needs to enter the majority of

developed countries. If it does not want to open Walmart stores in Europe or
Asia, it can invest in or even acquire some of their retail stores.
• Human Resource Development: Walmart has been the subject of numerous
lawsuits, criticisms, and controversies for the way it treats its employees in terms
of salary and wage. During the COVID pandemic, Walmart increased its hourly
wage and gave raises to 165,000 of its employees. If these developments
continue, Walmart may be able to avoid lawsuits and public controversies.
• Increase Product Quality: Walmart has the opportunity to improve the quality of
its clothing products. It is a fantastic opportunity for Walmart to demonstrate
that they can improve certain products while also selling high-quality clothing.
• Improvements to Home Delivery: It can improve its online store and find new
ways to reinvent this pickup and home delivery service.

Threats:

• Political Controversies: Walmart has been the target of political, environmental,

and social controversies.
• Copies of its Strategy and Business Model: Walmart's business model is used by
the majority of the world's largest retailers. Retailers like Target, Costco, and
TESCO have also accepted and adapted these methods into their business
models.
• The Modern Enemy: Amazon provides customers with an efficient and
enjoyable shopping experience. While the pandemic continues to cause
quarantine and lockdown situations around the world, Walmart may be able to
improve its online shopping services in order to provide a better customer
experience.

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3.2 Porter’s 5 forces

The Porter Five Forces framework assists us in evaluating the competitive environment

in an industry. This tool's application is broad and strategic in nature. The results of the

analysis lay a solid foundation for making the right strategic decisions.

I. Bargaining Power of Buyers:

Walmart deals with a large number of small buyers on a daily basis, which
disseminates their purchasing power. When it comes to pricing, the company does
not feel much pressure from customers. At the same time, Walmart's power as a
buyer is weakened by the constant demand for specific new brands that are currently
out of stock, while its customers' power is strengthened.

II. Bargaining Power of Suppliers:

Walmart appears to be a powerful buyer due to its large purchasing volumes and
broad customer reach. That is why its suppliers make sure to regularly meet its
requirements at all times. To meet Walmart's demands, they even build their
operational centres adjacent to store locations.
In addition, as part of its Corporate Social Responsibility strategy, Walmart has a
Supplier Diversity Program. This reduces its reliance on a single distributor even
further.

III. Threat of Substitutes:

With its extensive inventory, the retailer faces no significant competition. A product
and all of its substitutes are likely to be available at Walmart. The retail behemoth
should be concerned only with industry rivals such as Target, which may attract

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customers by offering comparable product diversity. However, this is due to industry

rivalry rather than product substitution.

IV. Threat of New Entrants:

Walmart makes significant investments in sales and marketing, distribution, and

product development. If another party wishes to enter the industry, they must invest
a significant amount of initial capital in order to compete with existing players.
Furthermore, Walmart maintains strong relationships with suppliers and sells to a
large number of customers. Thus, economies of scale undoubtedly benefit it.

V. Industry Rivalry:

Walmart's competitive advantage from economies of scale and price strategy is hard
to find elsewhere. Costco, Target, The Kroger, and Amazon are a few competitors
that the company must keep a close eye on. Nonetheless, their distribution channels
and pricing strategies have yet to outperform those of Walmart.

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4. Options to overcome Problem

4.1 Re-creation of [Link]

Walmart could revamp its retailing business and go online to compete with

Amazon's online shopping experience. To accomplish this, Walmart needed to

invest in Web technology and services, as well as human resource management.

This would cost the company a significant amount of money and time.

As a result, management decided to investigate various solutions to the problem.

4.2 Acquisition

Walmart recognised that it needed to look outside for support and expertise in order

to compete with Amazon. Walmart believes that the acquisition will "complement

the significant foundation already in place to serve customers across the Walmart

app, site, and stores," as well as "position the company for even faster e-commerce

growth in the future by expanding customer reach and adding new capabilities."

They would be able to use the resources and management of the company they had

purchased. They did not need to invest in additional building materials.

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4.2.1 Acquisition of [Link]

• [Link] was an American online retailer based in Hoboken, New Jersey.

• The company promoted La Croix seltzer, fresh produce, and ethical cleaning

products.

• [Link]’s target customers were millennials, urban dweller, with high income.

• Walmart bought [Link] for $3 Billion in August 2016.

• Walmart actually bought a shift in their workplace culture. ([Link] hosted

Thursday evening happy hours, but drinking during work hours was against

Walmart's policy.)

4.2.2 Acquisition of ShoeBuy

• [Link] (previously known as [Link]) is a footwear retailer based

in the United States. The website was founded in Boston in 1999.

• Walmart acquired it for $9 million in January 2017.

• This acquisition was made primarily to compete with Amazon's purchase of

Zappos, an online shoe retailer.

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4.2.3 Acquisition of Moosejaw

• [Link] is an online and in-store retailer that specialises in outdoor

recreation apparel and equipment for snowboarding, rock climbing, hiking,

and camping. Bill Schulman founded the company in 1992.

• Walmart acquired Moosejaw for $51 million in cash on February 15, 2017.

• Walmart's goal in the sporting goods category was to gain a competitive

advantage over Amazon.

4.2.4 Acquisition of Modcloth

• Modcloth is an online store in the United States that sells indie and vintage-

inspired women's clothing.

• Walmart acquired Modcloth for $75 million in March 2017.

4.2.5 Acquisition of Bonobos

• Bonobos is a high-end, e-commerce-driven clothing company based in New

York City that designs and sells men's clothing.

• Walmart agreed to acquire Bonobos for $310 million on June 16, 2017,

making it a subsidiary within its fashion department.

• Clothing at Bonobos ranged from $90 to $130, whereas clothing at Walmart

ranged from $10 to $30.

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• Walmart acquired [Link] and Bonobos to provide premium products that

they could not provide on their own.

4.2.6 Launching Products on Allswell

• Allswell is one of the most cost-effective mattress-in-a-box brands available.

• Allswell provided a 100-day free trial, a delivery option, and would take

away the old mattresses at no additional cost.

• Walmart announced in 2018 that they would be launching their own line of

premium cosmetics on the Internet.

4.2.7 Acquisition of Flipkart

• Flipkart is a Bangalore-based Indian e-commerce company founded in 2007.

• Flipkart has a dominant position in the apparel segment, which it enhanced

with the acquisition of Myntra, and has been described as "neck and neck"

with Amazon in the sale of electronics and mobile phones. Flipkart also owns

PhonePe, a UPI-based mobile payment service.

• In May 2018, Walmart purchased a 77% stake in Flipkart.

• Walmart's goal was to invest in and try to influence India's growing

economy.

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5. Recommendations & Implementation

Walmart may introduce a subscription model where users must purchase yearly or

monthly subscription to take advantage of its benefits.

Customers who had this subscriptions could have some benefits as follows:

1. Walmart might provide bigger discounts on select luxury, pricey products to

clients throughout festival season or special occasions.

2. Customers with subscriptions have the option to build their cart in the "Pickup

& delivery" area of our website or in the app and select Express delivery. Include

new food, pet supplies, gadgets, and other items. Select "Express delivery" when

you are ready to secure a time slot, and we will deliver it to you in two hours or

less.

3. Get identical pricing to what you would pay in stores:

• Walmart could guarantee customers that everything will be completely fresh.

Promise to make things right if you're not satisfied as well.

4. Tracking your delivery is simple:

• Walmart could provide a mobile app that lets you track the status of your

order. People would also prefer a no contact delivery after the pandemic, when

the delivery person will leave your purchase at the door to minimise

interaction.

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5. Apply Express to almost anything:

• Walmart purchased Jetblack, which employs AI technology. Users of the

service simply send a text to Jetblack's AI-powered chatbot - named "J" -

saying they need a specific product, and Jetblack's couriers will source and

deliver it the same or next day at no extra cost. Customers can also make

general requests, such as birthday gifts, and J will send text recommendations

for them to choose from.

6. Improve service at Retail Outlets:

• Customers with premium memberships who visit retail stores do not have to

wait in queue and can receive fast billing service. Furthermore, Walmart can

improve by incorporating new technology into retail stores, such as smart

trolley billing systems, to provide a more user-friendly shopping experience.

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