Case Study Description of Walmart's Sustainability Strategy (B): 2010 Update
In 2007, Walmart launched a new business strategy designed to meet three sweeping and aggressive environmental goals set by CEO Lee Scott: (1) to be supplied 100 percent by renewable energy; (2) to create zero waste; and (3) to sell products that sustain people and the environment. The initiation of this new approach to managing the company's extended supply chain is the subject of OIT-71A. In OIT-71B, the authors provide an update on Walmart's sustainability strategy, three years after the original case was written. In addition to outlining the progress made in the three sustainable value networks profiled in the A case (textiles, seafood, and electronics), the B case also describes how the company is strengthening, modifying, or abandoning the new supply chain management practices it adopted in 2007. It also touches on some of the company's new sustainability initiatives, including Walmart's 2010 GHG goal, the globalization of the network approach, and new measurement programs (e.g., GreenWERCS and the sustainability consortium).
Swot Analysis of "Walmart's Sustainability Strategy (B): 2010 Update" written by Lyn Denend, Erica Plambeck includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Walmart's Oit facing as an external strategic factors. Some of the topics covered in Walmart's Sustainability Strategy (B): 2010 Update case study are - Strategic Management Strategies, Supply chain, Sustainability and Organizational Development.
Some of the macro environment factors that can be used to understand the Walmart's Sustainability Strategy (B): 2010 Update casestudy better are - – technology disruption, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Walmart's Sustainability Strategy (B): 2010 Update
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Walmart's Sustainability Strategy (B): 2010 Update case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Walmart's Oit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Walmart's Oit operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Walmart's Sustainability Strategy (B): 2010 Update can be done for the following purposes –
1. Strategic planning using facts provided in Walmart's Sustainability Strategy (B): 2010 Update case study
2. Improving business portfolio management of Walmart's Oit
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Walmart's Oit
Strengths Walmart's Sustainability Strategy (B): 2010 Update | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Walmart's Oit in Walmart's Sustainability Strategy (B): 2010 Update Harvard Business Review case study are -
Learning organization
- Walmart's Oit is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Walmart's Oit is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Walmart's Sustainability Strategy (B): 2010 Update Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Walmart's Sustainability Strategy (B): 2010 Update Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Walmart's Oit is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Lyn Denend, Erica Plambeck can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Walmart's Oit is present in almost all the verticals within the industry. This has provided firm in Walmart's Sustainability Strategy (B): 2010 Update case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Walmart's Oit has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Walmart's Oit to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Walmart's Oit are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Walmart's Oit has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Walmart's Sustainability Strategy (B): 2010 Update - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Walmart's Oit has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Walmart's Sustainability Strategy (B): 2010 Update HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Walmart's Oit is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Walmart's Oit
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Walmart's Oit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Walmart's Oit has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Walmart's Sustainability Strategy (B): 2010 Update Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– Walmart's Oit is one of the most innovative firm in sector. Manager in Walmart's Sustainability Strategy (B): 2010 Update Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Walmart's Sustainability Strategy (B): 2010 Update | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Walmart's Sustainability Strategy (B): 2010 Update are -
Capital Spending Reduction
– Even during the low interest decade, Walmart's Oit has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Skills based hiring
– The stress on hiring functional specialists at Walmart's Oit has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Increasing silos among functional specialists
– The organizational structure of Walmart's Oit is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Walmart's Oit needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Walmart's Oit to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Walmart's Sustainability Strategy (B): 2010 Update, it seems that the employees of Walmart's Oit don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Walmart's Sustainability Strategy (B): 2010 Update HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Walmart's Oit has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study Walmart's Sustainability Strategy (B): 2010 Update, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Walmart's Sustainability Strategy (B): 2010 Update HBR case study mentions - Walmart's Oit takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Walmart's Sustainability Strategy (B): 2010 Update, in the dynamic environment Walmart's Oit has struggled to respond to the nimble upstart competition. Walmart's Oit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Walmart's Oit products
– To increase the profitability and margins on the products, Walmart's Oit needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Walmart's Sustainability Strategy (B): 2010 Update has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Walmart's Oit 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Walmart's Sustainability Strategy (B): 2010 Update, is just above the industry average. Walmart's Oit needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Opportunities Walmart's Sustainability Strategy (B): 2010 Update | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Walmart's Sustainability Strategy (B): 2010 Update are -
Loyalty marketing
– Walmart's Oit has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Walmart's Oit to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Walmart's Oit to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Walmart's Oit can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Organizational Development segment.
Learning at scale
– Online learning technologies has now opened space for Walmart's Oit to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Walmart's Oit has opened avenues for new revenue streams for the organization in the industry. This can help Walmart's Oit to build a more holistic ecosystem as suggested in the Walmart's Sustainability Strategy (B): 2010 Update case study. Walmart's Oit can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Walmart's Oit in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Walmart's Oit can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Walmart's Sustainability Strategy (B): 2010 Update, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Walmart's Oit can use these opportunities to build new business models that can help the communities that Walmart's Oit operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Better consumer reach
– The expansion of the 5G network will help Walmart's Oit to increase its market reach. Walmart's Oit will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Walmart's Oit can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Walmart's Oit can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Walmart's Oit has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Walmart's Sustainability Strategy (B): 2010 Update - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Walmart's Oit to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Walmart's Oit to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Walmart's Oit in the consumer business. Now Walmart's Oit can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Walmart's Sustainability Strategy (B): 2010 Update External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Walmart's Sustainability Strategy (B): 2010 Update are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Walmart's Oit will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Walmart's Oit high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Walmart's Sustainability Strategy (B): 2010 Update, Walmart's Oit may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Walmart's Oit in the Organizational Development industry. The Organizational Development industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Technology acceleration in Forth Industrial Revolution
– Walmart's Oit has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Walmart's Oit needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Walmart's Oit needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Walmart's Oit can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Walmart's Oit with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Walmart's Oit demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing wage structure of Walmart's Oit
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Walmart's Oit.
Stagnating economy with rate increase
– Walmart's Oit can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Walmart's Oit in the Organizational Development sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Walmart's Sustainability Strategy (B): 2010 Update Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Walmart's Sustainability Strategy (B): 2010 Update needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Walmart's Sustainability Strategy (B): 2010 Update is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Walmart's Sustainability Strategy (B): 2010 Update is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Walmart's Sustainability Strategy (B): 2010 Update is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Walmart's Oit needs to make to build a sustainable competitive advantage.