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 - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, wage bills are increasing, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, geopolitical disruptions,
challanges to central banks by blockchain based private currencies, increasing energy prices, 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 -
Superior customer experience
– The customer experience strategy of Walmart's Oit in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Ability to lead change in Organizational Development field
– Walmart's Oit is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Walmart's Oit in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Organizational Development industry
– Walmart's Sustainability Strategy (B): 2010 Update firm has clearly differentiated products in the market place. This has enabled Walmart's Oit to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Walmart's Oit to invest into research and development (R&D) and innovation.
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.
High switching costs
– The high switching costs that Walmart's Oit has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Walmart's Oit has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Walmart's Oit has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
Ability to recruit top talent
– Walmart's Oit is one of the leading recruiters in the industry. Managers in the Walmart's Sustainability Strategy (B): 2010 Update are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Low bargaining power of suppliers
– Suppliers of Walmart's Oit in the sector have low bargaining power. Walmart's Sustainability Strategy (B): 2010 Update has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Walmart's Oit to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 -
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.
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.
Products dominated business model
– Even though Walmart's Oit has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Walmart's Sustainability Strategy (B): 2010 Update should strive to include more intangible value offerings along with its core products and services.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Lyn Denend, Erica Plambeck suggests that, Walmart's Oit is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Walmart's Oit has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Walmart's Oit is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Walmart's Sustainability Strategy (B): 2010 Update can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Walmart's Oit has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 -
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Walmart's Oit can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Walmart's Oit can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Walmart's Sustainability Strategy (B): 2010 Update suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Walmart's Oit can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
Leveraging digital technologies
– Walmart's Oit can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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.
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 -
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Walmart's Oit.
Environmental challenges
– Walmart's Oit needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Walmart's Oit can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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.
Regulatory challenges
– Walmart's Oit needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
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.
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.
Shortening product life cycle
– it is one of the major threat that Walmart's Oit is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.
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.