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 household debt because of falling income levels, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , technology disruption, geopolitical disruptions, there is increasing trade war between United States & China,
customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, 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 -
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.
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.
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.
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.
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.
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.
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.
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 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Walmart's Oit digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Walmart's Oit has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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 -
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.
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.
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.
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.
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.
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.
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 dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Walmart's Oit supply chain. Even after few cautionary changes mentioned in the HBR case study - Walmart's Sustainability Strategy (B): 2010 Update, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Walmart's Oit vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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 -
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.
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.
Developing new processes and practices
– Walmart's Oit can develop new processes and procedures in Organizational Development industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
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.
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.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Walmart's Oit is facing challenges because of the dominance of functional experts in the organization. Walmart's Sustainability Strategy (B): 2010 Update case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Walmart's Oit can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Walmart's Oit can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Walmart's Sustainability Strategy (B): 2010 Update .
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.
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.
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.
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.
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.
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.
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Walmart's Oit business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
