The Inexorable Rise of Walmart? 1988-2016 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
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Case Study Description of The Inexorable Rise of Walmart? 1988-2016
In October 2015, Walmart surprised investors by announcing that it expected flat sales growth for 2015 and growth of only 3% to 4% over the coming three years. Profits would also fall due to significant investments in people and technology. The company's stock price dropped 10% on the news, the largest one-day decline since 1998. In February 2016, Walmart reported that revenues for 2015 had dropped 0.7% to $482.1 billion, the first decline in Walmart's history. The company also downgraded its sales forecast for the coming year, suggesting sales would now be flat. Meanwhile, online retailer Amazon was growing rapidly and, despite being less than one-quarter of the size of Walmart, now boasted a higher market capitalization. Moreover, in April 2016, Alibaba of China announced that it had passed Walmart in global sales to become the biggest retail platform in the world. To add to Walmart's woes, in the United States traditional dollar discount stores and convenience outlets were gaining ground, and wage rises were putting pressure on profits. Meanwhile, international markets continued to underperform. Indeed, some analysts had suggested that Walmart retreat to its U.S. home base to improve performance. Many feared that this was the end of the 50+ year inexorable rise of Walmart. However, CEO Doug McMillon remained determined to get the company back on track and vowed to eschew short-term profits and invest in the future. Investors were not impressed. They had waited a long time for improvements; in 2015, Walmart generated three times the sales and profits it had achieved in 1999, and yet the stock price had barely changed. Patience was running out.
Swot Analysis of "The Inexorable Rise of Walmart? 1988-2016" written by John R. Wells, Gabriel Ellsworth includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Walmart Inexorable facing as an external strategic factors. Some of the topics covered in The Inexorable Rise of Walmart? 1988-2016 case study are - Strategic Management Strategies, Business models, Compensation, Competition, Financial management, Growth strategy, IT, Labor, Marketing, Performance measurement, Pricing, Risk management, Supply chain and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The Inexorable Rise of Walmart? 1988-2016 casestudy better are - – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing transportation and logistics costs,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of The Inexorable Rise of Walmart? 1988-2016
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Inexorable Rise of Walmart? 1988-2016 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Walmart Inexorable, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Walmart Inexorable 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 The Inexorable Rise of Walmart? 1988-2016 can be done for the following purposes –
1. Strategic planning using facts provided in The Inexorable Rise of Walmart? 1988-2016 case study
2. Improving business portfolio management of Walmart Inexorable
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Walmart Inexorable
Strengths The Inexorable Rise of Walmart? 1988-2016 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Walmart Inexorable in The Inexorable Rise of Walmart? 1988-2016 Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Walmart Inexorable 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.
Successful track record of launching new products
– Walmart Inexorable has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Walmart Inexorable 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.
High brand equity
– Walmart Inexorable has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Walmart Inexorable to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Walmart Inexorable
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Walmart Inexorable does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Strategy & Execution field
– Walmart Inexorable 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 Inexorable in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the The Inexorable Rise of Walmart? 1988-2016 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.
High switching costs
– The high switching costs that Walmart Inexorable 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.
Analytics focus
– Walmart Inexorable 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 John R. Wells, Gabriel Ellsworth 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.
Strong track record of project management
– Walmart Inexorable is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Walmart Inexorable 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 The Inexorable Rise of Walmart? 1988-2016 - 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 Inexorable 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 The Inexorable Rise of Walmart? 1988-2016 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Walmart Inexorable is one of the most innovative firm in sector. Manager in The Inexorable Rise of Walmart? 1988-2016 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses The Inexorable Rise of Walmart? 1988-2016 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Inexorable Rise of Walmart? 1988-2016 are -
High operating costs
– Compare to the competitors, firm in the HBR case study The Inexorable Rise of Walmart? 1988-2016 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 Inexorable 's lucrative customers.
High cash cycle compare to competitors
Walmart Inexorable 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Walmart Inexorable is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Inexorable Rise of Walmart? 1988-2016 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Walmart Inexorable needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– It come across in the case study The Inexorable Rise of Walmart? 1988-2016 that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case The Inexorable Rise of Walmart? 1988-2016 can leverage the sales team experience to cultivate customer relationships as Walmart Inexorable is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Walmart Inexorable is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Walmart Inexorable needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Walmart Inexorable to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Walmart Inexorable 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.
Need for greater diversity
– Walmart Inexorable 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Inexorable Rise of Walmart? 1988-2016, in the dynamic environment Walmart Inexorable has struggled to respond to the nimble upstart competition. Walmart Inexorable has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Inexorable Rise of Walmart? 1988-2016, is just above the industry average. Walmart Inexorable 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Inexorable Rise of Walmart? 1988-2016, it seems that the employees of Walmart Inexorable 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.
Opportunities The Inexorable Rise of Walmart? 1988-2016 | 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 The Inexorable Rise of Walmart? 1988-2016 are -
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 Inexorable can use these opportunities to build new business models that can help the communities that Walmart Inexorable operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Walmart Inexorable 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 Inexorable to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Walmart Inexorable in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Walmart Inexorable can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Walmart Inexorable 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 Strategy & Execution segment.
Buying journey improvements
– Walmart Inexorable can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Inexorable Rise of Walmart? 1988-2016 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Walmart Inexorable can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Walmart Inexorable 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.
Loyalty marketing
– Walmart Inexorable 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.
Manufacturing automation
– Walmart Inexorable can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Walmart Inexorable 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 Inexorable 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Walmart Inexorable 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Walmart Inexorable can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats The Inexorable Rise of Walmart? 1988-2016 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Inexorable Rise of Walmart? 1988-2016 are -
Stagnating economy with rate increase
– Walmart Inexorable 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.
Increasing wage structure of Walmart Inexorable
– 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 Inexorable.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Walmart Inexorable in the Strategy & Execution industry. The Strategy & Execution 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 Inexorable is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Walmart Inexorable 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.
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.
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 Inexorable 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.
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.
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 Inexorable needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Walmart Inexorable 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.
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 Inexorable.
Technology acceleration in Forth Industrial Revolution
– Walmart Inexorable has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Walmart Inexorable needs to keep up with the evolution of technology in the Strategy & Execution 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Inexorable Rise of Walmart? 1988-2016, Walmart Inexorable may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Weighted SWOT Analysis of The Inexorable Rise of Walmart? 1988-2016 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 The Inexorable Rise of Walmart? 1988-2016 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 The Inexorable Rise of Walmart? 1988-2016 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 The Inexorable Rise of Walmart? 1988-2016 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 The Inexorable Rise of Walmart? 1988-2016 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 Inexorable needs to make to build a sustainable competitive advantage.
