Case Study Description of Walmart: Navigating a Changing Retail Landscape
As the largest company, by revenue, in the world, Walmart has been a lightning rod for criticism. However, in an attempt to stay ahead of traditional and digital retailers, and keep customers satisfied with evolving demands, the company is strengthening its competitive advantage by creating Shared Value. Current CEO, Doug McMillon outlines his strategy for fending off competition, navigating a challenging retail landscape, and positioning Walmart as a leading retailer for today and the future.
Authors :: Michael E. Porter, Jorge Ramirez-Vallejo
Swot Analysis of "Walmart: Navigating a Changing Retail Landscape" written by Michael E. Porter, Jorge Ramirez-Vallejo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Walmart Navigating facing as an external strategic factors. Some of the topics covered in Walmart: Navigating a Changing Retail Landscape case study are - Strategic Management Strategies, Social responsibility, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Walmart: Navigating a Changing Retail Landscape casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing transportation and logistics costs,
there is increasing trade war between United States & China, wage bills are increasing, etc
Introduction to SWOT Analysis of Walmart: Navigating a Changing Retail Landscape
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Walmart: Navigating a Changing Retail Landscape case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Walmart Navigating, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Walmart Navigating 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: Navigating a Changing Retail Landscape can be done for the following purposes –
1. Strategic planning using facts provided in Walmart: Navigating a Changing Retail Landscape case study
2. Improving business portfolio management of Walmart Navigating
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 Navigating
Strengths Walmart: Navigating a Changing Retail Landscape | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Walmart Navigating in Walmart: Navigating a Changing Retail Landscape Harvard Business Review case study are -
Analytics focus
– Walmart Navigating 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 Michael E. Porter, Jorge Ramirez-Vallejo 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.
Organizational Resilience of Walmart Navigating
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Walmart Navigating does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Walmart Navigating is one of the most innovative firm in sector. Manager in Walmart: Navigating a Changing Retail Landscape Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Walmart Navigating is one of the leading recruiters in the industry. Managers in the Walmart: Navigating a Changing Retail Landscape are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– Walmart: Navigating a Changing Retail Landscape firm has clearly differentiated products in the market place. This has enabled Walmart Navigating to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Walmart Navigating to invest into research and development (R&D) and innovation.
Ability to lead change in Strategy & Execution field
– Walmart Navigating 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 Navigating in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Walmart Navigating 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: Navigating a Changing Retail Landscape - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Walmart Navigating has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Walmart Navigating 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.
Diverse revenue streams
– Walmart Navigating is present in almost all the verticals within the industry. This has provided firm in Walmart: Navigating a Changing Retail Landscape 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.
Training and development
– Walmart Navigating has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Walmart: Navigating a Changing Retail Landscape 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.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Walmart Navigating digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Walmart Navigating 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.
Highly skilled collaborators
– Walmart Navigating 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: Navigating a Changing Retail Landscape HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Walmart: Navigating a Changing Retail Landscape | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Walmart: Navigating a Changing Retail Landscape are -
Workers concerns about automation
– As automation is fast increasing in the segment, Walmart Navigating 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Walmart: Navigating a Changing Retail Landscape 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 Navigating 's lucrative customers.
Slow to strategic competitive environment developments
– As Walmart: Navigating a Changing Retail Landscape HBR case study mentions - Walmart Navigating 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Walmart: Navigating a Changing Retail Landscape 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 Navigating has relatively successful track record of launching new products.
Lack of clear differentiation of Walmart Navigating products
– To increase the profitability and margins on the products, Walmart Navigating needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Walmart Navigating, firm in the HBR case study Walmart: Navigating a Changing Retail Landscape needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Walmart: Navigating a Changing Retail Landscape 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 Walmart: Navigating a Changing Retail Landscape can leverage the sales team experience to cultivate customer relationships as Walmart Navigating is planning to shift buying processes online.
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 Navigating supply chain. Even after few cautionary changes mentioned in the HBR case study - Walmart: Navigating a Changing Retail Landscape, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Walmart Navigating vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Walmart Navigating 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.
Skills based hiring
– The stress on hiring functional specialists at Walmart Navigating 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael E. Porter, Jorge Ramirez-Vallejo suggests that, Walmart Navigating 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.
Opportunities Walmart: Navigating a Changing Retail Landscape | 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: Navigating a Changing Retail Landscape are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Walmart Navigating is facing challenges because of the dominance of functional experts in the organization. Walmart: Navigating a Changing Retail Landscape 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.
Better consumer reach
– The expansion of the 5G network will help Walmart Navigating to increase its market reach. Walmart Navigating 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.
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 Navigating 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.
Buying journey improvements
– Walmart Navigating can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Walmart: Navigating a Changing Retail Landscape 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Walmart Navigating 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 Navigating to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Walmart Navigating 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.
Developing new processes and practices
– Walmart Navigating can develop new processes and procedures in Strategy & Execution 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.
Using analytics as competitive advantage
– Walmart Navigating 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: Navigating a Changing Retail Landscape - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Walmart Navigating to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Walmart Navigating has opened avenues for new revenue streams for the organization in the industry. This can help Walmart Navigating to build a more holistic ecosystem as suggested in the Walmart: Navigating a Changing Retail Landscape case study. Walmart Navigating 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 Navigating 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.
Leveraging digital technologies
– Walmart Navigating 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.
Manufacturing automation
– Walmart Navigating 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.
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 Navigating can use these opportunities to build new business models that can help the communities that Walmart Navigating operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Walmart: Navigating a Changing Retail Landscape External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Walmart: Navigating a Changing Retail Landscape are -
Environmental challenges
– Walmart Navigating 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 Navigating can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Consumer confidence and its impact on Walmart Navigating 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Walmart Navigating 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.
High dependence on third party suppliers
– Walmart Navigating 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.
Technology acceleration in Forth Industrial Revolution
– Walmart Navigating has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Walmart Navigating 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Walmart Navigating can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Navigating.
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.
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 Navigating in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Walmart Navigating with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Walmart Navigating 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: Navigating a Changing Retail Landscape .
Shortening product life cycle
– it is one of the major threat that Walmart Navigating is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Walmart Navigating
– 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 Navigating.
Weighted SWOT Analysis of Walmart: Navigating a Changing Retail Landscape 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: Navigating a Changing Retail Landscape 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: Navigating a Changing Retail Landscape 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: Navigating a Changing Retail Landscape 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: Navigating a Changing Retail Landscape 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 Navigating needs to make to build a sustainable competitive advantage.
