Wal-Mart: The Store Wars SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Wal-Mart: The Store Wars
In early 2004, residents of Inglewood, California, a working-class community just outside Los Angeles composed primarily of African- and Hispanic-Americans, were preparing to vote on a referendum that would change the city charter to allow Wal-Mart to build a supercenter on a huge, undeveloped lot in the city. Walmart had put forward the measure after the city council refused to change the zoning of a sixty-acre plot on which it held an option to build. Numerous community and religious groups opposed Wal-Mart's entry and campaigned against the referendum. Walmart promised low-priced merchandise and jobs, but these groups were skeptical about the kinds of jobs and compensation that would be offered, the healthcare that would be provided to employees, and the broader impact Walmart would have on the community. Inglewood was a pro-union community, so there was also opposition based on Walmart's anti-union position. On April 6 Inglewood residents voted to reject the referendum by a margin of 60.6 percent to 39.9 percent. Though smaller, less organized, and with fewer resources than Walmart, this coalition of community and religious leaders had defeated the global retailing behemoth.
Swot Analysis of "Wal-Mart: The Store Wars" written by Daniel Diermeier includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Inglewood Referendum facing as an external strategic factors. Some of the topics covered in Wal-Mart: The Store Wars case study are - Strategic Management Strategies, Corporate governance, Crisis management, Decision making, Government, Public relations, Social responsibility and Global Business.
Some of the macro environment factors that can be used to understand the Wal-Mart: The Store Wars casestudy better are - – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, geopolitical disruptions,
competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Wal-Mart: The Store Wars
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wal-Mart: The Store Wars case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Inglewood Referendum, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Inglewood Referendum 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 Wal-Mart: The Store Wars can be done for the following purposes –
1. Strategic planning using facts provided in Wal-Mart: The Store Wars case study
2. Improving business portfolio management of Inglewood Referendum
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Inglewood Referendum
Strengths Wal-Mart: The Store Wars | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Inglewood Referendum in Wal-Mart: The Store Wars Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Inglewood Referendum in the sector have low bargaining power. Wal-Mart: The Store Wars has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Inglewood Referendum to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Global Business industry
– Wal-Mart: The Store Wars firm has clearly differentiated products in the market place. This has enabled Inglewood Referendum to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Inglewood Referendum to invest into research and development (R&D) and innovation.
Analytics focus
– Inglewood Referendum 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 Daniel Diermeier 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.
High switching costs
– The high switching costs that Inglewood Referendum 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.
Diverse revenue streams
– Inglewood Referendum is present in almost all the verticals within the industry. This has provided firm in Wal-Mart: The Store Wars 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.
Ability to lead change in Global Business field
– Inglewood Referendum 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 Inglewood Referendum in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Inglewood Referendum 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 Inglewood Referendum is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wal-Mart: The Store Wars Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Inglewood Referendum has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Inglewood Referendum 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.
Effective Research and Development (R&D)
– Inglewood Referendum 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 Wal-Mart: The Store Wars - 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
– Inglewood Referendum 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 Wal-Mart: The Store Wars HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Inglewood Referendum digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Inglewood Referendum 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.
Strong track record of project management
– Inglewood Referendum is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Wal-Mart: The Store Wars | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wal-Mart: The Store Wars are -
Products dominated business model
– Even though Inglewood Referendum 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 - Wal-Mart: The Store Wars should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Inglewood Referendum 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Wal-Mart: The Store Wars 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 Inglewood Referendum 's lucrative customers.
Slow to strategic competitive environment developments
– As Wal-Mart: The Store Wars HBR case study mentions - Inglewood Referendum takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wal-Mart: The Store Wars, in the dynamic environment Inglewood Referendum has struggled to respond to the nimble upstart competition. Inglewood Referendum has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Inglewood Referendum is dominated by functional specialists. It is not different from other players in the Global Business segment. Inglewood Referendum needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Inglewood Referendum to focus more on services rather than just following the product oriented approach.
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 Inglewood Referendum supply chain. Even after few cautionary changes mentioned in the HBR case study - Wal-Mart: The Store Wars, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Inglewood Referendum 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, Inglewood Referendum is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Wal-Mart: The Store Wars can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Inglewood Referendum 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Wal-Mart: The Store Wars, it seems that the employees of Inglewood Referendum 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.
Need for greater diversity
– Inglewood Referendum 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 Wal-Mart: The Store Wars | 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 Wal-Mart: The Store Wars are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Inglewood Referendum can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Wal-Mart: The Store Wars, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Inglewood Referendum 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Inglewood Referendum can use these opportunities to build new business models that can help the communities that Inglewood Referendum operates in. Secondly it can use opportunities from government spending in Global Business sector.
Learning at scale
– Online learning technologies has now opened space for Inglewood Referendum to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Inglewood Referendum has opened avenues for new revenue streams for the organization in the industry. This can help Inglewood Referendum to build a more holistic ecosystem as suggested in the Wal-Mart: The Store Wars case study. Inglewood Referendum can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Inglewood Referendum to increase its market reach. Inglewood Referendum 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.
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. Inglewood Referendum can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Inglewood Referendum 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.
Leveraging digital technologies
– Inglewood Referendum 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.
Building a culture of innovation
– managers at Inglewood Referendum 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 Global Business segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Inglewood Referendum can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Inglewood Referendum is facing challenges because of the dominance of functional experts in the organization. Wal-Mart: The Store Wars 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.
Using analytics as competitive advantage
– Inglewood Referendum 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 Wal-Mart: The Store Wars - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Inglewood Referendum to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Wal-Mart: The Store Wars External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wal-Mart: The Store Wars are -
Stagnating economy with rate increase
– Inglewood Referendum 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Inglewood Referendum can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Inglewood Referendum has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Inglewood Referendum needs to keep up with the evolution of technology in the Global Business 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.
Increasing wage structure of Inglewood Referendum
– 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 Inglewood Referendum.
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. Inglewood Referendum needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Regulatory challenges
– Inglewood Referendum 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 Global Business industry regulations.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Inglewood Referendum in the Global Business industry. The Global Business 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 Inglewood Referendum with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Inglewood Referendum in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Inglewood Referendum is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 dependence on third party suppliers
– Inglewood Referendum 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.
Weighted SWOT Analysis of Wal-Mart: The Store Wars 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 Wal-Mart: The Store Wars 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 Wal-Mart: The Store Wars 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 Wal-Mart: The Store Wars 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 Wal-Mart: The Store Wars 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 Inglewood Referendum needs to make to build a sustainable competitive advantage.
