Wal-Mart Analsysis

Executive Summary

From its modest beginnings when Sam Walton opened the first Ben Franklin store in 1945 in Newport, Arkansas, Wal-Mart has become the leader in the discount department store industry. Through its stores, Supercenters and Sam’s Club warehouse stores, the company operates 2,823 units in the United States, 606 units in six foreign countries, and has 7 joint ventures in the Pacific Rim. Ten strategies have been identified that will ensure continued revenue and market share growth via foreign expansion, the foray into new domestic markets (the urban market) and concentration strategies in existing markets by enhancing the one-stop-shopping appeal of the current units.

One red flag that the company analysis uncovered was that Wal-Mart does not have a formal mission statement. The lack of a mission statement influences the cohesiveness of goals, objectives, and policies. Each of these should support the other, all leading to the support of the mission statement. A mission statement has been written for the company, keeping in mind the necessity for congruence of the goals, objectives, and policies.

The following is the New Mission Statement that has been developed for Wal-Mart:

Creed

Wal-Mart is committed to providing our customers, associates and shareholders with the best possible products at a value unmatched in the industry. We believe in providing a positive environment for associates and customers and will continue to provide our shareholders with the highest shareholder value possible.

Mission Statement

Wal-Mart Stores Inc. is devoted to providing our customers with products at a superior value. We will offer products at everyday low prices and with friendly customer service throughout the world.

Wal-Mart Stores Inc. provides products to all individual consumers and business operators at everyday low prices by controlling and improving efficiency with asset management, inventory control and technology. In the future Wal-Mart Stores Inc. will continue to expand and respond to growing technology. Improving efficiency will enable us to provide products to all of our customers at everyday low prices.

Wal-Mart Stores Inc. operates in the US in all fifty states and internationally including Canada, Central and South America, Asia and Germany. In the future, the company will continue to grow in the US and internationally and continue to become a successful global retailer by using the attributes that defined success in the United States.

Wal-Mart Stores Inc.’s low cost structure, asset management and inventory control has been the foundation for success for Wal-Mart. These unique competencies have allowed the company to ensure everyday low prices and pass the value on to their customers. Looking ahead, Wal-Mart Stores Inc. will continue to bring the value to customers, associates and shareholders by increasing their technology and improving efficiency in asset management and inventory control. The low cost structure that Wal-Mart employs will continue to allow the value to be passed along to our customers.

The company currently has three strategic groups: Wal-Mart Stores Division, Sam’s Club Division, and Wal-Mart International Division. Although these groups are well-aligned to the current organization chart, they mix products (stores and warehouse clubs) with markets. To correct this, it is recommended that the International Division be divided into Stores and Sam’s Club divisions. The organization chart will need to be revised to match these new strategic groups.

An analysis of the company’s key success factors versus those identified by the industry also shows a potential red flag. Three key success factors were not in line with those of the industry: Shareholder Value, Price Competitiveness, and Market Share. Shareholder Value was rated lower by the industry while Price Competitiveness and Market Share were rated higher by the industry. Wal-Mart believes that price competitiveness and market share are byproducts of a low cost structure, customer service, shareholder value and asset management. As the industry leader, Wal-Mart has redefined the industry. It could very well be that others in the industry should be following Wal-Mart’s key success factors.

The analysis of the remote environment shows opportunities as demographics are shifting towards the idea of one-stop-shopping and technology prospects are increasing in inventory management and market research. Threats that the company is facing include the decline in the level of disposable income as consumer debt and savings levels increase, the aging of