Columbia College Jessica Kauten, Siveicea Love-Guarganious, William Montague, Scott Randall, Marchelle Robinson, and Judith Rosado Strategic Management 479 Alexander Furla WAL-MART STORES STRATEGIC AUDIT TEAM PRESENTATION

Current Situation Current Performance  Divided in 3 Business Segments: Wal-Mart Stores, Sam's Club, and the International Division.  Largest Company with $245 billion in sales.  $11.2 billion net income, up 9.4% to $2.68 per share.  Stock price of $  Over 6,100 stores worldwide.

Board of Directors  13 members, 4 affiliated, 9 independent, 3 women, 2 African Americans, 2 Hispanic Americans.  S. Robson Walton, Chairman of the Board. Strategic Management

Natural Environment  Raw materials availability.  Land availability.  Electricity usage.  Oil and Gas usage.  Water scarcity.  Hazardous waste storage, transportation and disposal. External Environment SWOT Analysis

External Environment Societal Economy Economic  Interest rate increases (T).  Economic deterioration (O)  Increasing commodity costs. (T)  Increasing transportation costs. (T)  Currency fluctuations. (T) Technology  Usage of RFID (O)  Internet presence (O)  Information technology increasingly important. (O)

External Environment Political-Legal  Regional trade pacts making free trade available (O)  Differing laws may evoke compliance issues. (T)  Potential unionization of workforce. (T)  Many legal proceedings. (T)  Defendant in numerous cases containing class action allegations (T)

Socio-cultural Aging U.S. demographics. (O) Slowing U.S. population growth. (T) Wal-Mart seen as a reason for closing of mom and pop stores. (T) International cultural differences. (T) Green environmental movement. (O) Task Environment United States market saturation. (T) Expansion into Europe, China, South America, Canada, and Mexico. (O) Rivalry High. Target, Sears, K-Mart (T) Chance of new entrants low. (O) Purchasing power high. (O) Substitute power high. (T) Government regulations power medium. (T)

Internal Environment Corporate Culture In-depth employee involvement in company affairs. (S) Trained employees to be merchants by being responsible for the performance of their own departments. (S) Reflection of the founder’s values. (S) Conservative values create some problems when expanding to larger cities. (W) Non-Union stance is viewed unfavorably is some areas. (W) Corporate Resources Marketing Advertising costs are expensed as incurred and were $1.6 billion in Advertising costs consist primarily of print and television advertisements.

Finance $312.6 billion in annual sales. (S) $11.2 billion net income. (S) $2.68 earnings per share. (S) 8.9% return on assets. (S) 11.4% increase in sales and operating income for the international business. (S) Internal Environment

R&D More involved with the development side. (W) Focused on expansion and development. (W) Operations Wal-Mart USA. Intent on driving comparative store (S) Sam’s Club. Remain committed to serving the needs of our members (S) Wal-Mart International. Approach to ensuring continued profitable growth. (S) Internal Environment

Human Resources Employees are called associates. (S) Employee stock ownership and profit-sharing program. (S) Decentralized approach to retail management development. (S) Utilizes the Total Quality Management approach. (S) Discourages unionization. (W) Information Systems Leader in RFID technology. (S) Good internet presence. (S) Utilizes satellite communications, data centers, and handheld devices. (S)

Analysis of Strategic Factors Strengths International brand name. Financial position. Market leadership. Weaknesses Market saturation. Public opinion. Adjustment to cultural differences after entering a foreign market. Supplier alienation. Past employee discrimination. Employee health benefits. International supplier employee violations.

Analysis of Strategic Factors Opportunities International expansion. Environmental leadership. Worker’s rights leadership. Community involvement. Social initiatives. Threats Strong U.S. competition. Changing demographics. Economic uncertainty. Current litigation. Employee unionization.

Strategic Alternatives and Recommended Strategy

Implementation

Evaluation and Control

References