Wal-Mart Case Study
1. Based on the company's external and internal environmental analyses (using SWOT analysis), outline the primary factors impacting Wal-Mart's strategy. Organize these factors by Stakeholder Group to prioritize expectations and identify conflicting pressures on the organization. INTERNAL ENVIRONMENTAL ANALYSIS STRENGTHS Capital Market Stakeholders: ▪ Has grown substantially over recent years and has experienced global expansion. According to exhibit 3 in the case, Wal-Mart's revenue has consistently increased. In 1997, they had revenues of $99,627 billion and by 2007 their revenue increased 250% to $348,650 billion. This growth had an impact on Wal-Mart's net income, showing that they were able to control their expenses while continuing to grow and expand their operations. In 1997 their net income was $3,042 billion, by 2007 it had tripled to $11,709 billion. The strength of Wal-Mart is shown in their financial ratios. Compared with an average operating profit margin of 5.1 percent in the prior three-year period, Wal-Mart has averaged 6.0 percent in the past three years. They are consistent in providing shareholder equity, measuring 22 percent in 2007 which is close to their 10-year average. International revenue has been a constant source of sales growth for Wal-Mart, outpacing the revenue contribution from the Sam’s Club segment since 2001. Product Market Stakeholders: ▪ Established name brand that is identified with reasonable to cheap pricing and bargain pricing. Wal-Mart is a store that most individuals can shop at when they are on a low budget and still buy what they set out to buy. Wal-Mart is able to buy in bulk and gain large bulk discounts that are not available to other organizations, enabling them to pass on the discounts and pricing benefits to the customers thus furthering their reputation as a bargain store. A main focus of Wal-Mart's marketing is in its Every Day Low Price campaign. This is what Wal-Mart is known for and what makes them successful.