GROUP B

kStrategic Management Assignment 7

1. What kind of organization structure do Wal Mart and K Mart choose to implement their diversification strategy? Wal Mart - Wal-Mart uses M-form organization structure to implement diversification startegy based on geographic scope of business and base on product. K Mart - K Mart using M-form organization structure to implement diversification strategy base on geographic scope of business. But not at all can implement all countries. K-Mart has - Wal-Mart was conducted product divisional department stores in the United States, Puerto structure, such as Wal-Mart stores (U.S), Sams Rico, the U.S. Virgin Island, and Guam which club (U.S) and International stores. The houses the largest K-Mart in the world. International segment yields about 20% of the - Kmart also exists in Australia and New companys overall business income and is Zealand (see Kmart Australia). responsible for several different types of - As of January 30, 2010, Kmart operated a restaurants and stores including Wal-Mart and total of 1,327 (13 closing by late May) Kmart Sams Club in 13 countries and Puerto Rico. stores across 49 states, Guam, Puerto Rico, and This divisional structure and approach works to the U.S. Virgin Islands. This store count Wal-Marts advantage because each division is included 1,361 discount stores, averaging open to focus its efforts on specific goals such as 92,000 sq ft (8,500 m2), and 33 Super Centers, product, service, or customers. Narrowing the averaging 165,000 sq ft (15,300 m2). focus really allows the company to perform more effectively because they are allowed to pinpoint - Due to their have different gographic scope to specific areas needing change and adjust earn profit, K-Mart conducted management division structure base on market area. appropriately. Comment:

2. How do the Wal-Mart and K Mart evaluate divisional performance? K-Mart - Wal-Mart using annual report from all - Base on evaluating financial performance from all division, K Mart could evaluate their division division to analyze and evaluate of divisional performance. Every years the CEO has to has been working very well or not. report about income and outcome company - Calculate financial ratios to evaluate the profit. financial health of a company. - Base on financial report from divisions, they know how do evaluation for divisional which - Like Wal Mart, K Mart also has to report income and outcome company profit every years. Wal-Mart has. Wal-Mart

GROUP B

3. Do Wal Mart and K Mart exploit any strategic alliance with other companies. Wal-Mart - Wal-marts strategic alliances: Mexica, China, Korean (joint venture), Books-A-Million (the third largest book retail chain in the U.S.), America Online (the worlds leading interactive services company), Ronald McDonald (fast food chain stones), Li & Fung (Hong Kong sourcing expert),Stanley Works (tool manufacture and supply. - Wal-Marts opened its first international store in Mexico City in 1991. The joint venture entry mode helped the company to manage severe cultural differences within the country and provided a base for Wal-Mart to learn more about their new market. Cifra provided a stepping stone entry in the country while enjoying a 50-50 joint partnership. Still, there were hurdles to tackle even with the best of cultural advice. For example, Wal-Mart paved large parking lots for their Mexican customers and then realized that much of their consumer base rode the bus to the store. Additionally, the high altitude was not taken into consideration and certain products would not work properly because of the condition. - Wal-mart kept an open mind and developed a shuttle service to bring its customers and large bags to and from different locations. K-Mart - K Marts strategic alliance: Martha Stewart Living Omnimedia (a diversified media and merchandising company), Citigroup (bank), Whitehall-Robins Inc. (one of Canada's leading providers of non-prescription pharmaceutical products), First Brands (UK Importer, automotive brand development and product distributor), Jaclyn Smith (clothing), G.J. Coles & Coy (second largest Australian retailer), The Daiei (Japan's biggest retailer), the Walden Book Company, Mario Andretti (automotive accessories), Fuzzy Zoeller (golf products), Softbank Corp., Yahoo! Inc. and SuperValu Inc., the Little Caesars Pizza Stations.