Wal-Mart - 2000

Prentice Hall, 2001 1

Vision Statement
To become the worldwide leader in retailing

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Mission Statement Components
1. Customers
2. Products or services
3. Markets
4. Technology
5. Concern for survival, profitability, growth
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees

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Mission Statement
Our fist responsibility is to provide all consumers (1) the best products
and services with guaranteed satisfaction under one roof. Wal-Mart
provides a wide array of products like toys, electronics, groceries,
jewelry, ladies, men, and children’s apparel, and hard goods (2) at
reasonable prices. We will continue to offer scholarships to deserving
high-school graduates (8) in hopes of providing students with a well-
deserved education. Consumers have been conveniently provided not
only with the use of on-line shopping (4) to show without ever leaving
home, but also with the concept of “one-stop shopping.” The Wal-Mart
team is devoted to everything that Wal-Mart has accomplished as a
universal competitor (3). We are dedicated in recruiting rewarding, and
retaining employees of good moral standing (9) by providing benefits
for excellent performance, providing clean environments to work in,
and by providing equal-opportunity for all individuals (7). We will
continue to offer the highest quality products at the lowest price (6) to
strive to be the best in the retail industry (5). 4
Opportunities
• Consumers want ease of shopping
• Internet shopping growing
• Dollar value increasing
• Similar shopping patterns worldwide
• Retail sales expected to increase
• Environment conscious consumers
• Elderly population growing
• Asian market virtually untapped by retail
• European Market untapped by retail

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Threats
• Regulation of Wal-Mart pharmacies
• Small towns do not want entry of Wal-Mart
• Bad media exposure for Kathie Lee Brand
• Variety of competition nationally, regionally and locally
• Substitute products more easily because of intense
competition

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Competitive Profile Matrix

Wal-Mart K-Mart JC Penny

Critical Success Weight Rating Weighted Rating Weighted Rating Weighted Score
Factors Score Score
Market Share 0.20 3 0.60 2 0.40 2 0.40
Price 0.30 4 1.20 2 0.60 1 0.30
Competitiveness
Financial Position 0.10 4 0.40 2 0.20 2 0.20
Product Quality 0.20 2 0.40 2 0.40 3 0.60
Consumer Loyalty 0.20 2 0.40 2 0.40 2 0.40
Total 1.00 3.00 2.00 1.90

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 EFE Matrix
Key External Factors Weight Rating Weighted Score
Opportunities
Consumers want ease of shopping 0.12500 4 0.50
Internet shopping growing 0.17500 2 0.35
Dollar value increasing 0.01250 2 0.03
Similar shopping patterns worldwide 0.00625 3 0.02
Retail sales expected to increase 0.00625 2 0.01
Environment conscious consumers 0.01250 3 0.04
Elderly population growing 0.05000 3 0.15
Asian market virtually untapped by retail 0.01250 1 0.01
European Market untapped by retail 0.10000 2 0.20
Threats
Regulation of Wal-Mart pharmacies 0.10 2 0.20
Small towns do not want entry of Wal-Mart 0.05 3 0.15
Bad media exposure for Kathie Lee Brand 0.05 3 0.15
Variety of competition nationally, regionally and 0.05 1 0.05
locally
Substitute products more easily because of intense 0.10 2 0.20
competition
TOTAL 1.00 2.30
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Strengths
• Customer oriented
• SAM’S Club customers able to buy in bulk
• Supercenters offer one stop shopping
• Satisfaction guaranteed programs promoting customer goodwill
• Buy from local merchants when possible
• Stock ownership and profit-sharing with employees
• Leads industry in information technology
• Ongoing development of its employees
• Strong community involvement

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Weaknesses
• No formal mission statement
• Membership only for SAM’S Club
• Keep poor performing employees on hand
• Old fashioned store policies
• Few women and minorities in top management

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 IFE Matrix
Key Internal Factors Weight Rating Weighted
Score
Strengths
Customer oriented 0.250 4 1.00
SAM’S Club customers able to buy in bulk 0.100 3 0.30
Supercenters offer one stop shopping 0.100 4 0.40
Satisfaction guaranteed programs promoting customer 0.025 3 0.08
goodwill
Buy from local merchants when possible 0.025 3 0.08
Stock ownership and profit-sharing with employees 0.025 4 0.10
Leads industry in information technology 0.025 4 0.10
Ongoing development of its employees 0.100 4 0.40
Strong community involvement 0.025 3 0.08
Weaknesses
No formal mission statement 0.012 2 0.02
Membership only for SAM’S Club 0.100 1 0.10
Keep poor performing employees on hand 0.100 1 0.10
Old fashioned store policies 0.013 2 0.03
Few women and minorities in top management 0.100 1 0.10
TOTAL 1.00 2.88

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TOWS Analysis
Strengths Weaknesses
1. Customer oriented 1. No formal mission statement
2. SAM’s Club consumers able to 2. Membership only for SAM’S
buy in bulk Club
3. Supercenters offer one stop 3. Keep poor performing
shopping employees on hand
4. Satisfaction guaranteed 4. Old fashioned store policies
programs promoting customer 5. Few women and minorities in
goodwill top management
5. Buy from local merchants when
possible
6. Stock ownership and profit-
sharing with employees
7. Leads industry in information
technology
8. Ongoing development of its
employees
9. Strong community involvement

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TOWS Analysis continued
Opportunities S-O Strategies W-O Strategies
1. Consumers wan ease of 1. Advertise more for shopping 1. Improve employment
shopping on-line (S8, O2) techniques to hire and keep the
2. Internet shopping growing best performing employees
3. Dollar value increasing 2. Expand internationally because (W3, W5, O6)
4. Similar shopping patterns of similar shopping patterns
worldwide (S3, O4, O8)
5. Retail sales expected to increase
6. Environment conscious
consumers
7. Elderly population growing
8. Asian Market virtually untapped
by retail
9. European Market untapped by
retail
Threats S-T Strategies W-T Strategies
1. Regulation of Wal-Mart 1. Buy from local merchants to 1. Allow consumers to buy in
pharmacies promote unity in the community smaller bulk without having
2. Small towns do not want entry (S5, T4) membership to SAM’S Club (W2,
of Wal-Mart T5)
3. Bad media exposure for Kathie 2. Build more Supercenters for the
Lee Brand increased demand for one stop
4. Variety of competition shopping (S3, T4)
nationally, regionally and
locally
5. Substitute products more easily
because of intense competition

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SPACE Matrix
Internal strategic position
Financial strength +5 +1 best to +6 worst Y axis: 5 + (-2) = 3
Environmental stability -2 -6 worst to –1 best

External strategic position

Competitive advantage -2 -6 unstable to –1 stable X axis: 6 + (-2) = 4
Industry strength +6 +1 best to +6 worst

Conservative FS Aggressive

CA IS

Defensive ES Competitive

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Grand Strategy Matrix
RAPID MARKET
GROWTH

Quadrant II Quadrant I

Wal-Mart

WEAK
COMPETITIVE STRONG
POSITION COMPETITIVE
POSITION

Quadrant III Quadrant IV

SLOW MARKET
GROWTH

2. Market penetration
3. Product development
4. Forward integration
5. Backward integration
6. Horizontal integration 15
7. Concentric diversification
The Internal-External(IE) Matrix
The IFE Total Weighted Score

Strong Average Weak

3.0 to 4.0 2.0 to 2.99 1.0 to 1.99
High I II III
3.0 to 3.99

Medium IV V VI
The EFE Total 2.0 to 2.99 Wal-Mart
Weighted
Score

Low VII VIII IX

1.0 to 1.99

GROW AND BUILD

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 QSPM
Strategic Alternatives
Build additional Improve
Key Internal Factors Supercenters SAM’S Club
Weight nationwide and operations
worldwide
Strengths AS TAS AS TAS
Customer oriented 0.25 --- --- --- ---
SAMS’S club consumers able to buy in bulk 0.10 1.00 0.10 4.00 0.40
Supercenters offer one stop shopping 0.10 4.00 0.40 1.00 0.10
Customer goodwill 0.03 --- --- --- ---
Buy from local merchants when possible 0.03 --- --- --- ---
Stock ownership and profit sharing with employees 0.03 --- --- --- ---
Leads industry in information technology 0.03 2.00 0.05 3.00 0.08
Ongoing development of its employees 0.10 2.00 0.20 1.00 0.10
Strong community involvement 0.03 --- --- --- ---
Weaknesses
No formal mission statement 0.01 --- --- --- ---
Membership only for SAM’S Club 0.10 1.00 0.10 2.00 0.20
Keep poor performing employees on hand 0.10 1.00 0.10 2.00 0.20
Old fashioned store policies 0.01 1.00 0.01 2.00 0.02
Few women and minorities in top management 0.10 1.00 0.10 2.00 0.20
SUBTOTAL 1.00 1.06 1.30

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QSPM continued
Build additional Improve SAM’S
Supercenters Club operations
Key External Factors Weight nationwide and
worldwide
Opportunities AS TAS AS TAS
Consumers want ease of shopping 0.13 4.00 0.50 3.00 0.38
Internet shopping growing 0.18 3.00 0.53 4.00 0.70
Dollar value increasing 0.01 3.00 0.04 2.00 0.03
Similar shopping patterns worldwide 0.01 4.00 0.03 3.00 0.02
Retail sales expected to increase 0.01 3.00 0.02 2.00 0.01
Environmental conscious consumers 0.01 --- --- --- ---
Elderly population growing 0.05 --- --- --- ---
Asian Market virtually untapped by retail 0.01 4.00 0.05 3.00 0.04
European Market untapped by retail 0.10 4.00 0.40 3.00 0.30

Threats
Regulation of Wal-Mart pharmacies 0.10 2.00 0.20 1.00 0.10
Small towns do not want entry of Wal-Mart 0.15 3.00 0.45 2.00 0.30
Bad media exposure for Kathie Lee Brand 0.08 --- --- --- ---
Variety of competition nationally, regionally and locally 0.15 3.00 0.45 2.00 0.30
Substitute products more easily because of intense 0.03 --- --- --- ---
competition
SUBTOTAL 1.00 2.67 2.17
SUM TOTAL ATTRACTIVENESS SCORE 3.72 3.47

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