Crafting and Executing Strategy- Walmart Case Analysis
Crafting and Executing Strategy: Case Analysis of Wal-Mart Stores, Inc.
1.0 Source Problem Wal-Mart Stores, Inc. faces a plethora of problems in just the past five years including a barrage of public criticisms calling for a change in the management strategies of Wal-Mart. The underlying problem or fundamental issue is the cost-based competition that Wal-Mart intensified through its obsession for cost minimization. In a way, Wal-Mart commenced and intensified price wars. Wal-Mart achieved sales less than its target so that it cut back prices during the holiday season and other occasions on various items including back to school products. By decreasing its price, Wal-Mart intended to draw more customers to make more purchases and enable the company to achieve its targeted sales (Thompson, Strickland & Gamble, 2007). The decline in sales was due to the saturation of the market as well intensifying competition resulting to demolition campaigns against Wal-Mart.
2.0 Secondary Problems Cost-based competition finds expression in specific short-term and long-term problems that Wal-Mart experienced. This finds expression through the reputation of Wal-Mart as a corporate bully because of its aggressive strategies sourcing and marketing its retail products.
2.1 Short-Term Specific Problems One specific short-term problem of Wal-Mart is the continuous price cuts it implements every year and even every season intended to make Wal-Mart as the retail store offering the lowest price. This was necessary for Wal-Mart to fulfill its promise of offering low prices always. As such, it needed to engage in continuous price promotions in order to achieve its promise. However, this also constituted a problem for Wal-Mart since its cost-based competitive strategy became subject to scrutiny not only by its competitors but also by employee and consumer groups (Thompson, Strickland & Gamble, 2007). This is also a dilemma since Wal-Mart
1.0 Source Problem Wal-Mart Stores, Inc. faces a plethora of problems in just the past five years including a barrage of public criticisms calling for a change in the management strategies of Wal-Mart. The underlying problem or fundamental issue is the cost-based competition that Wal-Mart intensified through its obsession for cost minimization. In a way, Wal-Mart commenced and intensified price wars. Wal-Mart achieved sales less than its target so that it cut back prices during the holiday season and other occasions on various items including back to school products. By decreasing its price, Wal-Mart intended to draw more customers to make more purchases and enable the company to achieve its targeted sales (Thompson, Strickland & Gamble, 2007). The decline in sales was due to the saturation of the market as well intensifying competition resulting to demolition campaigns against Wal-Mart.
2.0 Secondary Problems Cost-based competition finds expression in specific short-term and long-term problems that Wal-Mart experienced. This finds expression through the reputation of Wal-Mart as a corporate bully because of its aggressive strategies sourcing and marketing its retail products.
2.1 Short-Term Specific Problems One specific short-term problem of Wal-Mart is the continuous price cuts it implements every year and even every season intended to make Wal-Mart as the retail store offering the lowest price. This was necessary for Wal-Mart to fulfill its promise of offering low prices always. As such, it needed to engage in continuous price promotions in order to achieve its promise. However, this also constituted a problem for Wal-Mart since its cost-based competitive strategy became subject to scrutiny not only by its competitors but also by employee and consumer groups (Thompson, Strickland & Gamble, 2007). This is also a dilemma since Wal-Mart
References: Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2007). Crafting and executing strategy: The quest for competitive advantage (15th ed.). New York: McGraw Hill Irwin. Wal-Mart. (2008a). Wal-Mart Stores, Inc. Retrieved May 22, 2008, from http://walmartstores.com/media/resources/r_2571.pdf Wal-Mart. (2008b). 2006 Annual Report: Building Smiles. Retrieved May 22, 2008, from http://walmartstores.com/Media/Investors/2006_annual_report.pdf Read more: http://ivythesis.typepad.com/term_paper_topics/2010/06/crafting-and-executing-strategy-case-analysis-of-wal-mart-stores-inc.html#ixzz2MTVztBNU