Walmart's New Strategy

WAL-MART'S NEW STRATEGY

AN ANALYSIS AND PLAN OF ACTION

INTRODUCTION

Wal-Mart has long been known for things both good and bad. For example, on one hand, they provide convenience for the shopper by offering a one-stop shopping experience at an affordable price. On the other hand, a Wal-Mart entering a smaller community can mean death and demise for small-town businesses whose services will now be served by a lower-priced Wal-Mart.

In late October of 2005, the CEO of Wal-Mart, Lee Scott, announced a new strategy. This strategy called for broad systemic changes in hopes of encouraging and achieving sustainability. This paper contains the following three parts: Part I. Analysis of Wal-Mart's strategy, Part II. Planning Process for IT at Wal-Mart, and Part III. Conclusion.

PART I: ANALYSIS OF WAL-MART'S STRATEGY

SWOT Analysis

Strengths

 Strong name recognition and customer base

 Largest retailer in the world

 High ability to have an impact socially and economically

 Pioneering abilities and experience

 Largest employer in the world

 Among the highest for net sales in the world

 Has maintained an aggressive growth strategy adding new stores at a high rate

 Global presence Weaknesses

 The source of public criticism over low wages, poor health care, killing the small town, discrimination, and violating child labor laws

 Price deflation because of purchasing a high quantity of items and having to sell at reduced cost (overstocking)

 Too many stores too close together

 High employee turnover rate

 Do not attract higher income customers

 History of making promises it can't keep in regards to earnings

 So many suppliers they are hard to track

Opportunities

 Because of company size and world infiltration, efforts supported can be accomplished

 No strong presence in many parts of Europe

 Room to increase efficiency of energy in both trucks and stores

 Reduction of emissions and solid waste

 Provision of affordable health care for all

 Wage improvements

 Affordable and convenient health care for all Threats

 Other low price vendors such as dollar stores can cause problems for Wal-Mart's ability to keep customers

 The lasting effects of the war in Iraq

 Strong pursuit of innovative technologies can cause suppliers angst and eventual inability to meet standards further alienating customer base

 Spreading self too thin to provide quality services

Ansoff's Analysis

Current Products New Products

Current Markets  Promote current sustainable resources available to customers

 Maintain customer base by offering shorter lines, lower prices, and accessible locations  Open more Wal-Mart clinics to reach more people

 Encourage diversity

 Pay employees sustainable minimum wages

 Encourage sustainable suppliers

New Markets  Add more and more products that are sustainable and offer them at affordable prices

 Make truck fleet more efficient

 Make stores and clubs more efficient by providing less solid waste

 Expand RFID technology

 Open stores in more outside countries

 Expand "Green" initiative into website  Partner with businesses to provide healthcare affordable for all

 Pursue regulatory and policy changes that promote energy efficiency and renewable energy

 Establish a program that gives suppliers preference for aggressively reducing emissions.

Strategic Alignment Maturity Summary

Assessment Criteria Score Justification of Score Implication of Score

Communication 2 Ð'* IT has an emerging understanding of the business

Ð'* Emerging business awareness of IT

Ð'* Inter/Intra-organizational learning is regular and clear

Ð'* The rigidity of protocol is emerging relaxed

Ð'* Knowledge sharing is structured around key processes

Ð'* The liaison(s) breadth and effectiveness is formalizes and structured Ð'* Effective communication between IT and business administrators can ensure inhibitors and enablers are high on the list

Ð'* Given that R&D is a big part of the strategy, the communication between parties must be a priority

Competency/Value Measurements 2, 3 Ð'* IT operates efficiently

Ð'* Business is focused on functional aspects

Ð'* Business and IT links are emerging

Ð'* Service level agreements are emerging across the