Table Of Contents

Section A: Usama zunoon Page no

1 Introduction to wallmart……………………………………………. 3
2 Wallmarts vision and mission……………………………………… 3
3 Walmart Values, Culture, and Guiding Principles…………………. 4
4 Walmart Company Management………………………………… 4
5 Company financials and market position…………………………. .4
6 Company Overview………………………………………………. .5
7 History…………………………………………………………….. 5-6

Section B: Nayyab Ahmed

8 Success of Wall-Mart………………………………………….. 6
9 Reasons For Wall-Mart Success………………………………. 7
9.1 Wall-Mart’s Purpose……………………………………… 7
9.2 Wal-Mart’s Execution……………………………………. 7-8
10 Walton’s Legacy……………………………………………… 8
11 Walmart’s Organizational Structure………………………….. 8
12 Organizational Behaviour In Wal-Mart………………………. 9

13 Motivation/ Employee Engagement………………………….. 9

13.1 discount Card……………………………………………. 9

13.2 Profit-Sharing…………………………………………… 10
13.3 My Sustainability Plan (MSP) …………………………. 10
13.4 Open-Door Policy………………………………………. 10
13.5 Grassroot Employee-Opinion Survey………………….. 10
13.6 Management by Walking Around (MBWA)…………….10

14 Application of theories……………………………………… 11

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14.1 Maslow’s hierarchy of need theory………………………. 11

1. Physiological
2. Safety
3. Belongingness
4. Esteem
5. Self-actualization

14.2 Identification and analysis of problems that will be encountered by

wallmart………………………………………………………… 12

15 Strategies Used By Wal-Mart………………………………..12-13

15.1 Low Cost Leadership

15.2 Economies of Scale

15.3 Low Operation and Production Cost

15.3 Effective Supply Chain Management
SECTION C: Rida Rubab Malik
16 Pros and cons of Wall-mart………………………………….. 13-15
16.1 Pros…………………………………………………………………………..13
16.2 Cons…………………………………………………………………………. 14-15

17 Some Drawbacks of Walmart………………………………. 15-16

17.1 The company used foreign labor, including children

17.2 Walmart underpays women
17.3 It wasn’t a safe environment for employees
17.4 The company was notorious for wage theft:-
17.5 Walmart had a bad track record on animal welfare

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18 Walmart’s Weaknesses (Internal Forces)………………………………. 17

19 Major competitors of wall mart……………………………………………. 17

20 Walmart Organization Challenges…………………………………………….17-18

21 SWOT analysis of Walmart……………………………………………………….18

REFRENCES……………………………………………………………………………………19-20

Introduction to Walmart:

Walmart Inc. is an American multinational retail corporation that operates

a chain of hypermarkets, discount department stores, and grocery
stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam
Walton in 1962 and incorporated on October 31, 1969. It also owns and
operates Sam's Club retail warehouses. As of January 31, 2019, Walmart has 11,361
stores and clubs in 27 countries, operating under 55 different names. The company
operates under the name Walmart in the United States and Canada, as Walmart de
México y Centro America in Mexico and Central America, as Asda in the United
Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly
owned operations in Argentina, Chile, Canada, and South Africa. Since August 2018,
Walmart only holds a minority stake in Walmart Brazil, with 20% of the company's
shares, and private equity firm Advent International holding 80% ownership of the
company.i
Walmart is the world's largest company by revenue over US$500 billion, according
to Fortune Global 500 list in 2018 as well as the largest private employer in the world
with 2.2 million employees. It is a publicly traded family-owned business, as the
company is controlled by the Walton family. Sam Walton's heirs own over 50 percent
of Walmart through their holding company, Walton Enterprises, and through their
individual holdings.Walmart was the largest U.S. grocery retailer in 2019, and
65 percent of Walmart's US$510.329 billion sales came from U.S. operations.
The company was listed on the New York Stock Exchange in 1972. By 1988,
Walmart was the most profitable retailer in the U.S., and by October 1989, it had
become the largest in terms of revenue. ii Originally geographically limited to
the South and lower Midwest, by the early 1990s, the company had stores from coast
to coast: Sam's Club opened in New Jersey in November 1989 and the first California
outlet opened in Lancaster in July 1990. A Walmart in York, Pennsylvania opened in
October 1990: the first main store in the Northeast.
Walmart's investments outside North America have seen mixed results: its operations
and subsidiaries in the United Kingdom, South America, and China are highly
successful, whereas its ventures in Germany and South Korea failed.

Walmart Vision and Mission

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Walmart was started with a vision of being the best retailer in the hearts and minds of
consumers and employees. The company’s aim to become a top retailer in the retail
industry has already been achieved. The company has also greatly influenced the
minds of consumers and employees in terms of financial benefits. The company’s
employees earn wages while consumers save money thanks to the subsidized prices of
Walmart’s commodities.iii

Walmart’s mission is to save people money so that they can live better lives. The
company’s slogan, “Save money. Live better,” is synonymous with the company’s
mission. Walmart sells commodities at reduced prices, and this helps consumers save
money.

Walmart Values, Culture, and Guiding Principles

Culture is the foundation of all operations at Walmart. According to Walmart, culture
is value in action. The company serves to deliver superior customer service, create a
great front-line work environment and improve performance to achieve the purpose of
saving people money so that they can lead better lives.iv

The company’s values are service to the customer, respect for individuals, striving for
excellence, and action with integrity. Walmart fosters a culture of integrity, and this is
promoted by global ethics. Walmart upholds their policies for ethical behavior
everywhere they have operations.

The company is guided by the principles of a winning work environment, being true
to who they are, and enhanced experience.

Walmart Company Management

Walmart’s management philosophy is commitment to business, to control company
expenses, celebrate success and effective communication with company partners.
Other features of the company’s management philosophy are motivation, listening,
and appreciation, exceeding customer expectation and forward progression.

Walmart’s leadership structure is made up of an executive management team lead by

Doug McMillon, the President, and CEO of Walmart, and a board of directors chaired
by Gregory Penner.v

The management style at Walmart is mainly based on transformational and

transactional management. Other aspects of management at Walmart include charisma,
vision, ethics, strategy and even distribution.

Company financials and market position

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In 2016, Walmart reported a total revenue of $482 billion. The company had 2.3
million associates, more than 11,500 retail locations, 16 e-commerce websites in 11
countries, apps and a dynamically optimized supply chain. The company was able to
return more than $10 billion to shareholders through dividends and share purchases.
The company also announced a dividend increase to $2.00 per share.

Walmart is the world’s largest retailer and grocery chain by sales. Walmart’s business
segments include Walmart stores, Sam’s club and Walmart international. Walmart
stores are responsible for the company’s largest revenue, accounting for
approximately 65 percent of the company’s revenue. Walmart international and Sam’s
club account for 25 and 10 percent of the company’s revenue respectively. The
company depends heavily on China for manufacturing its market merchandise, and
many of the company’s suppliers also manufacture their products in China

Company Overview:

As of January 31, 2019, Walmart's international operations comprised 5,993

stores and 800,000 workers in 26 countries outside the United States. There are
wholly owned operations in Argentina, Brazil, Canada, and the UK. With 2.2 million
employees worldwide, the company is the largest private employer in the U.S. and
Mexico, and one of the largest in Canada. In fiscal 2019 Walmart's international
division sales were US$120.824 billion, or 23.7 percent of total sales. International
retail units range from 1,500 to 186,000 square feet (140 to 17,280 square meters),
wholesale units range from 25,000 to 155,000 square feet (2,300 to 14,400 square
meters) and other units (including stand-alone gas stations in the United Kingdom)
range up to 2,200 square feet (200 square meters).Judith McKenna is the president
and CEO.vi

Central America
Walmart also owns 51 percent of the Central American Retail Holding Company
(CARHCO), which, as of January 31, 2019, consists of 811 stores, including 250 stores
in Guatemala .97 stores in El Salvador ,105 stores in Honduras ,103 stores in
Nicaragua) and 256 stores in Costa Rica.
Canada
Walmart has operated in Canada since it acquired 122 stores comprising
the Woolco division of Woolworth Canada, Inc in 1994. As of January 31, 2019, it
operates 411 locations (including 339 supercenters and 72 discount stores)[1][2] and, as
of June 2015, it employs 89,358 people, with a local home office in Mississauga,
Ontario.[144] Walmart Canada's first three Supercenters (spelled in Canadian English)
opened in November 2006 in An caster, London, and Stouffville, Ontario.[145]The
100th Canadian Supercenter opened in July 2010, in Victoria, British Columbia.
United Kingdom

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Walmart's UK subsidiary Asda (which retained its name after being acquired by
Walmart) is based in Leeds and accounted for 42.7 percent of 2006 sales of Walmart's
international division. In contrast to the U.S. operations, Asda was originally and still
remains primarily a grocery chain, but with a stronger focus on non-food items than
most UK supermarket chains other than Tesco. As of January 31, 2019, Asda had 633
stores, including 147 from the 2010 acquisition of Netto UK. In addition to small
suburban Asda Supermarkets, which has 209 locations,[2] larger stores are branded
Supercenters, which has 32 locations. Other banners include Asda Superstores (341
locations), Asda Living (33 locations), and Asda Petrol Fueling Station (18 locations).
In July 2015, Asda updated its logo featuring the Walmart Asterisks behind the first 'A'
in the Logo. In May 2018, Walmart announced plans to sell Asda to rival Sainsbury for
$10.1 billion. Under the terms of the deal, Walmart gets a 42% stake in the combined
company and about £3 billion in cash. In April 2019, United Kingdom's Competition
and Markets Authority blocked the proposed sale of Asda to Sainsbury.
History
In 1945, businessman and former J. C. Penney employee Sam Walton bought a
branch of the Ben Franklin stores from the Butler Brothers. His primary focus was
selling products at low prices to get higher-volume sales at a lower profit margin,
portraying it as a crusade for the consumer. He experienced setbacks because the lease
price and branch purchase were unusually high, but he was able to find lower-cost
suppliers than those used by other stores and was consequently able to undercut his
competitors on pricing. Sales increased 45% in his first year of ownership
to US$105,000 in revenue, which increased to $140,000 the next year and $175,000
the year after that. Within the fifth year, the store was generating $250,000 in revenue.
When the lease for the location expired, Walton was unable to reach an agreement for
renewal, so he opened up a new store at 105 N. Main Street in Bentonville, naming it
"Walton's Five and Dime". That store is now the Walmart Museum, The company
was incorporated as Wal-Mart, Inc. on October 31, 1969, and changed its name
to Wal-Mart Stores, Inc. in 1970. The same year, the company opened a home office
and first distribution center in Bentonville, Arkansas. It had 38 stores operating with
1,500 employees and sales of $44.2 million. It began trading stock as a publicly held
company on October 1, 1970, and was soon listed on the New York Stock Exchange.
The first stock split occurred in May 1971 at a price of $47 per share. By this time,
Walmart was operating in five states: Arkansas, Kansas, Louisiana, Missouri, and
Oklahoma; it entered Tennessee in 1973 and Kentucky and Mississippi in 1974. As
the company moved into Texas in 1975, there were 125 stores with 7,500 employees
and total sales of $340.3 million, In 2000, H. Lee Scott became Walmart's President
and CEO as the company's sales increased to $165 billion.[33] In 2002, it was listed for
the first time as America's largest corporation on the Fortune 500list, with revenues of
$219.8 billion and profits of $6.7 billion. It has remained there every year except 2006,
2009, and 2012. vii
In 2005, Walmart reported US$312.4 billion in sales, more than 6,200 facilities
around the world—including 3,800 stores in the United States and 2,800 elsewhere,
employing more than 1.6 million associates. Its U.S. presence grew so rapidly that
only small pockets of the country remained more than 60 miles (97 kilometers) from
the nearest store
In November 2005, Walmart announced several environmental measures to
increase energy efficiency and improve its overall environmental record, which had

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previously been lacking, In 2006, Walmart announced that it would remodel its U.S.
stores to help it appeal to a wider variety of demographics, including more affluent
shoppers. As part of the initiative, the company launched a new store in Plano, Texas
that included high-end electronics, jewelry, expensive wines and a sushi bar.
Walmart's truck fleet logs millions of miles each year, and the company planned to
double the fleet's efficiency between 2005 and 2015. The truck pictured on the right is
one of 15 based at Walmart's Buckeye, Arizona, distribution center that was
converted to run on biofuel from reclaimed cooking grease made during food
preparation at Walmart stores.

Success of Wall-Mart
While Wall-Mart is celebrating, other major retailers are struggling. Macy’s, the
nation’s second-largest department store, had its share price plummet 17% after weak
Q1 earnings. For fiscal 2017, the retailer is projecting a 3.2 to 4.3% decline in sales.
J.C. Penney saw a 15.3% decline following its poor earnings report. And Nordstrom,
revered for its customer service practices, saw an 11.3 % drop after its Q1 results,
while Kohl’s slumped nearly 8% after disappointing financial. The retail sector
overall is showing a 0.8% negative price performance, propped up only by the success
of Wal-Mart, Target, and Home Depot. It is a dismal picture of a major industry, and
the fallout could severely damage the economy as stores continue to close their doors
and people lose jobs.viii

Reasons For Wall-Mart Success

Why is Wall-Mart winning when most of the retail market is tanking? Two reasons:

1. The company has stayed true to its core purpose.

2. It continues to effectively execute to fulfill its purpose.

1- Wall-Mart’s Purpose
Sam Walton started Wal-Mart in 1962 with one simple goal: to “help people save
money so they could live better.” Despite its current size and history, the organization
has never lost sight of this purpose. Even today, helping its customers save money is
central to everything the retailer does, 24 hours a day.

While many other retailers and businesses may be focusing on how they can improve
their profit-and-loss statements (P&Ls), Wal-Mart is obsessed with how it can save
more people money. Its focus is laser sharp and unwavering. But for most business
people, this simple yet powerful shift in focus is uncomfortable. It means moving
away from the safety of what they learned in business school or management books. It
requires shifting from managing a P&L to managing a business.

Wal-Mart improves its P&L every time it is able to save a customer money. If the
store does this consistently, patrons are able to put their savings toward other areas of
their lives that are important to them — a child’s education, a family vacation,

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retirement savings, or a rainy-day fund. Because of Wal-Mart’s ability to effectively
fulfill its purpose, customer loyalty is strong and personal.

Customers don’t walk into Wal-Mart expecting to find assistance in every aisle,
employees who will carry their shopping bags to their cars, or expensive artwork on
the walls. They expect to find the lowest prices on products they can grab off the
shelves quickly. That is Wal-Mart’s purpose and its brand promise — nothing more,
nothing less. It is simple and unique to Wal-Mart.

Adding value for customers or clients creates meaning for employees. The more
people working for an organization understand how the company contributes
positively to customers, their communities, and the world, the more they are engaged
to help. This same principle applies for customers, too. Communication is key.

2- Wal-Mart’s Execution
Every action Wal-Mart takes at every level of the organization supports the retailer’s
purpose. Wal-Mart makes a point of keeping its costs down so it can sell products for
less. Extra trimmings are simply not part of Wal-Mart’s formula

High prices and inventory, excessive product returns, and disruption to the supply
chain all increase the cost of goods sold. This, in turn, impacts Wal-Mart’s ability to
fulfill its purpose, and if it fails to fulfill its purpose, it becomes like every other
retailer. Customers begin to shop elsewhere, sales and profits decline, and Wal-Mart
joins the list of retailers struggling to keep their heads above water.

Wal-Mart’s purpose requires tightly controlled costs and executional excellence from
every employee and every partner. Running smooth and lean is the only option. If
pennies matter to customers, they need to matter even more to Wal-Mart and its
employees.

Because Wal-Mart has a clearly defined purpose and a culture that supports that
purpose, employees, job candidates, and customers all know what to expect when
they arrive. This expectation helps drive the right people to the business. If you are
looking for a high-end shopping experience or posh working environment, you won’t
be knocking on Wal-Mart’s door. However, if you want to save money or are
passionate about helping others do so, Wal-Mart is a good fit.ix

Believing what the organization believes is key. This translates into honest and
personal connections and a sincere interest in helping fulfill the intended purpose.
From an execution standpoint, fulfilling Wal-Mart’s purpose means selling more
products to more people for less, becoming more profitable, and continuing the cycle.

Walton’s Legacy
Sam Walton rallied his employees with, “If we work together . . . we’ll give the world
an opportunity to see what it’s like to save and have a better life.” This is meaningful
to people — both employees and customers.

Walton changed the face of retail through his commitment to balancing purpose and
execution in his business. If Wal-Mart promised low prices but ran a poor business
with substandard execution, the brand promise would be worthless. Customers would

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fail to believe in or trust the business and start shopping elsewhere. Wal-Mart leads
the pack because of its focus and commitment to its purpose and its ability to
out-execute its competition in line with that purpose

Walmart’s Organizational Structure

Walmart has a hierarchical functional organizational structure. This structure has two
features: hierarchy and function-based definition. The hierarchy feature pertains to the
vertical lines of command and authority throughout the organizational structure. For
example, except for the CEO, every employee has a direct superior. Directives and
mandates coming from the top levels of the company’s management are implemented
through middle managers down to the rank-and-file employees in Walmart stores. On
the other hand, the function-based definition feature of the company’s corporate
structure involves groups of employees fulfilling certain functions. For example,
Walmart has a department for the function of human resource management. The
company also has a department for the function of information technology, and
another department for the function of marketing. These are just some of the
numerous function-based departments in Walmart’s organizational structure.

The main effect of Walmart’s hierarchical functional organizational structure is the

ability of corporate managers to easily influence the entire organization. For example,
new policies and strategies developed at the company’s corporate headquarters are
directly passed on to regional managers down to the store managers. In this way,
effective monitoring and control are achieved through Walmart’s hierarchical
functional organizational structure. However, a downside of this corporate structure is
that it has minimal support for organizational flexibility. The lower levels of the
organizational structure cannot easily adjust business practices because of the lengthy
communications and approval process involving the middle managers and corporate
managers at Walmart’s headquartersx

Organizational Behaviour In Wal-Mart

The organizational culture at the company stores is based on four beliefs:

 Service to customers
 Respect for the individual
 Strive for excellence
 Action with integrity (Lombardo 2017)

As can be seen from the list, company prioritizes customers in its operations above
all and thus, makes it to be an ideal organizational culture in the world. The company
contributes almost three per cent to the US economy and for decades, it has built an
image to have impeccable logistics with everyday low prices (Mourdoukoutas 2016).

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There is retail, hourly, corporate, healthcare, technology and campus jobs in the
company

Motivation/ Employee Engagement

Walmart leaves no stone unturned to make its employees feel an integral part of the
company. Right from the recruitment, employees are motivated to participate in
company’s growth in myriads of forms. To symbolize this, it came with the slogan,
“Our people make the difference”on the associates’ name tags (Wahba 2015)
The company boasts of striving to enhance the employee engagement using both
intrinsic and extrinsic rewards. Intrinsic rewards are supposed to be driven solely by
interest and enjoyment in the work and has no dependence on rewards or external
management pressure. On the other hand, extrinsic rewards include monetary
incentives, gifts or recognitions etc. Put another way, these benefits are given in the
form of healthcare or financial benefits.
For instance, following are some of the explicit endeavors by the company in the
present context.

Discount Card
All the associates are given a ‘Walmart discount card’ that offers a 10 per cent off on
regularly priced general merchandise and fresh produce at any Walmart store in the
country. To motivate the new employees, they are given the discount cards only after
the three-month probation period (news.walmart.com 2017)

Profit-Sharing
The profit-sharing depends on the store’s performance from May through July of a
given year when the store’s performance exceeds expectation and customer service
goals of that particular store (news.walmart.com 2017). In the year 2015, the company
announced a two-year budget for the profit sharing plan at an estimated investment of
$200 million in cash bonuses. This concept of sharing profit with all the employees
including part-time and full-time associates is rare to be seen in retail market

There are numerous ways used by the company to make the employees engaged and
motivated all the time. They can be summarized as below:

My Sustainability Plan (MSP)

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It is also commonly known as MSP. Started in the year 2010, Walmart urges
employees across all the stores to adopt goals focusing on healthy life, care for the
planet and getting the maximum out of the life. The company has made certain
objectives like My Health (eating healthy, getting active, reducing stress, quitting
tobacco), My Planet (saving water and energy, reducing waste, enjoying nature), and
My Life (learning new skills, managing money, making quality time, helping others)
(Apte et al. 2017:48).

Grassroot Employee-Opinion Survey

This is one of the old school management by objective (MBO) principle, implemented
by Walmart, grassroots surveys target employee work issues like satisfaction with
company management (Bushnell et al 2015). Managers getting bad score on
grassroots surveys could get demoted or fired

Open-Door Policy
The company uses open-door policy for addressing any concerns or employee
problems. This involves issues like workplace bully, rights violation, unfair policy or
discontent vis-à-vis any store practice. Any issue identified by the management is
handled very meticulously (Jin 2014)

Performance Review Process

The employees are assessed based on SMART- Specific, Measurable, Action-oriented,
Realistic, and Time-bound. It is believed that the regular performance review helps
keep the employee conscious about her current standing against expectations (Wang
et al. 2017:109).

Management by Walking Around (MBWA)

Walmart uses a unique strategy called MBWA to manage its operations enhancing
employee engagement. Managers walk personally to different employees to address
any concerns while she is on-the-job if any (Gopalkrishna et al. 2016:99). Walmart
has realized it long time back that mere pay-check is not enough to engage the
employees completely. Rather, positive reinforcement techniques like the ones
listed above are required to build a bridge between employees and managementxi

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APPLICATION OF THEORIES
MASLOW’S HIERARCHY OF NEEDS THEORY

1. Physiological

According to Associate Stock Purchase Plan, Wal-Mart enabled all employees to

access company’s shares by selling stock to them at a discounted price and without
brokerage fee. Wal-Mart implemented a cash incentive plan for employees to get
additional income depend on company’s performance. In addition, associate break
rooms are provided to tired employees to take a rest. By implementing Associate
Discount Card, Wal-Mart employees have the privilege to enjoy various discounts
in-store and online at Walmart.com, including 10% off fresh fruits and vegetables.
Moreover, employees are granted exclusive discounts on travel and entertainment.

2. Safety

Wal-Mart motivates employees through health and well-being benefit. All employees
at Wal-Mart and their immediate family can get a health insurance at a very low price
which includes primary doctor, pharmacies, vision, and dental. Wal-Mart also gives
free confidential counseling and health information service to employees such as Quit
Tobacco program which is specially designed for smoking employees. 401(k) plan is
established by Wal-Mart as a retirement plan for employees to secure their benefit
after retirement.

3. Belongingness

Sam Walton, founder of Wal-Mart had suggested a new way of treating his associates
by calling their first name and displaying only the first name on the ID badge.
Everyone in the company is getting more intimate by calling the other’s first name
because it can create a family-oriented business instead of boss-oriented one.
Wal-Mart had also renamed its human resource department as a "people department"
to create a big family working atmosphere.

4. Esteem

According to "New York Time Archives", Wal-Mart has expanded their gender
antidiscrimination policy as well as new definition of "family" that included same-sex
partners. In order to solve gender imbalance in management of Wal-Mart, CEO Mike
Duke announced a President's Global Council of Women Leaders to help boost the
share of female managers at Wal-Mart. This is a good way to motivate female
employees because they feel respected by others in workplace. In 2011, 53% of
associates promoted in Wal-Mart U.S. were women.

5. Self-actualization

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Wal-Mart is targeting college graduates and those completing their MBAs by offering
leadership development program. The Leadership Internship Program is an
opportunity for full-time MBA students to realize their potential and talent. It
provided by Wal-Mart to associates through mentoring programs, sponsorship
programs, various leadership courses and Associate Resource Groups. Through
Diversity Goals Program, nearly 60,000 managers are held accountable for elevating
the standards of diversity and inclusion throughout our company, with up to 15% of
management bonuses and 10% of performance evaluation scores tied to their diversity
goals achievement. As a part of women’s economic empowerment initiative launched
by Wal-Mart, 234 female associates at Wal-Mart Mexico completed taking the Stage,
a program focused on developing large numbers of women into organizational
leaders.

IDENTIFICATION AND ANALYSIS OF PROBLEMS

THAT WILL BE ENCOUNTERED BY WAL-MART
MASLOW’S HIERARCHY OF NEEDS THEORY

When Wal-Mart applies Maslow’s Needs Hierarchy Theory in motivating employees,

it is hard to meet the needs and requirements of every employee. In physiological
need, employees prefer higher minimum wages and paid overtime hours. If Wal-Mart
takes approach to increase minimum pay, it will add cost to the operating expenses
and inflict adverse effect to profit margin. This approach is contradictory to Wal-Mart
slogan "Save money. Live better" and will burden consumers due to the price rise in
goods. Consumers may easily switch to other competitor such as Costco Wholesale,
Target, and J.C. Penny and so forth.

Employees who involve in gender antidiscrimination campaign will strive more for
esteem need than other needs. Female employees prefer their work recognition and
promotion to management department. After fulfilling the female employees’ self
esteem need, it seems unfair to male employees. Wal-Mart will face gradually gender
imbalance in workforce and have to monitor this case from time to time.

At Wal-Mart, a district store manager earns more than ten times of an average
full-time basis employee. This income inequality arises from esteem need and
self-actualization needs fulfillment may diminish the benefits from fulfillment of
belongingness need among employees. As an example, the family-oriented working
atmosphere will turn weaker due to argument in income inequality.xii

Strategies Used By Wal-Mart

Low Cost Leadership

To arrive at such consumer-friendly rates, Walmart focuses on the strategy of low
cost leadership. This strategy gives them a competitive advantage over their rivals. It

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maintains a low cost of operation, and this enables Walmart to produce and sell goods
of competitive or even better quality, at lower costs than other retailers. Walmart
gradually increased its market share by striving to decrease its cost of operation, even
lower than other retail chains. It did so by offering high volumes of basic
commodities, and by limiting or cutting back on personalized service. It looks to
innovate not by focusing on new product development, but by concentrating
extensively on process improvement.

Economies of Scale
Walmart benefits from the concept of economies of scale, which causes its average
production costs to dramatically fall, and output to increase. It does this by purchasing
materials in bulk from vendors by having long-term contracts in place. Another factor
is Walmart tries to obtain low interest rates from banks when it borrows large sums of
money. It also tries to reduce its marketing costs by distributing its advertising costs
over a wider output range. These factors are instrumental in reducing their average
production costs. Targeting the mass market with tried and tested products has always
been Walmart's strategy

Low Operation and Production Costs

Walmart maintains low operation and production costs by using standard and less
number of component parts. It tries to keep overhead expenses to a minimum by
offering low wages to workers and leasing sites in low-rent areas. Goods are
manufactured in countries where labor is very cheap. To keep up with low operation
costs in every aspect of its business, it controls production costs, and limits costs
involved in outsourcing, distribution, advertising, and research and development.

Effective Supply Chain Management

Walmart started the EDLP (Every Day Low Prices) approach. To make the most out
of this technique, Walmart also has a very effective supply chain management in
place, to ensure it keeps its prices low. It maintains a tight control over its logistics,
transport, and inbound supplies. Being a tough negotiator, it exerts a fair deal of
bargaining power over all its suppliers. It ensures that its suppliers maintain very low
production prices and produce items on a large-scale. This enables Walmart to buy
bulk quantities of the product at the lowest price possible.xiii

Pros and cons of Wall-mart

Pros:

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1. Low prices: Walmart sells products at lower prices than other retailers. Shopping
in the store will save you a lot of money. This chain of stores is known for the low
prices of products and other retailers can’t compete with them.

2. Diverse business model: Walmart has extended its operation to other countries
offering the investors with diverse business models. Opening branches to other
countries lead to the growth of the business and expose investors to more wealth.

3. A wide variety of products: there is a wide variety of products you can choose
from in the chain of stores ranging from food products, electronics, groceries, car
repairs, and clothes among many things in a single trip.

4. Economy: Walmart boasts the economy of America and enables low-income

earners to be able to afford items which would otherwise be expensive for them. Price
deductions provide a lot of benefits to American citizens.

5. Great entertainment: There are many departments and you can walk through the
big store viewing different items in the store.

6. Employment opportunities: Walmart is the biggest private employer in the US

and has contributed significantly to the economy of the country. There are more jobs
created for American citizens.

7. Job security: Employees are assured of their job in the stores. No matter how
tough the economy, consumers will always shop for items.

8. Reduce poverty rate: Since 1990, Walmart has reduced the poverty level by
two-thirds. It has lifted more than one billion people out of poverty. The chain of
stores is a great force to reckon with.

9. Additional businesses: A Walmart store build in a certain location attracts more

businesses to be started in the area. People from the surrounding area will travel to do
shopping within that area.

10. Wealth distribution: Walmart distributes wealth between the rich countries and
the poor. Workers with no skills can take a job in the Walmart factory. This helps
them boost their standards of living.xiv

Cons:
Low wages: Walmart pays workers low wages and most of the time they focus on
hiring part-time workers in order to cut down on total wages paid.

Anti-employee policies: Walmart does not support their employees’ and most of the
time they’re mistreated. The employees’ purpose is to fit into the philosophy and the
corporation is only concerned about itself.

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 Illegal citizens and racism: There is a lot of racism and gender discrimination in the
stores. In 2003, the Corporation was in the headlines for hiring illegal citizens to do
cleaning after opening hours.

Micromanagement: There is a lot of micromanagement of workers in the store and

rules are not properly enforced and have too many exceptions.

Health coverage: The Corporation doesn’t pay health insurance for the employees
and it pushes them to get government-funded programs like the Medicaid and public
housing instead of paying for them.

Work schedules: Your days off are always split and sometimes you may find you’re
only scheduled to work for only four hours a day. This may sometime hard to plan
for your personal life.

Global imbalances: The senior management are required to meet the compliance
goals over the best-qualified individual and this may make the managers result in
inappropriate techniques in order to demonstrate compliance.

Un-environmentally friendly operations: The Corporation was fined for violating

water quality laws and regulation in one of its construction sites. The company was
forced to create an environmental management plan which is worth billions in order
to improve its compliance with laws in every state.

Market differentiation: The stores operate on what works for one region should
work for another region. These techniques cannot work for all regions.

No participation in decision making: Employees don’t contribute their ideas and

opinion towards the growth of the chain of store. They receive orders on how to run
the stores.

Bad Healthcare Coverage

According to critics, Wal-Mart is a highly regarded household name that has one of
the worst health care policies in all of corporate America. To account for low wages,
it pushes employees to get on several government-funded programs, such as Medicaid,
public assistance and public housing. Since its founder’s death, it has been stated that
several of its policies have been changed for the worst. It is not that the company does
not offer health insurance to their employees; it just comes at a high price for workers
earning minimum wage.

Anti-Employee Policies
It is stated that Wal-Mart shows little to no respect to its employees, where they are
severely mistreated and their only purpose is to fit into the philosophy that the
company looks out for itself. Statistics shows that from 1999 to 2005 alone, the store
had been part of several class action lawsuits in different states involving hundreds of

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thousands of former and current employees who had their work hours and wages
tampered with, as well as abused.

Illegal Citizens and Racism

In 2003, Wal-Mart was exposed to the public and charged for hiring illegal citizens to
do some cleaning after hours. The case, which was led by the Immigration and
Customs Enforcement, lasted more than 4 years and produced a huge number of
arrests of undocumented workers. However, the company managed to evade criminal
sanctions by settling to pay millions of dollars and then disputed the claims racial and
gender discrimination. More evidence of racism from Wal-Mart stores has been
evident in the said cases.xv

Some Drawbacks of Walmart

The company used foreign labor, including children
It’s been estimated that over 50 percent of Walmart goods come from overseas
suppliers. This doesn’t just take away American jobs in favor of cutting costs; it also
creates a living hell for those forced to meet Walmart’s hefty supply needs. The
corporation has been accused of paying off officials in foreign companies in order to
keep many of the details silent, but various stories paint a gruesome picture.
A great example of this is Bangladesh, where the minimum wage for garment industry
workers is just $37 a month. The conditions in the facilities where these products are
made are incredibly unsafe.
To top it all off, it’s been noted in the past that many of the employees at Walmart’s
overseas factories may be underage. Of course, Walmart isn’t the only company who
has employed child labor, but as the United States’ top retailer, its continued use of
the practice is even worse. While the company claims to be changing many of these
policies, there is ample documentation which suggests otherwise. By now, child and
foreign labour has become such a key part of the fabric of Walmart, and of the
product they sell, it’s hard to imagine anything less than a complete overhaul of
Walmart’s business methods will change.

Walmart underpays women

Although working at Walmart may not necessarily be great for anybody, it may also
be additionally tough for women. As recently as 2015, despite the fact that women
account for as much as 57 percent of Walmart’s U.S. workforce , women were paid
$1.16 less per hour and if you think working at Walmart as a woman is hard already,
forget about working there when you’re pregnant.

It wasn’t a safe environment for employees

In addition to unsafe conditions in factories overseas, Walmart has been notorious for
endangering their workers at home, too. The most publicized instances of this have
been the company’s practice of night “lock-ins,” which literally locked in overnight
employees at several Walmart outlets, in order to make sure they stayed at their
jobs. Walmart employees have been found to be sicker on average than most
American workers, and it’s no wonder why. Though the company has taken various

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 steps to provide cheaper insurance , the result has simply been to give their workers
plans that include less care.

Wal mart isn’t just greedy. The company is the epitome of greed. As its overworked
and underpaid employees struggle to make ends meet, Walmart’s top brass make
billions, even as stock is dropping. Everything about the company is capitalism at its
worst.xvi

The company was notorious for wage theft:-

Besides mistreating their employees, Walmart has, in some ways, literally stole
money from them over the years. In one instance, the company forced employee to
buy new uniforms—when they could have just bought them new uniforms themselves.
The good part about these cases is that the workers who were wronged saw some of
the money they were owed returned to them. The bad part is that unless Walmart
shares drop more than six cents, the cycle is likely to continue.

Walmart had a bad track record on animal welfare:-

If the way Walmart treats people wasn’t enough to turn you against them, then
perhaps the way the company treats employee. Walmart was among the worst
companies when it comes to ensuring that the animal products its stores sell came
from livestock that was well-treated.

Walmart’s Weaknesses (Internal Forces)

Walmart’s weaknesses impose challenges on the firm’s ability to withstand the threats
also identified in this SWOT analysis. These weaknesses are directly related to the
company’s generic strategy and its implications in business development, capabilities,
resources, and profit margins. Walmart uses the cost leadership generic strategy,
which leads to the following weaknesses:

1. Thin profit margins

2. Easily copied business model
3. Competitive disadvantage against high-end specialty sellers

Thin profit margins are a typical effect of using the cost leadership strategy. Because
Walmart minimizes selling prices, it also needs to minimize profit margins and rely
more on sales volume. The cost leadership strategy also makes Walmart’s business
model easy to copy. The firm does not have significant competitive differentiation,
except for its business size and prices. Furthermore, high-end specialty retailers have
the upper hand in attracting quality-seeking buyers who have low sensitivity to price.
Thus, the weaknesses presented in this SWOT analysis of Walmart reflect business
vulnerability to innovative competitors and disruptions in the industry environment,
especially in the E business

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Major competitors of wall mart
The Everything Store is the most aggressive and dangerous competitor that Walmart
has ever faced. Amazon is capable of undercutting Walmart’s prices; and it offers the
ultimate in convenient shopping experiences, you can order everything you need from
your couch and never have to go to a store. A major problem for Walmart is that
Amazon steals the most affluent shoppers, at a time when its core customers are more
strapped for cash than they have been in a generation. Walmart recognizes the threat,
but it will take years to counter it. Walmart, and pretty much every other retailer,
ignored them.

There are several areas of concern for Wal-Mart. These can be divided up into
categories: Extensive labor relations problems, Community Relations Problems, and
Miscellaneous PR Problems. Extensive labor relation’s problems are common at
Wal-Mart. Generally, the company is opposed to Unionized labor. Wage issues, shift
scheduling, and workplace rights abuses are cited by labor groups. This seems to go
against its founding principles of respect for employees. The company is also in
frequent legal trouble with regulators and union groups in the courts xvii

Walmart Organization Challenges

Walmart is restructuring its U.S. store operations, and this will see the business
consolidate its business divisions from six to four. The company’s restructuring
comes in the wake of the recent changes in the global business dynamics. Walmart
completed the acquisition of jet.com in January 2017 in a bid to widen its online
presence and gain ground on their competitors.

SWOT analysis of Walmart

Strengths
Walmart’s main strength over the years has been its brand image. Walmart has been
and still is one of the biggest brands in the retail industry.

Walmart’s financial position is also solid as evidenced by the company’s total revenue
in 2016. The company earned a total revenue of $482 billion through its business
segments, Walmart stores, Walmart international and Sam’s club. The company has
also returned more than $10 billion to shareholders through share purchases and
dividends.

The company has an excellent IT infrastructure to support its rapid growth and serve
its large customer base.

Weaknesses
Recent times have seen the sales growth of Walmart decline. This is attributed to
reduced retail spending from customers despite lower fuel prices. The company is
under pressure from deflation in key product categories such as food. The effects of

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the dollar abroad also have an impact on Walmart’s operations. The company’s heavy
reliance on China for manufacturing makes it more vulnerable to currency rate
changes.

Walmart has also been criticized for the low wages that they offer their employees.
Walmart’s wages have been said to be too low to make ends meet. The company has
also been criticized about the long-term effects of the company’s large-scale sale of
cheap and sometimes hazardous imported goods.

Walmart’s management has also been questioned on a number of times. The

management at Walmart has been in the spotlight because of what many have termed
failure to connect with customers. The company has been said to have many managers,
and this has had an impact on customer service.

The company failed to keep up with changes in the retail environment. Organizational
change, management, and transformation have become prominent and permanent
features of the business landscape. Business organizations need to be able to adopt
such changes to their operations to keep abreast with their competitors. Walmart
hasn’t been able to adapt to these changes, and this has hurt their business operations.
Walmart missed the managerial revolution that has swept the American enterprise.

Some of Walmart’s business segments such as Sam’s club and e-commerce are
struggling against their rivals. The area of e-commerce, for instance, is lagging behind
Amazon’s, and this translates to a slower and weaker growth than Amazon.

Opportunities
Management strategy is an area in which Walmart can improve on. Recently the
company improved employ wages, but the management strategy remains unaddressed.
A large scope for further changes remain, and this could be addressed through
strategies to improve employee working conditions and morale. Organizational and
management restructuring would also improve customer experience and lead to larger
profit margins.

Emerging Asian markets also present major opportunities for the brand to gain and
form strategic partnerships with the local brands. Exploring auxiliary markets would
work for the best interest of the underperforming business segments such as
e-commerce and Sam’s club.

Threats

Walmart faces significant competition both domestically and internationally. The

e-commerce business segment as mentioned earlier faces stiff competition from
Amazon. Another company that poses a major threat to Walmart is Costco.

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Walmart heavily relies on China for its manufacturing, and thus a strong dollar
translates to low-profit margins for the company. The dollar has been growing
stronger in international markets, and this has seen Walmart’s profit margins
decline.xviii

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