SOCRATIX 2019

AN ANALYSIS OF WALMART’S COMPETITIVE AND GROWTH STRATEGIES

Contents
PROBLEM STATEMENT #1 ...................................................................................................................... 3
Introduction ........................................................................................................................................ 3
Industry Outlook and Analysis ........................................................................................................... 3
Walmart’s Value Chain Analysis ........................................................................................................ 3
Walmart – SWOT Analysis ................................................................................................................. 4
Walmart’s Strategic Plan .................................................................................................................... 5
Diversification into online streaming space .................................................................................. 5
Market Development ..................................................................................................................... 6
Leveraging Retail presence to ramp up E-commerce business .................................................... 6
Investment in Automation and Robotics ...................................................................................... 7
Competition with Amazon ............................................................................................................. 8
Other Strategies ............................................................................................................................. 8
Strategies to be discontinued ............................................................................................................ 9
Poor Employee and Labour relations ............................................................................................ 9
Discontinuing segments of products that have negative appeal ................................................. 9
Non-compatibility with core competency ..................................................................................... 9
PROBLEM STATEMENT #2 .................................................................................................................... 10
Introduction ...................................................................................................................................... 10
Walmart Business Model ................................................................................................................. 10
PESTEL analysis ................................................................................................................................. 11
Investments in EM............................................................................................................................ 11
Inorganic growth .............................................................................................................................. 12
Understanding the stakeholders ..................................................................................................... 12
Customer targets .............................................................................................................................. 13
Store layout and visual merchandising ........................................................................................... 13
Leveraging technology ..................................................................................................................... 14
Sustainability .................................................................................................................................... 14
ANNEXURES .......................................................................................................................................... 15
REFERENCES .......................................................................................................................................... 15

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PROBLEM STATEMENT #1

1) Prepare an appropriate strategic plan for Walmart on how it should be competing against its
competitors going forward (Target, Costco, Amazon and other mass retailers) in markets different
from those in which Walmart traditionally excelled.

Introduction
Walmart, the world’s largest retailer, has consistently for over four decades, achieved competitive
advantage though “Cost Leadership”, with its EDLP pricing strategy at the heart of it. The company’s
core competencies are its pricing, efficient supply chain and distribution network as they are difficult
for competitors to imitate. As a result, the company has grown in scale and has now become a
behemoth in the retail industry.

Industry Outlook and Analysis

Retail industry, being one of the oldest, has its life cycle greatly determined by the type of economy.
In developed countries, retail industry is mature and highly competitive. Thus, growth rates tend to
decrease. In order to sustain growth, firms have started to look at new forms of retailing. However, in
emerging economies (e.g. India), there is tremendous scope for growth as the industry is largely
unorganised. Hence, Walmart has emphasised on developing countries to look for growth prospects.

Before dwelling deep into the strategic plan of Walmart, an evaluation of the competitive landscape
and attractiveness of retail industry has been done using Porter’s Five Forces Framework.

Competition in Industry – The degree of competition is very high in retail industry since there are a
large number of players of varying sizes. The wide assortment of products and services that these
players offer intensifies the competition even more.

Bargaining power of buyers – This is typically very low in retail industry environment as there are a
large population of customers and average ticket sizes are small.

Bargaining power of suppliers – Suppliers are aplenty in retail industry and there is intense
competition amongst the suppliers to compete for limited real estate in stores. Hence their bargaining
power is weak as they can’t exert any significant leverage.

Threat of new entrants – The threat of new entrants is medium-high since firms can enter the industry
and compete of a plethora of parameters like geography, convenience, pricing etc.

Threat of substitutes – The threat of substitutes is low in since most of the products in retail industry
have little or no substitutes or the firms offer the substitute products as well.

Walmart’s Value Chain Analysis

In order to develop a strategic plan for Walmart, it is necessary to understand how Walmart creates
value for its customers.

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Primary Activities

Inbound logistics – Walmart has cultivated mutually beneficial relationships with its
suppliers. The scale of operations has also helped to press its suppliers for lower price.

Operations – Walmart retails products and services through a variety of store formats namely,
Neighbourhood markets, Supercentres, Sam’s club and Discount stores. It also has one of the fastest
growing e-commerce platforms. It currently has 11389 stores and has operations in 27 countries.[1]

Outbound logistics – Walmart, through its cross-docking strategy, has greatly increased the
efficiency of its supply chain by reducing the transit time. It also helps to keep inventory costs low,
which is passed on to the customers.

Marketing & Sales – Walmart’s EDLP strategy is at the forefront of its marketing strategy.
Walmart also spends billions of dollars to communicate its value propositions to its customers, thereby
making it one of the most recognizable brands worldwide. It was ranked #26 in Forbes’ List of most
valuable brands in 2019.[2]

Customer Service – Walmart, being in the retail industry, is focussed about providing its
customers with highest level of customer experience.

Secondary Activities

Infrastructure – Walmart has developed a robust infrastructure that has seamlessly

integrated its stores, supply chain and distribution network, even as the company has grown in size
with every passing year.

Human Resource – With customer service being a key element in retail, the value of human
resource is very important in Walmart’s scheme of things. Walmart has also received flak for its HR
policies.

Technology – With the scale of operations that Walmart in involved in, it has used technology
extensively for managing its supply chain, data and providing customer service.

Procurement – Walmart has strategically managed its relationships with its suppliers so as to
keep the costs lower. As a result, Walmart is able to pass on the cost benefits to its customers, which
has remained its source of competitive advantage.

Walmart – SWOT Analysis

Walmart’s competitive position in the retail industry can be analysed by using SWOT analysis.

Strengths - Walmart derives its strengths from its size and deep pockets. Its highly efficient and
distributed supply chain also augments its strength.

Weakness – Apart from its size of operations, its business model can be easily imitated. Also,
Walmart’s treatment of its employees leaves a lot to be desired.

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Opportunities – Walmart has good scope of establishing its footprint in developing countries where
organised retail industry has tremendous potential. With more emphasis being given on sustainability
and health, Walmart could utilise those to become a more socially responsible company.

Threats – Retail industry is one where there is an abundance of competition. With the dense
penetration of internet, retailing has moved into new forms with e-commerce playing a major role in
the way people shop. So, in addition to brick and mortar stores, Walmart also has to deal with threats
from online retailers.

Walmart’s Strategic Plan

Walmart, has for over four decades, achieved competitive advantage using its EDLP strategy. With its
domestic market maturing, competition getting intense and the advent of e-commerce, the company
has to adopt appropriate growth strategies going forward. Ansoff’s matrix has been used to chalk out
the company’s future growth strategy.
Markets Existing

Market Penetration Product development

Market Development Diversification

New

Existing Products New

To formulate growth strategies in markets different from those in which Walmart has traditionally
excelled, Walmart should adopt the two following strategies.

I) Diversification

II) Market Development

Diversification into online streaming space

With increased access to internet and availability of technologies that provide greater bandwidth, the
online streaming space brought upon a new market that has immense potential. Media consumption
in increasingly happening in digital format these days as they enable the customer to consume content
at their own convenience. The proliferation of smartphones has also made it possible to increasingly
access online content on the go. The online video streaming market was valued at $ 36.64 billion in
2018 and is estimated to grow at a rate of 19.6% till the first half of the next decade [6]. Companies
earn revenues from online streaming in two-fold ways (i.e.) subscription and advertising.

The major players in this industry are Netflix, Amazon, YouTube and Hulu. Netflix was one of the
earliest entrants in this industry, while Amazon sensed the opportunity that online streaming offers

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and rolled out its Prime Video in 2006. It has greatly benefited from advertising by extending the
service to all its Prime Members for free.

Walmart forayed into this market through acquisition of content delivery company, Vudu in 2010.
With its deep pockets, Walmart, through Vudu, was able to deliver content either via rental or buying,
which enabled it to have 25 million users in 2018[7]. Though the platform has been doing moderately
well, its competitors have taken the game forward by offering subscription-based service as well as
creating their own content. Walmart should focus on improving the platform and producing original
content. The company, with its strong retail presence and the enormous customer data, can use its
streaming service as a great platform for advertising, thereby monetising the opportunity. Producing
original content will enable the company to earn revenues from subscriptions as well.

Since Walmart enjoys a strong brand recall, particularly in North America, its online streaming
platform can be rebranded to have “Walmart” in its name. India, with its huge population and rapidly
expanding internet base, provides a goldmine for online streaming service companies. It is currently
dominated by players like Netflix, Amazon Prime and Hotstar. Walmart should tap into the Indian
market, which is still in the early stages of its growth.

Market Development
 Prioritise on developing countries that offer good scope of growth

While Walmart enjoyed tremendous success in USA, its growth started getting saturated due to the
developed nature of the economy. Hence, Walmart has embarked on international expansion. Its
journey in international markets started with Mexico in 1991, and as of Jan 2019, Walmart operates
in 26 countries. The company has mostly chosen emerging countries for its operations outside USA to
tap the immense growth potential in those countries. As of 2019, Walmart’s international business
generated 24% of its revenue [8]. The company growth in international markets has been mostly been
inorganic though a spree of acquisitions. While it has failed in some markets, most notably being
Germany, it is because of failure to understand the local tastes and due to competition.

Going forward, the company should prioritize its investments in developing countries where is good
room for growth. Most notably, Walmart should focus more on India and China. These two countries,
with their huge population, have tremendous potential. With FDI regulations getting eased in India,
Walmart should focus more on tapping the Indian market whose GDP is nearly touching $3 Trillion.[9]
Walmart has taken a great stride through acquisition of majority stake in Flipkart, which was their
largest acquisition till date. Flipkart, which already has a strong footprint in India, can be used as a
great platform to consolidate Walmart’s position in the Indian market. However, Walmart should be
wary of the diversity of Indian people and the competition present in India in the form of Amazon,
unorganised players and many niche players.

Leveraging Retail presence to ramp up E-commerce business

With a staggering 90% of America’s population living within 10 miles of a Walmart store [4], Walmart
has capitalised on its strong physical presence to improve its service levels of its e-commerce’s retail
wing, thereby improving the customer experience. It has done it in the following ways.

i) Pick-up Stores

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Through pick-up stores, customers can order online and pick those items up at any Walmart store. It
offers the convenience of selecting a time for pick up and getting the products delivered to the
customer’s car in minutes. This is a great way of using Walmart’s strong retail presence to cater to
customers who shop online. Walmart has also collaborated with Fed-Ex, with Fed-Ex offices acting as
pick-up centres in places that don’t have Walmart. With pick-up services mostly being used in
groceries, Walmart should focus on extending the pick-up service to more product segments.

ii) Deliveries

A significant percentage of costs involved in e-commerce is in shipping. Walmart has successfully used
its vast retail footprint to not only reduce shipping costs (which goes with its core competency) but
also improve the customer experience by providing last mile deliveries at tremendous speeds.

Investment in Automation and Robotics

 Use cutting-edge technologies to improve SCM and customer experience

Automation is disrupting the retail business model by removing the bottlenecks all along the value
chain. Any company that fails to understand the importance of automation will be left behind in the
race. With the thin margins that Walmart already is working on, automation is a great tool to remove
the redundancies in the supply chain, thereby enabling it to pass on the benefits to its customers.

Walmart has been using robots that can scan shelves, sort and pack items, thereby removing the time-
intensive chore that its human personnel will no longer have to do. It has also helped the company to
reduce its labour costs. Walmart has also deployed robots in its stores that roam around the aisles
and scan the shelves. Not restricting robotics to only the back-end processes, Walmart is also
researching voice technology to enable customers to chat with a robot during a purchase [5].

Automation is not only limited to improving the efficiency of the supply chain. Predictive analytics can
be greatly used in decision making, both internally and on behalf of the customer. Walmart has been
using a machine learning algorithm to predict the items that its frequent shoppers would buy every
week so that appropriate stock levels are maintained. It also uses data to offer suggestions that are
based on customer’s preferences and past purchases.

With blockchain technology at the heart of driving business transformations, Walmart could be an
early adaptor of blockchain, particularly in its financial services and supply chain applications, thereby
preventing fraud and making them more efficient.

These initiatives will enable Walmart to take the fight to Amazon in the digital space. Amazon, which
is currently considered the gold standard of automation, not only uses it in back-end processes but
also has completely automated stores namely, Amazon Go stores.

Walmart is wary of the threat posed by Amazon, its chief competitor in the e-commerce. Hence, it has
started taking the necessary steps in the right direction by utilizing its huge reserves of capital and
through innovation.

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Competition with Amazon
While Walmart has had many competitors in that past as well as present, in the nearer future, its
primary competitor will be Amazon. According to The 22 Immutable Laws of Marketing, Law of Duality
states that in the longer run, every market will become a two-horse race. Both companies have their
stronger suits and both have deep reserves of cash.

While Walmart is leading in brick-and-mortar space, Amazon is a force to reckon with in online
retailing. Both the companies are taking great strides to grow in areas where they are lacking. While
Amazon is trying to increase its physical footprint through a spree of acquisitions, most notable being
Whole Foods, Walmart is investing heavily to ramp up its technology arm.

But with services like pick-up and same day deliveries being offered by both Walmart and Amazon,
the retail landscape is undergoing a paradigm shift in the way people shop. The lines are getting
blurred between shopping in brick-and-mortar stores and online. While Walmart is taking steps to
ramp up its presence in the digital space – its e-commerce sales increased by 40% in 2018 [3], to
compete with a company like Amazon, it has to invest heavily in technology like automation, which
have already started paying great dividends. Walmart is competing with Amazon not only by ramping
up its resources and competencies, but also through acquisitions, most notable being Vudu, Flipkart,
Jet.com and Moosejaw.

Walmart should focus on creating an ecosystem of products, like how Amazon has ventured into home
automation through its Alexa and Echo devices.

Other Strategies
 Reduce costs that are high when compared to targets
 Becoming an environmentally sustainable company

For a company that prides itself on its low pricing strategy and economies of scale working in its favour,
as per data given in Exhibits 1 and 2, Walmart’s cost of sales as a percentage of revenue is on the
higher sider as compared to Target, which is much smaller in scale when compared to Walmart (Ref.
Annexure 1). Walmart should identify where value leakage happens and ensure its costs are minimised
as much as possible.

With each passing day, sustainability is garnering greater attention from the public. Companies and
governments are being increasingly scrutinised on preserving the environment so much so that
sustainability can change the competitive landscape. Investors and stakeholders are keen to ensure
that companies conduct business in an environmentally sustainable way. Walmart, sensing the
importance of this, has taken various steps to reduce its carbon footprint by making its supply chain
more responsible. It even has a dedicated initiative called “Project Gigaton”. While these initiatives
have not only made the products safer, healthy and more affordable, they have also enabled Walmart
to have a positive brand perception among the society.

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Strategies to be discontinued
Poor Employee and Labour relations
Walmart is not only the world’s largest retailer; it is also the largest private employer in the world [10].
With such a large workforce in its system, the company should be employee friendly to get the best
out of its personnel. But Walmart has long been accused of its sub-standard HR policies. Walmart has
received widespread criticism for paying very low wages to its workers. It was also known to be anti-
union. This created a problem in international markets like China where labour unions are very strong.
It has also been faced with class action lawsuits because of working condition of its employees,
wherein they were forced to work for extended hours in poor working conditions. It also has a long
history of gender discrimination [11], with lawsuits being filed for that as well.

With human beings being the most valuable resource for any company, it is important that they
operate at a comfortable space at work so that they create maximum value. Such poor HR practises
followed by Walmart will adversely impact the morale of its associates and affect their productivity.
For a company that is constantly in the public eye, it also tarnishes the image of the company among
the customers, which might turn them away from the company. It also creates an opinion that the
company is having poor ethics.

So, Walmart should do away with its below par labour relations and ensure that it takes steps to make
it more employee-friendly.

Discontinuing segments of products that have negative appeal

While Walmart is known for its wide assortment of products, certain segments of products have a
negative perception among the public, most notably being guns and ammunition. There is an
increasing gun culture and repeated instances of public shootings in USA. Sale of firearms not only
causes inconvenience to other customers but also develops a negative perception about the company.
With each state having its own gun laws, Walmart should ensure that categories like firearms and
ammunition are taken off its shelves, even in states where the laws allow it. Such an initiative would
create positive PR for the company particularly when one of the shootings happened at a Walmart
store.

Non-compatibility with core competency

Walmart creates value to its customers through it cost leadership strategy. People perceive the
company as one that provides maximum value at low costs. Also, the target market for Walmart in
USA were the households that earned less than $70,000 a year. So, when Walmart offered “Rollbacks”,
people questioned the very thing that had built the company. A company for which its every-day low
pricing strategy has been pivotal for its success, offerings like promotional discounts creates a
contradiction about the value proposition of Walmart in the minds of the customers. Walmart cannot
afford to dilute its core strategy. Hence, Walmart must do away with offering promotional discounts.
It must not adopt any practice that looks to threaten its EDLP strategy, at least in USA.

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PROBLEM STATEMENT #2

Should Walmart continue with its existing business model or should it pursue a different
business model to continue its growth trajectory both in domestic and international markets.
Where should they emphasize?

Introduction
For any business to thrive, it is as important to understand the pulse of the stakeholders as is to sense
the demands of the target customer base. A business in its pursuit to accelerate the growth and push
the graph northwards in its performance chart, opts for a right mix of organic and/or inorganic growth
keeping in mind its geographical and time targets among other factors.

Walmart Business Model

In order to understand the business model of Walmart, it is necessary to break the business into
various components so that each can be analysed. This enables to understand the connections and
interactions between various components.

Value proposition – With value proposition being the pivot of a business model, around which other
components evolve, Walmart’s key way of creating value to its customers is through its EDLC/EDLP
strategy and the assortment of choices it provides. Through its dense retail network, Walmart provides
easy accessibility and a convenient shopping experience to its customers.

Key customer segments – Its key customers segments are value conscious buyers. Walmart’s value
proposition perfectly aligns with the customer segment it is targeting.

Channels – Walmart reaches out to its customers through the following channels – its brick and mortar
stores and through its e-commerce/m-commerce platforms. They have been greatly integrated in
recent times to provide an omnichannel shopping experience for its customers. This has also enabled
it to reduce the costs, which again reinforces the value proposition.

Key partners – Suppliers and manufacturers are its key partners and Walmart, through its
relationships with them, is able to achieve cost advantage. In addition, its other partners include
logistics partners who are responsible for managing the supply chain.

Key resources – These include its 11300 retail stores all around the world [8], which enables it to reach
out to its vast and diverse customer base. Other resources include its associates and technology.

Key activities - Procurement, Inventory management, forecasting are the key activities that the
company performs which enables it to operate smoothly. Its other key activities include recruitment,
training of associates and sales and marketing.

Cost structure – To manage the aforementioned components, the key costs involved are salaries &
wages to its workforce, inventory and logistics costs and marketing.

Revenue stream – Walmart’s sources of revenue are generated from the sale of its products and
services.

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PESTEL analysis
PESTEL analysis helps in analysing the macro factors that affect Walmart’s. It involves the appraisal of
the business environment and helps devise out strategies to exploit opportunities.

Political factors – Variation in political landscapes of market has been considered by Walmart while
formulating go-to market strategies. For instance, its entry into the Indian markets was through a
joint venture with Bharti enterprises owing to the FDI restrictions in retail industry.

Economic factors – Factors like inflation rates, GDP growth rates, per-capita income etc. affect the
investment decisions of the organisations. Walmart’s investments in Emerging Markets (EMs) are
due to the conducive economic factors present.

Social factors – Shared perceptions and attitudes help the organisation understand the tastes and
preferences and cater to the needs accordingly. For instance, Walmart with its core competency
as lowest price set its foot in Japan - a country that deems low cost akin to low quality thus
detrimentally affecting the brand value.

Technological factors – In a market like USA where people are technologically advances Walmart
must identify the technology trends and use them as an enabler.

Environmental factors –Environmental, Social and Corporate governance (ESG) are the main
metrics in measuring the sustainability and the ethical impact of a business. Understanding and
communicating the impact of a business investment on the environment is vital to the performance
of the organisation.

Legal factors- Understanding the law of the land is important for sound and hassle-free business.
Walmart allowing its employees to form labour unions in China helped to be in compliance with
the local laws, though the same was never the normal practise.

Investments in EM
For an industry moving towards the mature phase in growth terms, it is imperative to move out of the
local markets and test the waters abroad. While expanding in new markets opens up the way for
growth, investing in emerging markets (EMs) compounds the rate of such growth. The number of
relatively untapped markets in such countries gives way for expansion in the sales volumes while the
unmet demands in such markets complements the retailers in establishing the brand names and
gaining the first mover advantage. The GDP growth rate of the developing countries is constantly on
the higher side as against that of developed nations.

Walmart should continue its model of targeting the customers in EMs to exploit the growth potential
in such countries and take advantage of the space that they offer to expand.

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 Figure 1 - GDP Growth Rates (Source-IMF)

Inorganic growth
Marking presence in the international markets through inorganic growth is a welcome strategy in
terms of establishing footprints in the local markets quite initially. Acquisition of an established brand
helps gain a quicker sense of the local dynamics and results in an immediate expansion of market
presence. While customer shifts in such markets are possible with price differentiation, acquisition as
an expansion strategy in Mexico, Japan etc. has helped Walmart in quickly gaining familiarity and
becoming a home-name in the consumer circles.

Walmart’s strategy of operating in the international markets through acquisition of local names has
contributed to the strength of its financials by showing a steady growth in sales and improving bottom
line. This reaffirms the identification of sound companies with aligned business models by Walmart.

One of the keys to inorganic growth will be to align its business model with the company that has been
acquired.

Understanding the stakeholders

People are diverse and more so when they are spread across various geographical areas. In this
context, gaining knowledge of the traits of the customers, expectations of the employees and the local
regulations become imperative to sustain in the local markets. Though inorganic growth helps gain a
quicker idea of the same through the existing channels, parent companies tend to turn around the
strategies to suit their objectives and culture. While this might be required to increase efficiencies, the
companies should also leverage the benefits of local market knowledge.

Walmart's foray into the German markets, for instance turned out to be disaster owing to non-
identification of the sensitivities of the employee and customers. Its core value proposition i.e., EDLP
has been under-cut by competitors. This makes it a classic case of failure to understand the
expectations of the personnel and the target customer base – the 2 significant factors that make or
break a company. This makes change management vital in realising the synergies of an acquisition.
Hence, Walmart should have pursued a different business model in Germany.

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However, Walmart’s strategy in understanding the needs of Chinese workforce better and giving in
to the ideas contrary to the usual capitalistic beliefs was a welcome move in embracing the needs and
gelling well with the local workforce. A resistance to this would have costed Walmart heavily in growth
and value terms.

In the words of Richard Branson, take care of your employees and the employees will take care of
your business.

Customer targets
While deciding on the target markets, identifying the compatibility of the customers with the core
competency of the organisation is primary in evaluating the geographical segment. Failure in
evaluating the same may lead to a small slump in the sales growth rate initially and subsequent losing
of customers to players who have aligned their competencies to the market preferences.

Venturing into the British markets without an understanding of the needs of the customers and a
forecast of the possible shifts in the trends saw Walmart losing volumes to the established local
players like Tesco. Understanding direction of preferences in the British markets could have better
helped Walmart predict the demand graph and accordingly ace the radical shifts in the tastes of the
customers to affluent products and shopping experiences. Walmart should have sensed this and used
a different business model that appears lucrative to the more up-scale customers.

The way a company’s core competency is perceived also plays a major role in the reception of the
brand. In a country like Japan that equates low cost with low quality, the USP of Walmart had to be
reworked which Walmart failed to do. The business model of Walmart should be modified to cater to
the needs of the customers that values propositions different from consumer surplus. Rebranding
efforts contribute in propagating the competencies that are different from the core competencies of
the organisation on other markets.

Store layout and visual merchandising

A strategic floor plan induces customers to spend more time and money in the shop space. The
physical array of products encourages customers to have a look at the sections that otherwise they
wouldn’t have paid attention to.

The dipping sales change figures in the US markets as per Exhibit 4 in the given text of the case is
proof enough for Walmart not being able to sustain its growth. Considering the given numbers in the
Exhibit 4 to be nominal figures, the sales growth rate in 2011 at 0.1% is lower than the average U.S.
inflation rate in 2011 at 3.16% [12] .This suggests that the entire growth in sales could have been due
to the increase in prices and not due to an increase in the volumes.

Placement of product lines like affordable clothing and cheap electronics near the fast moving
groceries lure customers into buying those products who would have otherwise ignored that section
completely. Such targeting when done with the right products and arrangements without getting into
the way of the convenience of shopping for regular customers, helps power up the same-store sales.
Offering addictive shopping experiences is a major competency for stores located in the up-scale
markets. Walmart’s stable growth in its revenue per square foot as against that of Target emphasises

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the propriety of its business model with respect to store-size, layout and array of products and
consequentially the perfect alignment of its resources.

Leveraging technology
Retail space is increasingly becoming dominated by the strength of technology adoption and leverage.
The players in the retail arena leveraging technology to not only assist customers place orders online
but also for activities ranging from understanding consumer tastes better, providing innovative digital
interactions to soliciting customer feedback. Advanced levels of retail automation is used to develop
hybrid retail store models combining physical space and technological advancement. Shopping
experiences have graduated from mere online orders and same day deliveries to creative-convenient
ways of placing orders and payment facilities.

Walmart's competitors are coming up with disruptive ways of picking orders/enabling reordering of
groceries through voice interactions innovations in the traditional brick and mortar space offer the
convenience of picking the products and walking out of the store. This zero interference by humans
offers the customers a seamless shopping experience.

Walmart needs to attune its business model to leverage more on the technological advancements
and effectively construct customer database to aid it in analysing the customer buying behaviours,
trends and preferences through data mining.

Sustainability
It is crucial for a retail behemoth like Walmart with its fleet of delivery services and scale of operations
to be environment ambassador since it contributes to the sustenance of the business. Every business
attempts to reduce its carbon footprint in its effort to give back more than what it takes. Pollution
and carbon emission targets are also set by certain governments to enable sustainable business
practises.

Walmart should ensure that its business model operates in an environmentally sustainable way.
Appropriate measures should be taken to make tweaks wherever possible so that the business
model is aligned with sustainability. It should also educate its key partners about sustainability. For
e.g., Walmart has converted trucks to run on bio-fuel that re-uses cooking grease from Walmart
stores.

Commitment to reduce the carbon emissions creates a positive social impact in the society in
addition to making socially responsible investments.

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ANNEXURES
Annexure 1

Walmart
2006 2007 2008 2009 2010 2011
Net Sales 308,945 344,759 373,821 401,087 405,132 418,952
COGS 237,649 263,979 284,137 304,056 304,657 315,287
COGS/Net Sales 77% 77% 76% 76% 75% 75%

Target
2007 2008 2009 2010 2011
Net Sales 57,878 61,471 62,884 63,435 65,786
COGS 40,898 43,521 44,766 44,694 46,451
COGS/Net Sales 71% 71% 71% 70% 71%

REFERENCES
[1]
- https://en.wikipedia.org/wiki/Walmart
[2]
- https://www.forbes.com/powerful-brands/list/#tab:rank
[3]
- https://s2.q4cdn.com/056532643/files/doc_financials/2019/annual/Walmart-2019-AR-Final.pdf
[4]
- https://corporate.walmart.com/newsroom/innovation/20170412/when-convenience-and-
technology-meet-pickup-customers-win
[5]
- https://www.fastcompany.com/40488364/walmart-is-testing-out-shelf-scanning-robots-in-50-
stores
[6]
- https://www.grandviewresearch.com/industry-analysis/video-streaming-market
[7]
- https://variety.com/2018/digital/news/walmart-vudu-mgm-shows-free-ad-supported-
streaming-1202970491/
[8]
– Walmart – Annual Report (2019)
[9]
- http://statisticstimes.com/economy/gdp-of-india.php
[10]
- https://www.statista.com/statistics/264671/top-20-companies-based-on-number-of-
employees/
[11]
- https://www.vox.com/the-goods/2019/2/15/18223752/walmart-gender-discrimination-class-
action-lawsuit-2019
[12]
https://www.inflation.eu/inflation-rates/united-states/historic-inflation/cpi-inflation-united-
states-2011.aspx

15 | P a g e