Walmart's low price everyday strategy and mission alignment with customer value creation

¶ … WalMart Corporation

Mission and Vision Statement Analysis

Linking Wal-Mart's Mission and Vision to Their Strategic Goals and Objectives

Assessing the Link Between Wal-Mart's Financial Performance And Its Strategic Goals

Wal-Mart Competitive and Marketing Analysis

Wal-Mart Marketing Analysis

Potential Wal-Mart Merger & Acquisition Strategy

Incentive and Reward Strategies for Wal-Mart Employees

Evaluating How Current Strategies Define Ethicacy Levels at Wal-Mart

Wal-Mart Ratio Analysis

Income Statement Analysis, 2007 -- 2012

Analysis of WalMart Corporation

Mission and Vision Statement Analysis

All internal systems, processes, external stakeholder management initiatives, supply chain management, sourcing, quality management and merchandising initiatives in WalMart revolve around the fulfillment of the expectations they create with their customers daily. Their Low Price Everyday (LPED) value proposition permeates their entire value chain, galvanizing it around the mission of delivering exceptional value on a consistent basis to customers. The mission and vision of WalMart rely on LPED as the catalyst and unifying force across their large, diverse corporate culture. WalMart is known for also being the most advanced and skilled high volume retailer in the use of analytics, Business Intelligence (BI), Business Process Management (BPM) and Business Process Re-engineering (BPR). WalMart measures the impact of continual process and system performance on the fulfillment of their LPED pledge to customers, often relying in customer satisfaction and psychographic metrics to ensure they continually meet and exceed customer expectations (Wal-Mart Investor Relations, 2012). The mission statement of WalMart is "to help people save money so they can live better" and this serves as a galvanizing force in unifying analytics, BI, reporting and continued analysis of improvements for the company (Mcginn, 2009) (Wal-Mart Investor Relations, 2012). The vision of WalMart is centered on extending the purchasing power of the middle-income and lower middle-income consumers in their core markets (Wal-Mart Investor Relations, 2012). The reliance on analytics, BI, BPM and BPR and many other forms of metrics and key performance indicators (KPIs) are all aligned to this vision of giving those customers who rely on WalMart to help them make ends meet more and more value over time. WalMart has insight into how their pricing directly affects the quality of those individuals and families that rely on them the most. Their most loyal segment, the Price Value Shopper, at 16% of their customer base, visits the store will over 20 times a month, has a per capita income of $47,000 and generates more profitability than any other customer segment Walmart tracks (Frazier, 2006). WalMart also knows from their psychographic and demographic research that the majority of the price Value Shopper segment are women who are often have the role of spouse, mother, and part-time or even full-time employee as well (Wal-Mart Investor Relations, 2012). Time and money are the two commodities this customer base has the least of and WalMart orchestrates their vision and mission statement accordingly. Analyzing a decade of filings Walmart has made in the Securities and Exchange Commission (SEC) is the basis of the market segmentation analysis shown in Figure 1 (Wal-Mart Investor Relations, 2012). The role of the Price Value Shopper is evident from the analysis; they are by far the most loyal and profitable customer base the company has, and their vision and mission are orchestrated to deliver value to them on a consistent basis.

Figure 1: Wal-Mart Psychographics Segmentation

Based on an analysis of:

(Wal-Mart Investor Relations, 2012)

(Frazier, 2006)

Linking Wal-Mart's Mission and Vision to Their Strategic Goals and Objectives

WalMart has a very clear and well-defined series of governance frameworks and programs in place to ensure their mission and vision is directly reflected in their strategic goals and objectives. While WalMart is best known for its discount retailing and its LPED value proposition, the company is considered one of the world leaders on a consistent basis in the use of real-time analytics, supply chain management, logistics, service lifecycle management and pricing optimization (Christopherson, 2007). WalMart only uses analytics and BI that directly relate to the fulfillment of their mission and vision, and this includes ensuring their value chain stays consistently grounded in their core business model of high volume, low price retailing (Wal-Mart Investor Relations, 2012). WalMart relies on analytics, BI and advanced price and logistics optimization technologies to keep their value chain synchronized and focused on their mission and vision (De Santa, 1998) (Powanga, Powanga, 2008). Based on an analysis of the company's filing with the SEC< the following representation of their value chain is shown in Figure 2 (Wal-Mart Investor Relations, 2012).

Figure 2: Wal-Mart Value Chain Analysis

Sources: (Christopherson, 2007) (Gosman, Kohlbeck, 2009) (Powanga, Powanga, 2008) (Wal-Mart, 2011)

Wal-Mart Competitive and Marketing Analysis

With 72.3% of North American market share in the big-box retailing segment, WalMart's effects on the industry are often significant and can change the landscape from a product management, pricing, supply chain and logistics standpoint., The dominance of WalMart from a supply chain standpoint is shown in Figure 3, WalMart Competitive Analysis of Market Shares, FY 2011. WalMart's other major competitors include Cost, Target and BJs Wholesale Club.

Figure 3: Wal-Mart Competitive Analysis of Market Shares, FY 2011

Source: ((Wal-Mart Investor Relations, 2012 )

Globally WalMart most often competes with Carrefour Tesco and other regional retailers throughout Europe and Asia including Lee & Fung from Hong Kong (Wal-Mart Investor Relations, 2012). Of these global competitors, Tesco is the most challenging as they have the ability to launch smaller, more market-focused stores within 120 days or les (Wal-Mart Investor Relations, 2012). WalMart is also very effective in locating store locations and quickly launching them, as will be seen in the marketing analysis area of this paper. The core competencies in logistics, supply chain management, analytics and BI all make WalMart highly effective in launching new stores and gaining competitive advantage on a local level.

Wal-Mart Marketing Analysis

According to the latest market forecasts and assessment completed by research firms that track big-box retailing including A.C. Nielsen and others listed in the WalMart Annual Report the total market size for discount retailers was in 2011 approximately $395B, rising to $407B four years later, by 2015 (Wal-Mart Investor Relations, 2012). WalMart cautions investors in their 10Q filed with the Securities and Exchange Commission that the industry is facing a 4% compound annual growth rate with continued consolidation throughout all sectors of the big box industry (Wal-Mart Investor Relations, 2012). Based on an analysis of these factors the industry is considered mature, with potentially in a decline or shakeout position. Based on an analysis of these factors, Figure 4 has been developed and is shown to the right.

Figure 4: Economic Analysis of the Warehouse Clubs and Supercenter Industry Sources: (Wal-Mart, 2012) (Sodhi, Son, 2009) (Gosman, Kohlbeck, 2009)

Selecting the Best Possible Strategy for Maximizing Return to Shareholders

For WalMart to deliver the greatest potential value to shareholders, they need to pursue a mid-tier market strategy that differentiates store product