This paper presents a comprehensive strategic analysis of Walmart, one of the world's largest multinational retail corporations. Using two primary analytical frameworks — SWOT analysis and the balanced scorecard — the paper examines Walmart's internal strengths and weaknesses alongside its external opportunities and threats. Critical success factors are identified across four balanced scorecard perspectives: financial, customer, internal business processes, and learning and growth. The paper then evaluates Walmart's actual organizational initiatives against these factors, drawing on the company's Form 10-K filings and corporate disclosures to assess how effectively the retailer is executing its strategic objectives in areas such as e-commerce expansion, customer satisfaction, employee retention, and revenue growth.
The organization selected for this analysis is Walmart. Walmart is one of the largest multinational retail corporations in the world. The company has grown from humble beginnings to become an immensely profitable enterprise with operations across multiple locations worldwide. Although the retailer has largely operated in brick-and-mortar locations since its establishment in 1962 by entrepreneur Sam Walton, it has partially embraced an online retail model in recent times in order to cope with competition from online retailers such as Amazon. As Walmart states on its website, the company is committed to creating "a seamless experience to let customers shop anytime and anywhere online, through mobile devices and in stores" (Walmart, 2021). At present, the company is headquartered in Bentonville, Arkansas. The current chairman and CEO are Greg Penner and Doug McMillon, respectively.
SWOT analysis is one of the most important tools for assessing an enterprise's competitive position. It is particularly valuable because it evaluates not only the organization's internal environment — that is, its strengths and weaknesses — but also its external position in terms of threats and opportunities. It is for this reason that Wilkinson and Kannan (2013) are categorical that "SWOT analysis stands at the core of strategic management" (p. 186). The table below presents the strengths, weaknesses, opportunities, and threats relevant to Walmart, highlighting both the company's current position and its present situation.
Strengths: (1) Market leadership position; (2) Global supply chain.
Opportunities: (1) Emerging markets; (2) Strategic alliances.
Weaknesses: (1) High employee turnover; (2) Thin profit margin.
Threats: (1) Aggressive competition; (2) A less loyal and more disconnected retail customer base.
The relevance of a balanced scorecard cannot be overstated in the context of strategic implementation and management. It encompasses four crucial perspectives: learning and growth, internal process, customer, and financial. The balanced scorecard below is instrumental in establishing Walmart's critical success factors.
Financial Perspective
Objective: Maintain market leadership position; increase fiscal revenues.
Measures: Share of market; annual sales.
Targets: 15% of the U.S. market and 10% globally; consistent revenue growth over the next five years.
Initiatives: Increased utilization of e-commerce; explore new markets.
Customer Perspective
Objective: Increased customer satisfaction.
Measures: Customer feedback.
Targets: Reduce negative feedback by 50%.
Initiatives: Improved quality of service.
Internal Business Processes Perspective
Objective: Reduce customer waiting time.
Measures: Average customer waiting time.
Targets: Slash customer waiting time by more than 15%.
Initiatives: Adapt store layout to increase the number of checkout counters.
Learning and Growth Perspective
Objective: Reduce the high employee turnover rate.
Measures: Employee turnover rate.
Targets: Less than 20%.
Initiatives: Formulate strategies to promote employee motivation.
A number of critical success factors have been identified for Walmart. These factors represent courses of action deemed instrumental to the achievement of the retailer's strategic objectives. In selecting these factors, several considerations were made: first, each factor was determined to be instrumental to Walmart's success; second, each factor needed to be beneficial to the company in both the short and long term; and third, deliberate efforts were made to ensure that the factors aligned with the identified objectives. As Kaplan and Norton (1996) explain, "critical success factors are best stated as action phrases and may include the means and/or desired results, as well as the action" (p. 79).
In the financial perspective, one key objective is the maintenance of market leadership position. Walmart is currently the world's largest retailer in terms of market share and revenues. In fiscal year 2020, the company recorded $559 billion in total sales (Walmart, 2020). Key competitors in the U.S. market include Amazon, Costco, Walgreens, Kroger, Target, and Home Depot. In 2019, Walmart's two closest competitors — Amazon and Costco — recorded revenues of $280 billion and $149 billion, respectively. To maintain its dominant market share, the company must assess factors that have driven competitors' growth over the past decade. One such factor is the deployment of robust e-commerce strategies. Amazon's success, for instance, is largely attributable to the e-commerce model it embraced from the outset. Most customers appreciate the convenience that e-commerce provides. Accordingly, Walmart ought to invest even further in its e-commerce platform and adapt its global supply chain and delivery channels to match.
A second objective within the financial perspective is revenue growth. Sustained revenue growth is essential if the company is to continue meeting the expectations of its shareholders — one of its most crucial stakeholder groups. Revenue growth is also vital for improving services and remaining competitive in an increasingly crowded market. To sustain revenue growth, Walmart should explore new markets, particularly unexplored offshore markets. Countries such as South Korea, Saudi Arabia, and Russia represent potentially lucrative expansion targets. Walmart could also deepen its presence in China, where it has operated for nearly two decades. These countries qualify as emerging economies — nations in a transitional phase from developing to developed status (Bryan, 2014) — and offer the greatest opportunities for sustained revenue growth.
Moving to the customer perspective, increased customer satisfaction is the primary objective. The critical success factor here is improved quality of service. In basic terms, customer service involves ensuring that customers gain access "to what they want, when they want it, in the best possible way" (Foxall, 2014, p. 213). By improving customer service, Walmart will simultaneously promote customer loyalty. Within the internal business processes perspective, the objective is to reduce customer waiting time — an issue that applies primarily to the retailer's brick-and-mortar locations in the U.S. and internationally. Customer waiting time is a critical dimension of the overall shopping experience. Adapting store layouts to increase the number of checkout counters would be instrumental in reducing wait times, thereby improving both customer experience and operational efficiency.
Finally, within the learning and growth perspective, there is a pressing need to address the company's high employee turnover rate. A high turnover rate carries numerous downsides, not least of which is a decline in service quality, since frequent staff changes significantly disrupt an organization's operations. High turnover also imposes direct financial costs in the form of hiring and training expenses. To address this, Walmart must formulate strategies to promote employee motivation. Potential strategies include introducing creative incentive programs, implementing scheduling flexibility, and providing expanded career development opportunities through training.
"Evaluation of Walmart's actual initiatives against identified factors"
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