Walmart Strategy Analysis

Introduction – Company Overview

Wal-Mart is the largest global retailer in U.S. and also one of the biggest multinational companies of any kind in the world. It is a well-known American company offers its products through various retail formats that include: supercenters, supermarkets, hypermarkets, warehouse clubs, cash & carry, home improvement, specialty electronics, restaurants, apparel stores, drug stores, and convenience stores, as well as digital retail. The company relies heavily on their Every Day Low Price (EDLP) strategy which seeks to provide consumers with the lowest prices on many common goods. Wal-Mart operates primarily in three segments: Wal-Mart U.S, Wal-Mart International, and Sam’s Club. Sam’s Club operates as a

membership-based

Walmart Stores 2003, Harvard Business Review, Bing search.

1. Walmart had a solid year in fiscal 2015 as each operating segment improved its performance as the year progressed. While net sales grew nearly 2 percent and operating income increased 1 percent, their underlying performance was actually stronger. In fiscal 2015, Walmart U.S. delivered a 3.1 percent increase in net sales to $288 billion. Comp sales growth of 0.6 percent included more than 6 percent growth in our Neighborhood Market format. Operating income declined 2.1 percent to $21.3 billion, due primarily to increased health-care costs. Their improved sales and operating income trends each consecutive quarter in fiscal 2015. The new leadership team, led by Greg Foran, is focused on improving the customer experience through assortment, price and access(Source:http://stock.walmart.com/files/doc_financials/2015/annual/2015-annual-report.pdf).

2. The company sells electronic items, baby & kids clothing, video games, toys, fitness and sports instruments, jewelry, groceries and so many other things. The annual revenue of the Wal-Mart

Source: Revenues and Profits, Walmart Journal,2015.

Corporate Strategy

The company’s strategy centers on ‘The Every Day Low Price philosophy’. Wal-Mart seeks to provide value for its customers by providing every day staple goods (grocery, pharmacy, etc) as well as more discretionary purchases (entertainment) at the lowest possible prices. Wal-Mart is able to provide goods at steep discounts through aggressive cost cutting efforts and improvements in operating efficiency and supply chain management. An area of focus for the company recently has been eCommerce, and management believes it can continue domestic growth through this channel. As of the most recent earnings release, the company believes it has grown eCommerce share in all key markets. This will continue to be an area of focus going forward. International focus will be on expansion and improvement in operating efficiency. Margins of the International segment have lagged the remaining segments, and management has made it a goal to improve net and operating margins through aggressive cost cutting and increases in operating efficiency.

Walmart’s legendry EDLC (everyday low cost) and EDLP (everyday low prices) strategy helped it