Walmart Stores, Inc. - Improving Decision Making

Improving Decision Making

Walmart Stores, Inc. Analysis

Unit 5 IP

Cynthia Pruitt

AIU Online

Walmart Stores, Inc.

        Walmart is a multinational retailer that operates as a chain of grocery stores and discount department store. The retailer was opened by Sam Walton in 1962 and has become one of the largest retailers in the United States. Walmart offers a variety of merchandise such as houseware, cookware, groceries, electronics, clothes, and shoes.  The retailer also offers home improvement, Tire & Lube as well as runs a pharmacy department.

Brand Analysis

        Walmart continues to expand its brand and grow into new markets. The retail industry has taken many hits over the years as the economy has gone through many ups and downs, but Walmart continues to profit in sales. Whereas some of its previous competitors such as Kmart have closed many their brick and mortar stores and continue to decline in sales.

        Walmart’s U.S. brand is the largest for the brand it focuses on three segments: Walmart U.S., Walmart International, and Sam’s Club. The U.S. brand is the highest gross profit as a percentage out of the three formats. In addition, it has also contributed the greatest amount to the company’s net sales and operating income. Walmart International operates outside of the United States and included wholesale and retail business. These business consist of supercenters, supermarkets, hypermarkets, etc. The overall profit for Walmart International is lower than its U.S. counterpart.

        The company’s third segment is Sam’s Club which is a membership only warehouse. This segment has the lowest gross profits due to membership income being a significant component of operating income.

Industry and Competition

        The retail industry is a highly competitive industry and it is no different for Walmart. The Walmart face many competitors from dollar stores, supermarkets, discount stores, and super stores. Their main competitors are Target, Costco, and Amazon.com.

Stakeholder

        Walmart is like any publicly traded company, they internal and external stakeholder. Their internal stakeholders are the employees, board member, and owners/shareholders. External stakeholder are partners and suppliers, lenders and customers. The company’s stakeholder influence the strategic direction of Walmart.

        The main focus for investors are profits. They want Walmart to generate more profits, which means higher profits or earning per share. Investors also focus on minimizing or limiting operational expense of the organization. Lower cost more often than not prompt higher profits, which are valuable to Walmart investors.

Consumer stakeholders are top priority for Walmart as they influence the direction the company will go in. Walmart's consumers are keen on low costs and the affordability of merchandise, as long as these products have adequate quality. This is particularly valid among American shoppers, who have a tendency to incline toward retailers that offer low costs, like Walmart. Walmart tends to the interests of consumers as stakeholders. The organization continues to dominate with its strategy of being the low cost leader. Therefore, causing Walmart to appease the consumer stakeholders

Walmart’s employees play an important role in the organizations managerial decision making. The employee’s interest are higher wages and stability. The company has a history of paying their workers low wages, this can effect employee moral which can be a direct outcome dissatisfaction in customer service. Walmart is partially tackling the issues or concerns of its employees have as stakeholders. The organization has arrangements and projects that give an impressive level of employer stability. Be that as it may, Walmart keeps up its position of limiting wages. Therefore, the company does not adequately address the significance of compensation.