Posts Tagged ‘Retail’
Walmart 7Ps of marketing comprises elements of the marketing mix that consists of product, place, price, promotion, process, people and physical evidence. Product. Walmart sells a wide range of products belonging to the following categories: groceries entertainment health and wellness – including pharmacy hardlines – including stationery, auto spares, and accessories hardware apparel home furnishings household appliances Despite the low prices, Walmart attempts to position its products as quality and this message is integrated into company’s marketing strategy. For example, in China Walmart utilizes “Worry Free Fresh” program to provide a money-back guarantee if its produce and meats don’t meetcustomer expectations. Wallmart.com offers about 8 million items in the US[1] and it is duly considered to be one of the largest online stores in the world. Place. With more than 11,000 stores, websites and mobile apps, customers can access Walmart via multiple channels.[2]During the fiscal year of 2016, Walmart is planned to expand by approximately 15 to 16 million total net retail square feet, representing between 240 and 270 units[3]. Walmart stores are operated in the following four formats: Walmart discount stores Walmart express stores Walmart super centers Walmart neighborhood markets Walmart has launched its dedicated e-commerce websites in 11 countries and the proportion of online sales compared to the traditional offline sales has been consistently increasing for the past 10 years. Price. Walmart has based its competitive advantage on cost leadership. Accordingly, the retailer aims to offer the lowest price possible according to its motto ‘everyday low prices’. Walmart Price Match Policy formulated on its website states the following: “We’re committed to providing low prices every day, on everything. So if you find a lower price from an online retailer on an identical, in-stock product, or the item purchased from Walmart.com is now listed at a lower price, tell us and…
PESTEL is a strategic analytical tool and the acronym stands for political, economic, social, technological, environmental and legal factors. Walmart PESTEL analysis involves the analysis of potential impact of these factors on the bottom line and long-term growth prospects. Political Factors Because of its massive size and significance for the US economy, Walmart has been observed to interfere with politics a number of times. The primary reasons for Walmart’s political interferences via lobbying and other means have been an attempt to gain positive political impact on the business. In 2013 Walmart has been caught convincing employees to make political contributions to republicans to support pro-business conservatives like Cruz and Boehner[1]. Walmart has been ranked among the top 100 political donors overall for the period since 1989[2]. As it is illustrated in Figure 5 below, Walmart political spending has vastly increased during the past one and half decade and these funds have been used to influence corporate tax and labour legislations to a certain extent.[3] Changes in Walmart’s political spending[4] Apart from campaign contributions and lobbying activities, Walmart has attempted to interfere directly in certain political debates a number of times. In one notable case, Walmart voiced its opposition to religious freedom law in its home state of Arkansas in 2015. Arguing that religious freedom laws would open the door to discrimination against gay and lesbian customers, Walmart emerged victorious and Republican Gov. Asa Hutchinson refused to sign the legislation.[5] Additionally, Walmart is impacted by a wide range of political factors such as political stability in places where the company operates, market lobbying protectionism policies in international markets, the freedom of press, extent of corruption and others. Economic Factors Walmart revenues and profits are impacted by a range of external economic factors either, directly or indirectly. For example, currency exchange rate…
SWOT is an acronym for strengths, weaknesses, opportunities and threats related to organizations. The following table illustrates Walmart SWOT analysis: Strengths 1. Efficient utilization of online sales channels 2. Huge financial resources 3. Leadership position in the US 4. Sophisticated supply chain operations 5. High brand value Weaknesses 1. Low profit margin 2. Brand image damaged by a series of scandals 3. Lack of flexibility due to its large size 4. Business model easy to replicate Opportunities 1. Further international market expansion 2. Formation of strategic alliances 3. Vitalizing CSR programs and initiatives 4. Exploring diversification opportunities Threats 1. Failure to sustain cost advantage 2. Eruption of quality-related or ethics-related scandals 3. Negative impact to revenues from currency fluctuations 4. Risk of a new global economic crisis Walmart SWOT Analysis Strengths 1. Walmart has an impressive online presence. There are 11 countries with a dedicated Walmart e-commerce websites and the total e-commerce sales increased by 22 per cent in 2015, and about 75 percent of walmart.com sales come from non-store inventory[1]. Moreover, in Brazil, Walmart’s online assortment, including from marketplace partners grew 10 times and in China, Yihaodian saw traffic increase more than 60 percent in 2015[2]. Such a solid presence in online platform and an efficient utilization of online sale channel is a significant strengths that immensely contributes to Walmart’s core competitive advantage of cost leadership. 2. Walmart’s consolidated revenues during the fiscal year of 2015 equaled to USD 486 billion and free cash flow of more than USD 16 billion was generated during the same period[3]. This amount is more than the revenues of the following four companies combined—Costco, Kroger, Tesco in the United Kingdom, and Carrefour SA in France. Walmart’ AA credit rating, which is rare in retail further contributes to the financial strengths of the company. In other…
Traditionally, Walmart leadership attempts to integrate the values of its founder Sam Walton into the organizational culture in order to improve employee morale with positive implications on the bottom line. In 1988 the roles of Chairman and CEO were separated and today these roles are performed by Gregory B. Penner and Doug McMillion respectively. Doug McMillion has assumed Walmart leadership position in February 2014 and a range of initiatives introduce by the new CEO include enhancing the priority for customer services via employee training and development and increasing wages of floor-level employees and focusing on improving nutritional aspects of foods. Walmart leadership academy, instituted in 2009 aims to accelerate the preparedness of leaders and is modelled after the Royal Military Academy Sandhurst[1] Walmartorganizational structure is highly hierarchical due to the massive size of the company. In other words, the company employs about 2.2 million people globally[2] and therefore, there is no alternative organizational structure for Walmart to ensure effective management of such a large number of employees.The Board of Directors consists 16 members and it includes two members of Walton family, as well as, young, but proven business executives such as Kevin Systrom, CEO and Co-Founder, Instagram and Marissa A. MayerPresident and CEO of Yahoo!, Inc. Walmart organizational structure at the very top executive has a pattern as illustrated in Figure 1 below: One step down the hierarchy form the above, Walmart executive team comprises 29 senior managers for the following roles: Executive Vice President and Treasurer Executive Vice President, Softlines and General Merchandise, Walmart U.S. Executive Vice President, Corporate Affairs Chief Operating Officer, Global eCommerce Executive Vice President and Chief Financial Officer Chief Merchandising Officer, Walmart U.S. Executive Vice President, Global People Division Executive Vice President and Chief Financial Officer, Walmart U.S. Executive Vice President, Chief Administrative Officer Executive…
Walmart business strategy is based on ‘everyday low prices’ philosophy of the company. In other words, Walmart pursues cost leadership business strategy enabled by the economies of scale derived by the company in a significant extent. An efficient utilization of online sales channel contributes to the level of cost-efficiency of retail operations and about 75 percent of walmart.com sales come from non-store inventory[1]. Constant improvements of assortment, price and access are basis of Walmart business strategy. In simple terms, Walmart strives to offer the widest choice of products for the cheapest price, along with giving customers the opportunity of choosing the most convenient channel to facilitate the purchase. Wall Mart competitive advantage relies on cost leadership. Moreover, the strategic level management consistently aim to associate Wall Mart competitive advantage with price, access, assortment and experience. Since his appointment as CEO in February 2014, Doug McMillion introduced important changes in Walmart business strategy in the following three directions:[2] Increasing focus on customer services. In February 2015, the company announced a USD1 billion investment in U.S. hourly associates to provide higher wages, more training and increased opportunities to build a career with Walmart.[3] Improving groceries. Due to increasing level of health-consciousness of consumers, Walmart is attempting to increase its range of organic options and fresh produce. This change is more evident in the US market and it is being actively integrated into marketing communication message of the brand. Enhancing the flexibility of the shopping experience. It has been noted that “Wal-Mart is working to integrate its physical stores with the digital business”[4]. For example, thanks to the latest changes, customers are able to collect their online orders from stores and they can also get text reminders from the pharmacy. Generally, Walmart competitive advantage can be sustained in the global marketplace in long-term…
Walmart Stores Inc. is a US-based global discount supermarket chain that has more than 11,000 stores in 27 countries and serves nearly 260 million customers each week under 72 banners (Annual Report, 2015). Founded in 1962 by Sam Walton, today Walmart employs 2.2 million people globally and it is the world’s largest retailer. Walmart U.S. delivered net sales of USD 288 billion, a more than 3 percent increase in the fiscal year of 2015 and consolidated fiscal revenues equaled to USD 486 billion (Annual Report, 2015). During the fiscal year of 2015 Walmart revenues grew by more than USD9 billion to nearly USD 486 billion and earnings per share were USD 4.99, a nearly 3 percent increase from the previous year . On a constant currency basis, net sales surpassed USD 141 billion, while operating income increased to more than USD6 billion (Annual Report, 2015). ‘Everyday low prices’ is Walmart’s marketing communication message and this message serves as a guiding principle for Walmart business strategy. Specifically, Walmart strives to achieve cost leadership by the use of economies of scale to a great extent, exercising its huge bargaining power in dealing with suppliers and paying low wages to employees. Walmart Report contains the application of the major analytical strategic frameworks in business studies such as SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis and McKinsey 7S Model on Walmart. Moreover, the report contains analyses of Walmart’s business strategy, leadership and organizational structure and its marketing strategy. The report also discusses the issues of corporate social responsibility. 1. Introduction 2. Business Strategy 3. Leadership and Organizational Structure 4. SWOT Analysis 4.1 Strengths 4.2 Weaknesses 4.3 Opportunities 4.4 Threats 5. PESTEL Analysis 5.1 Political Factors 5.2 Economic Factors 5.3 Social Factors 5.4 Technological Factors 5.5 Environmental Factors 5.6 Legal Factors 6. Marketing Strategy…
Coca Cola releases Sustainability Report that comprises the details of CSR programs and initiatives engaged by the company. Coca Cola aims to give back at least 1% of its annual income for charitable causes annually. The figure below illustrates the pattern of distribution of this fund in 2013. According to the latest Coca Cola Sustainability Report for 2013/2014 the major CSR programs and engagements initiated by the company include the following: Categories of CSR activities Coca Cola Performance Educating and empowering workers During the period of 2012-2013 Coca Cola is mentioned in 26 lists, including the World’s 25 Best Multinational Workplaces 2013 compiled by the Great Place to Work® Institute. Labor and human rights Company’s EthicsLine channel provides stakeholders an opportunity to inform perceived violations of Code of Business Conduct, Workplace Rights or any other violations in a secure and anonymous manner. In 2013, 44% of workforce in the US was multicultural and 1010 military veterans were hired during the year. Health and safety 100 out of 400 new beverage products introduced in 2013 are reduced-, low-, or no calorie. 94% of company-owned facilities comply with Coca Cola Workplace Rights Policy The rate of lost-time incident decreased in 2013, dropping to a low of 1.9 Environment a) energy consumption b) water consumption Energy efficiency improved by 20% compared to 2004 100 service vans in the US have been converted into efficient hybrid-electric vehicles Coca Cola has announced a program to reduce carbon footprint by 25% by 2020 Coca Cola has announced its commitment to balance its water usage by 2020. In 2013 the company has replenished an estimated 68% of the volume of its finished beverages and returned about 108.5 billion liters of water to communities and the nature. …
Effective marketing strategy has played a critical role for Coca Cola’s success in the global marketplace. The company has declared its total compliance with the following 4 principles of Responsible Marketing Policy: Choice – providing a great range of product options, so that customers can choose according to balanced diets and active lifestyles. Balance – encouraging the consumption of beverages in sensible manners and moderated amounts. Honesty – adhering to the principles of honesty and transparency in all marketing and sales activities. No marketing to children – marketing of any products should not be aimed at children under the age of 12. In addition to its own marketing initiatives, Coca Cola provides promotional and marketing services to distributors, bottlers and resellers on a discretionary basis. In 2014 marketing expenses of this category amounted to $7 billion respectively[1]. The company has announced ‘One Brand’ marketing campaign that is aimed to unite four different brands – Coca Cola, Diet Coke, Coca Cola Zero and Coca Cola Life under the umbrella of Coca Cola. The level of marketing spending to advertise lower sugar, no sugar and no calorie beverages has been doubled in 2015[2]. Advertising Coca Cola advertising strategy is boldly experiential with innovative design of posters and print and media advertising. The company is announced that media advertising investments will increase by $1 billion by 2016[3]. According to “One Brand” marketing campaign Coca Cola advertising via various channels will feature all four different brands of Coca Cola as illustrated in Figure 2 above. Viral marketing is accepted as an important element of the advertising mix by the company and it is extensively applied to promote specific marketing initiatives such as ‘Sharing a Can, personalization of Cola cans and bottles by printing names, as well as, “Sing For Me” campaign, an initiative that…
Political Factors Coca Cola is impacted by a set of political factors, both, in the US and abroad. These include, but not limited to the level of political stability in the country, impact of international pressure groups and domestic market lobbying groups and the government attitude towards the industry and the company. There are few specific instances that illustrate the impact of political factors on Coca Cola performance. “One Day without Coca Cola” campaign launched by University organizations of the Social Nicaraguan Movement was a protest against the US-led invasion of Iraq with an inevitably negative impact on Coca Cola revenues in respective markets[1]. Similarly, Israeli attacks on Gaza in 2014 have caused some of the businesses in Turkey and more than 100 hotels in Mumbai stop selling products of Coca Cola Company[2]. Economic Factors Coca Cola sales are impacted by a set of economic factors that beyond of company’s control. These factors include the level of economic growth in the country and in the industry, tax rates and currency exchange rates, interest rates, labor costs and others. The global economic and financial crisis of 2007 – 2009 is a relevant example of an economic factor that greatly impacted the majority of businesses around the globe. However, the crisis has impacted Coca Cola to a lesser extent compared to many other businesses. Its operating margin remained at industry-front 22% despite the crisis, although dividend yield was reduced to 2.6%[3]. Arguably, fluctuations in exchange rate is the most significant economic factor that has adversely impacted Coca Cola performance in recent years. For example, due to severe currency devaluation in Venezuela, Coca Cola’s reported profits in this market has to be reduced by 55% in the fourth quarter of 2014 and there are similar instances in other parts of the world[4].…
The topic of consumer behaviour is one of the massively studied topics by the researchers and marketers in the past and still being studied. Researchers show different reasons as to why consumer behaviour has been the topic of many academics and researchers. One of the common views is that understanding consumer behaviour has become a factor that has a direct impact on the overall performance of the businesses (Kotler and Keller, 2012). Another view suggests that understanding consumer behaviour has become crucial especially due to fierce competition in retail industry in the UK and worldwide (Lancaster et al, 2002). This chapter will introduce some other areas of research background of consumer behaviour addressing the works of researchers and marketers. Moreover, consumer decision making process, in particular, five stages of consumer decision making process will be discussed in detail. Introduction It is worth noting that consumer buying behaviour is studied as a part of the marketing and its main objective it to learn the way how the individuals, groups or organizations choose, buy use and dispose the goods and the factors such as their previous experience, taste, price and branding on which the consumers base their purchasing decisions (Kotler and Keller, 2012). One of such studies of consumer buying behaviour has been conducted by Acebron et al (2000). The aim of the study was to analyze the impact of previous experience on buying behaviour of fresh foods, particularly mussels. In their studies the authors used structural equation model in order to identify the relationship between the habits and previous experience on the consumer buying decision. Their findings show that personal habits and previous experience on of the consumers have a direct impact on the consumers’ purchase decision in the example of purchasing fresh mussels. They also found that the image of the…