WALL MART

Wall Mart- Business Analysis

Wall Mart- Business Analysis

Introduction

“Saving people money so they can have a better life” Walmart's mission on which its business model is based on. The current President and Chief Executive officer of Walmart; Michael Duke stated that the company is well positioned in today's difficult economy and tomorrow's changing world (WM Annual Report, 2008). With $405 billion in revenues net sale (WMAR, 2010), Walmart is said to be World largest retailer in the world and the largest employer in the US (Basker, 2007). 2 million associates in more than 8,400 stores around the world Walmart's serve more than 200 million customers and members each week. Walmart has grown in the US market because it connects itself symbolically to the dominant ideologies of American life. As a matter of approach, Walmart chains are assumed to focus on sales and margins in the short run. Indeed its Everyday Low Pricing format has catapulted it into the leading grocery chain in the U.S and International that was very successful (Jones, 2004)

Wal-Mart today

Today, with $288 billion in annual revenues (more than Switzerland's GDP) and over $10 billion in profits, Walmart is the world's largest corporation, according to 2005 Fortune 500 list. It operates over 5,000 stores worldwide and employs over 1.6 million people” (Frank, 2006) Walmart USA alone has more than 4,300 stores employing more than 1.4 million associates including Walmart Discount Stores, Walmart Supercenters, Walmart Neighborhood Markets and Market side. In 2004 Walmart handled 8.8% of U.S retail sales and the number has since been increased. Meanwhile Walmart International is consist of more than 4,000 stores and 800,000 employees in 14 different countries (Basker, 2007).

Walmart's Business Model

“A business model describes the rationale of how an organization delivers, captures and creates value”(Osterwalder & Pigneur, 2010:3). Although Johnson et al.(2008) considers only four key elements of the business model, the analysis of Walmart's Business Model will follow Osterwalder and Pigneur's (2010) Nine Building Blocks.

Value proposition

Walmart's value proposition is based on offering Everyday Low Price (EDLP). This is the core of Walmart's Business Model, and the rest of the key features of Walmart's Business Model are aligned to keep the everyday low price. This proposition implies that the customers do not need to wait for sales to have the best deal possible (Manning et al., 1998). Besides, not only the sells convenience is associated by providing the wide range of products and services to choose from, but also with one-stop is possible to make all the shopping needed, from groceries to pharmacy (Basker, 2007). Walmart' customers save time and money.

Distribution channel

To deliver its value proposition Walmart communicates with and reaches its customer segments with its distribution channels which are owned and direct, and brings higher margin. Walmart also is corresponding with its customers mainly through mass media and other ways which have a low cost, such as internet.

Customer relationships & Customer segment

Walmart establishes a customer relationship is based on self-service and automated and towards co-creation of some products once it is ...