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Walmart Expansion

Walmart Expansion

PART 1

Introduction

Information technology in is enabling large data to be studied and processed to be logical where traditional methodology is no longer as effective. Companies are employing data analysts to apply statistical or logical techniques to find trends and solve problems. Retail stores need to fully understand their consumers in order to remain competitive and relevant in the market. They have to produce promotions and campaigns to make sales and achieve marketing goals or they risk missing out on market opportunities. It is difficult for retailers to understand the nature market conditions especially when stores are located in different geographical locations. Data applications enable these retail stores to use data from previous years to forecast the upcoming year’s sales. It also provides retailers with analytical discernments to determine clientele with preferred products at preferred time in a specific store in various geographical areas.

In this paper, I will analyze the data of leading retail store, Walmart to define business drivers and forecast which stores are affected by various scenarios like holidays and the impact on sales.

Retailers want to ensure profitability by studying about factors that affect sales, this way they can maximize their profits by ensuring customer satisfaction in all geographical areas (Zucco et al, 2020). Retailers fail to use technology to measure market potential at the right time. For instance sudden spike in sales for a particular product can catch retailers off guard leading to loss in potential sales. But with knowledge on the sources of the sudden demand and the factors leading to this, retailers can ensure stock is available to customers and maximize on sales.

These predictions can guide retailers to mark future trajectory and ensure they make better decision for success in the future.

Social media data solutions

Data from the social media is amorphous and casual, I will do analysis and mining petabytes of this data to identify what is important and then match it with meaningful products (Pejić Bach et al, 2019) Walmart has been making data driven marketing decisions for years and it works well. Social media data from Facebook, twitter, and LinkedIn have been essential in generating retail related big data insights. For instance Walmart held a social media crowdsourcing competition that attracted over 5,000 entries and over I million votes in America. The contest assisted entrepreneurs in getting their products in Walmart shelves. Many people pitched their products and got exposed to millions of audiences, the best products appeared in Walmart shelves for sell. Social media will be critical for me as a data analyst and for the team to determine suitable locations for expansion of stores.

Social Genome

Walmart is also reaching its clientele who tweet or talk about our products to advise them about their products and give special discounts. This is achieved through social genome which was developed by WalmartLabs to analyze billions of Facebook messages, tweets, YouTube videos and blogs. It pools public data from the web and social media data, proprietary data like client contacts and customer buying history and uses it to analyze user context. Social media analytics operates at 60 billion social documents and assists traders monitor common interests in real time or question earlier trends. It also shows geographical disparities of social opinions and call levels. There are tools that match search trends to assist in making correlations. These tools together provide social insights that are very powerful in decision making and especially in instances when the company wants to expand to new geographical locations.

Predictive analytics

This is at the core of supply chain as it assists in reducing overstocking of products that do not move and properly stock what is on demand. Walmart suppliers use real-time vendor catalogue management system to minimize inventory of specific products that are not on demand. This helps retailers to save resources to purchase or buy products that are in demand and increase profit margins.

Data analysis alone will not help Walmart to remain world’s biggest company in terms of revenue other factors come to play like company strategy, advertising, culture, beliefs, brand recognition among other. In order for the executive team to make the right decision about the expansion they need to also look at all these factors.

Walmart Inc is an American International retail company that runs a retail stores known as supercenters and department and grocery stores with its headquarters in Arkansas. The group was started in 1962 by Sam Walton. It also operates Sam’s club retail stores. According to Fortune magazine global 500 list in May 2022, it is the world’s leading company in revenue amounting to 570 Billion dollars annually. It is the biggest private employer in the world with about 2.2 million staff. It is a family owned business managed by the Walton family and publicly traded; the heirs own 50 per cent the company through their various holding company Walton enterprises and individual holdings. In 2019, it was the leading largest American grocery retailer, with 65 percent of its sales worth 510 Billion dollars coming from American operations alone. In April 2022 Walmart international operations comprised of 5250 stores employing 800,000 staff in 23 countries. There are wholly owned operations in Canada, Brazil, Argentina and the United Kingdom, it is the biggest private employer in America, Mexico and Canada. Walmart’s international retail units measure approximately 186,000 square feet and the wholesale units measure approximately 158,000 square feet.

Wal-Mart Company Strategy of dominating the retail market.

Walmart has a strategy to always dominate the retail market, this retail policy was put in place by its founder Sam Walton and it is still followed by the company since 1962 when it was founded in Arkansas. It is a discount retailer that sales its products at the lowest price

For a successful discount Walmart cuts the price of its products much as possible and get its profit from the volume of sales made. Every retail store is cheered to be fiercely competitive against all the other stores until it increases dominance over other local competitors. This strategy has worked over the years in Walmart’s expansion ventures and has achieved dominance making use of its size and volume buying power
Expansion internationally

Expansion is at the heart of Walmart and it has achieved this successfully over the years. Looking at the data it shows the company’s power and dominance, Walmart is the biggest private employer globally with about 2.2 million staff. In April 2022 Walmart international operations comprised of 5250 stores employing 800,000 staff in approximately 23 countries. In America, Wal-Mart is the largest retailer, with over I million staff in 3,000 outlets and 77 supply centers. Walmart has a customer base of 100 million in over 50 states every week. It has stores spread all over the world;  in Canada, Argentina, Mexico, Brazil, China, Korea,  Germany, and the U.K. During expansion Walmart is known for its aggressiveness and influence (Walton, 2012).

Lately Walmart is using a new expansion strategy of gaining access into a country through business takeover of a leading retailer, once it buys the company; it converts it into Walmart stores. For example Walmart acquired 122 retail Woolco stores in Canada in 1994, today they have grown to approximately 196 stores. In 1998, Walmart also bought Wertkauf retail stores in Germany, today they have grown to 94 stores. In the United Kingdom Walmart acquired ASDA chain of 229stores, it has since expanded to 252 Walmart stores increasing its international presence in these countries. This take over strategy makes the company gain advantage when it expands in to a new market, just in one blow, the competition is eliminated and Walmart gains staff, real estate and a huge presence at the targeted location (Walton, 2012).  Very few companies can achieve this effectively, but Walmart uses its size and wealth to achieve this successfully. Slowly the company then starts to evaluate its competitors and starts to remodel the acquired retail stores to have the Walmart feel and builds new big stores in the new market. It is currently the biggest retailer in Canada and U.K owing to this strategy.
Creating brand recognition

Through rigorously advertising campaigns on television and newspapers Walmart creates an impression of satisfaction for its customers and customers quickly link the retailer with its reputation of offering low prices for its products (Pandey et al, 2021). It remains true to its character of using real Walmart retail stores and staff in its advertisements and features subjects like low prices always. Walmart participates in partnerships for instance its stores have McDonalds restaurant inside them. Taking advantage of its size and wealth exclusive advert campaigns are made with movie companies in Hollywood.

Walmart new retailing sectors

Walmart has embraced a strategy to branch out into new retailing sectors like pharmacy, automotive repairs and grocery sales following its founder’s vision of becoming the best retailer in the world.  It has also ventured into grocery store business, electronics, automotive repairs, pharmaceuticals, jewelry, gardening and travel planning.

 

The tradition of Walmart has been selling discounted house wares, plastic good, clothes, sportswear and toys. It has also been selling stationery and other office supplies, hardware, paints, cosmetics toiletries, shoes, books magazines and confectionary. When Walmart sets up shop it competes with business around often putting small competitors out of business. It puts fear into its potential competitors by dominating in all products sold to become the leading retailer in that sector (Pandey et al, 2021). This domineering attitude sometimes leads to protests from competitors.

Walmart’s competitive strategy

Walmart competitive strategy is to dominate in all sectors it operates in by selling goods at low prices to outsell its competitors and expand. It achieves this by building more stores, enlarging existing stores and expanding in other retail sectors all the while making profits and dominating the market and putting some of its competitors out of business.

The culture of Walmart is to sell at low prices and offering good customer service. The company also beliefs in;

  • Respect for the individual through caring for their staff and supporting them to shine in their career.
  • Service to its clients by maintaining their pricing policy of selling products at the lowest prices as possible and providing excellent customer service
  • Striving for excellence by expanding their business into fresh markets and to grow.

Walmart also gives back to the community by getting involve in charitable contributions it is affiliated with charities like, the Children’s Miracle Network

There are directives requiring all staff to answer customer of supplier queries within 24 hours. Staffs are also required to smile while greeting customers in the store within 10 feet from them as part of the company’s hospitality policy. They recite and chant company slogans every morning.

Walmart Strengths
Walmart is the world’s leading retailer; it is the biggest retailer in America, and other various countries like Canada and United Kingdom. It has also been ranked as number one in
sales in Fortune Magazine.
Walmart weaknesses
Walmart’s weaknesses lie in three areas;

  • Widespread labor relations problems, the retailer is opposed to unions and their employees are not in unions. Labor groups accuse the company of abusing workplace rights. This is in contradiction of their founding principles of respect for staff.
  • Community relations and diverse public relations problems- a successful corporation the size of Walmart is bound to have community relation problems. Community groups accuse Walmart of destroying the local retail environment. The most vicious critics are those the corporation has put out of business owing to its competitive advantage of size and wealth.

 

PART B

I recommend that Walmart expands to the United Arab Emirates.

UAE is one of the Gulf countries with a fairly good business environment. Import and export business is lucrative given Dubai’s central location globally. Starting an international retail store business in Dubai can be rewarding due to expansion opportunities and profits.

In recent years UAE has made it easy for entrepreneurs from all over the world to do business in the country. Foreign business people can take advantage of the zero tax on both corporate and personal income. Entrepreneurs are free to retain 100 percent ownership of their businesses.  The official language in UAE is Arabic, there are several languages spoken by expatriates including Hindi and Persian, English is also widely spoken. Many symbols across the country are printed in Arabic and translated in English and Urdu. This depends on the percentage of the population that speaks the language in the area.

Only one ninth of the residents in UAE are citizens the rest are foreign workers and their dependents. Arabs from other nations account for a significant percent of the population and many Filipinos have migrated in large numbers to work in various industries. There are some political and economic challenges that can hinder the success of Walmart retail stores. UAE has one of the largest malls – Dubai mall, this is a strategic location to set up Walmart store. Major competitors for Walmart are big stores like Lulu and Carrefour centers. Walmart expansion in Canada, UK and other countries has been successful (Seetharaman et al, 2017).  UAE is a nation with diverse population, it does not consist of locals only but a significant percent are people from other nations who live and work there.

Religion is very important in UAE , it is primarily Islam. Religion defines the people’s way of life, their culture and beliefs. Religion is a big influence on politics and business environment. Even though Islam is the religion practiced by the highest population, the nation allows other religions and respects them. A big population can speak English and so foreigners easily mingle with locals. Walmart successful entry in UAE will serve as a catalyst for it to expand in the continent (Tan et al, 2018).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

 

Pandey, R., Dillip, D., Jayant, J., Vashishth, K., Nikhil, N., Qi, T. J., … & Qhi, L. Y. (2021). Factors Influencing Organization Success: A Case Study of Walmart. International journal of Tourism and hospitality in Asia Pasific (IJTHAP), 4(2), 112-123.

Pejić Bach, M., Krstić, Ž., Seljan, S., & Turulja, L. (2019). Text mining for big data analysis in financial sector: A literature review. Sustainability, 11(5), 1277.

Seetharaman, A., Niranjan, I., Saravanan, A. S., & Balaji, D. (2017). A study of the moderate growth of online retailing (ecommerce) in the UAE. The Journal of Developing Areas, 51(4), 397-412.

Tan, B., Yan, J., Chen, S., & Liu, X. (2018, December). The impact of blockchain on food supply chain: The case of walmart. In International Conference on Smart Blockchain (pp. 167-177). Springer, Cham.

Walton, S. (2012). Case Study: Walmart. Strategic International Management, 67.

Zucco, C., Calabrese, B., Agapito, G., Guzzi, P. H., & Cannataro, M. (2020). Sentiment analysis for mining texts and social networks data: Methods and tools. Wiley Interdisciplinary Reviews: Data Mining and Knowledge Discovery, 10(1), e1333.

 

 

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Walmart Expansion

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