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Case Study: Walmart Inc. 2021

Total Word Count: 7,700
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Table of Contents
1. Part A
a. Assessing the potential for strategic uncertainty in the external market and its impact upon
Walmart.
b. Critical evaluation, from a resource-based perspective, Walmart’s ability to deliver its vision and
mission.
2. Part B
a. Critical analysis of TWO strategic marketing options available to Walmart for maximizing
growth and profitability.
b. Critical appraisal how organizational constraints could limit Walmart’s success in implementing
the TWO strategic options identified in Task.
3. Part C
a. Background information of International Distilleries Limited.
b. Critical evaluation on the role of innovation management and new product development (NPD)
within the organization.
c. Assess the financial benefits and risks for your chosen organization for managing innovation
and developing new products (NPD).
4. Strategic Audit
5. List of References
6. List of figures

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Hoorah! Pension well

spent at

Did we miss
anything?

How could we? we

were at

Task 1
Word Count 1,421
Part A – 581
Part B – 776

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A. Assessing the potential for strategic uncertainty in the external market and its impact upon
Walmart.

Walmart has moved up to the number one retailer in the world with over 59 years’ experience in
the industry with the highest sales turnover of any other retailer in the world. Walmart is the
number one retailer in food and grocery in the US and Mexico including 25 of the countries and
China. This chapter would analyze the potential strategic uncertainty in the external market and
its impact upon Walmart while bringing in the results obtained through the strategic audit.

Figure 1 Walmart global presence. Source https://www.slideshare.net/tasuu/walmart-84227508

The PESTEL conducted in Appendix 1 shows favorable conditions in terms of technological and
environmental aspects. Walmart is constantly focused on improving the technology and the level
of technology adopted in their businesses as well as being constantly focused on sustainable
development. with the demographical changes Walmart has successfully adopted selling through
E commerce channels two offer more convenience to their customers while managing to reduce
the carbon footprint by 7.7% in 2020.

the political economical sociological and the legal aspects are expected to worsen due to the
overall collapse of the global economy in view of the unraveling Covid-19 pandemic. the more
Walmart would diverse into various political jurisdictions the number of political interventions
would hike, as well as the strategies needed to cope with all the economies would be diversified.
and some may lead to litigations due to breach of laws and copyrights infringement, therefore it
can be concluded that that strategic uncertainty in terms of a PESTEL analysis can be considered
moderately high.

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according to the five forces analysis conducted in Appendix 2, the lowest level of impact is made
by the suppliers of Walmart, with operations spread across the globe and with access to multiple
options to source their diverse product portfolio. the threats posed by new entrants are negligible
since not many investors are equipped with a massive amount of capital to enter into the retail
industry and compete with the existing players who have created natural barriers to entry through
economies of scale, specialization, and excess capital reserves at hand for further expansion.

however, in terms of industry competition and the threat of substitutes Walmart would be
required to constantly revisit their existing strategies in order to match the level of competition
and the threat posed by the above. where online sales and Omni stores are in the rise, the
acquisition of more physical stores end expansion through fully owned subsidiaries would not be
a wise decision, for many geographical locations, the customers prefer to order online and get the
goods delivered to their doorstep. further since Walmart offer generic products which have
multiple options to substitute them with, specialization of each product portfolio and offering
specialized goods is not quite feasible leaving a lot of space for the competitors to fight for the
same income category.

In terms of the value created and competitive advantage created through the core values of
Walmart, Walmart has managed to deliver to the customers what they promised i.e: more for
less. The value chain of Walmart would be considered to be moderately complex refer Appendix
4, there are many primary and support activities connected together in managing all the product
portfolios however it can be concluded that despite all the complex strategic positioning Walmart
demands, Walmart had been able to deliver their products at a little cost to their customers
through the economies of scale and the quantity discounts they received through their suppliers
therefore minimizing the uncertainty of the costumers switching for a different supplier.

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B. Critical evaluation, from a resource-based perspective, Walmart’s ability to deliver its vision and
mission.

Mission – “To save people money so they can live better.”

Vision – “A wide assortment of good quality merchandise; the lowest possible prices; guaranteed
satisfaction with what you buy; friendly; knowledgeable service; convenient hours; free parking;
a pleasant shopping experience.”

As for the authors belief the best way to generate results east through an inside out up approach
where the core and non-core capabilities of the organization are utilized to deliver the vision and
the mission an entity has promised. the VRIO model (prefer Appendix 9) was the tool utilized to
analyze the internal capabilities of the organization, and to analyze the Strategic planning and
strategic management techniques that informs decision makers about an organization's abilities
and resources that contribute to its extensive competitive advantage.

Organization
Valuable

Imitable

Rare
Organizational Resources and capabilities

Non – Core Abilities    

Worldwide operations network and appreciating real estate values    
Abundant human resources, and less skills required for employment    
Diversified product offerings    
Availability of a network of suppliers with lower switching costs    
Sustained Competitive Advantage    
Unbeatable price offerings    
Unbeatable brand value and recognitions    
Mass scale operations, economies of scale, Market Penetration through    
lower prices
Focus strategy on expanding e-commerce operations    
Availability of customer data for the purpose of futuristic focus    
Core values of Walmart    
Environmental focus and CSR stance of Walmart.    

Walmart is the largest retailer chain in the world and the hypermarkets are no longer the threat
to the existence of Walmart due to the unrivaled prices Walmart offers to the consumer, this way
Walmart had been able to create brand value and brand recognition throughout the world.
Appendix 3 summarizes the value proposition of Walmart, highlighting the core values of Wal-
Mart where service to the customer, respect for the individual, strive for excellence and act with
integrity from the culture of Walmart that it's designed to deliver what they promised.

Walmart’s key competitors such as Tesco, Carrefour, Kroger, JCCU and etc. are large scale
established retailers with operating businesses that significantly benefit from economies of scale
and specialization however Walmart has the ability to top the competition through being readily
available in 27 countries, and 11,400 stores worldwide which is an unbeatable resource capability.

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an emerging threat to Walmart would be the rise of E commerce channels Such as Amazon, and
the Omni channels where a combination of retail business and E commerce all offered to the
consumer. However, Wal-Mart has re directed its corporate strategy into focusing more on
ecommerce business channels and incorporating these changes to their diversified product
portfolios. this way Walmart still has the advantage of retaining their existing customer base
without losing a majority of the customers to new players.

It is unchallenged that many leading retail chains cannot match the costs of Walmart and the
expansion strategy of Walmart. The entry to China is a win for Walmart since at present an
average Chinese citizen earns $6789.34 (Statistica, 2020) and with an average inflation rate of 3%
(Macrotrends, 2020) which is promising for Walmart to generate higher revenues. However, with
the unraveling effects of the pandemic with China being the epicenter of the pandemic the
aggressive expansion strategy of Walmart could be put to greater ambiguity since at present China
has opted to be a closed economy.

further the aggressive expansion strategy of Walmart to acquire an own property would put the
cash reserves of Walmart at risk since the unexpected results of the COVID-19 virus demanded
many businesses to close down their physical stores. Therefore, while a significant cash balance
is stuck as assets of Walmart with a value of dollars 236,495 million Walmart would be required
to look for alternatives for the excess amount of physical assets owned. Walmart would be
required to research and invest heavily on expanding their online an E commerce presence in the
retail industry, which was a weak arm of Walmart, since many rivals are investing heavily on
advertising and implementing on an E commerce platform.

Finally, it can be concluded that Walmart is a firm that is always organized and ready to exploit
the resources be it internal or external. it is suggested that Walmart continues to deliver an idea
to their vision and mission that he is to provide higher quality products at a lower cost which is
accessible to all types of consumers without segregation while being focused on minimizing the
capital costs and investing more on a virtual platform and databases where the future off the
retail industry lies within.

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Task 2
Word Count - 2051
Part A – 1030
Part B – 979

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A. Critical analysis of TWO strategic marketing options available to Walmart for maximizing
growth and profitability.

Marketing tactics are used by various companies to engage with their clients. It is also utilized to
enlighten customers about the features, specifications, and benefits of the company's products.
Its primary purpose is to persuade the target audience to buy specific products and services. The
marketing strategies may be brand new or have already been tried and tested. Effective marketing
techniques aid in gaining a competitive advantage.

The past and the current organizational marketing strategies were critically analyzed by the
author through (Appendix 10), the business strategy and the strategic options off the organization
read the current capabilities and constraints were analyzed by Appendix 11 and the necessity of
developing an internal marketing strategy was critically analyzed through Appendix 12, tabulating
all of the results gain from the above matrix the following two strategies can be given as the key
marketing strategies that could be implemented by Walmart in order to pursue their goal and the
vision in the intended market.

1. 4 P’s Strategy

4 P’s Strategy
product availability of a vast * Walmart provides a vast assortment of products in practically
range of products is every category, such as food, consumables and groceries,
the key to a market hardware, furniture, appliances, health and wellness items,
penetration strategy clothing for all ages, and entertainment
the higher products * Bulk purchases to take advantage of discounts and economies
offered higher the of scale.
profits would be and * Walmart maintains good working connection with their
the market share vendors, and an array of vendors are available for negotiations.
would be. * Walmart has created Its own brands that would be exclusively
sold at Walmart stores at lower prices.
place Walmart uses a variety * A powerful and a developing eCommerce platform that allows
of tactics to guarantee users to make purchases without being physically present at a
that all aspects of the store
location as part of the * A carefully planned network of distribution channels and stores
marketing mix are that allows the maximum possible of access ability do the
efficient and effective: customers of Walmart (187 Walmart and 221 Sam’s Club
centers)
* Multiples geographic locations, especially in the United States,
with Walmart stores strategically placed.
* A truck service established for effective door-to-door
deliveries.
* Differentiation in branding: Walmart Supercenters, Walmart
Neighborhood Markets, Walmart Express Stores, and Walmart
Discount Stores all have their own branding and distinction.
price A product's price has * Offering extremely low prices through focusing on bulk sales
an impact on its future rather than overpricing to maximize sales.

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success and long-term * Excellent procurement strategies that enable the company to
viability. Companies negotiate with the supply chain's most cost-effective approaches
can choose between a in order to keep costs low and generate economies of scale and
high-price - low- long-term returns.
volume strategy and a * Diversification guarantees that complementary commodities
low-price - high- can drive sales of other items and that a larger share of the
demand strategy. The necessities are served through a one-stop shop if a product is
profit per unit sold will under-promoted.
be high if the product
is priced high if prices
are high.
promotion An organization's * Frequent promotions run and offering of loyalty programs for
promotional returning customers.
techniques are the * For the items they sell, the firm offers excellent warranties and
methods it employs to replacement procedures. They employ secure delivery
attract or educate the procedures to ensure that customers who purchase items
public about its receive the finest possible service.
product. * Promoting the “low price” concept through all the channels
and the product mix.

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Ansoff Matrix: Market penetration, market development, product development and diversification
strategies

Market penetration creation takes place second an entity Walmart’s entire strategy,
follows an aggressive price war values and the corporate culture
through reduced prices of the products is based on one concept that is
they offer which creates a natural “selling more for less” second
barrier to other rivals which is unmatched an
unchallenged to date.

market development market development takes place when Wal-Mart has not ceased to
an entity aggressively seeks for new amaze the market and the
markets irrespective of the business sector to date through
geographical boundaries its aggressive expansion
strategy that enabled them to
establish in the Chinese, African,
Argentinian, Canadian and the
Mexican markets while holding
the number one retailers title in
the US.

product development product development is the creation of based on its 11,400 thousand
new products to be introduced to the stores and 405 distribution
existing customer base this would centers spread across the globe
leverage its relationship with the Walmart office an array of
existing customers through the products starting from grocery,
offering of multiple payment gateways. health care, home decos,
electronics, clothing for all ages
end entertainment where new
ranges of products are
constantly introduced to
capture a customer's attention.

diversification diversification means venturing into the installation of the Walmart

new waters i.e. developing into a brand Media Group can be given as an
new product and a market. this example of diversification
strategy requires a significant amount strategy which is extremely
of time resources and insights since the different from the existing
success is partly dependent on product portfolio
forecasts and part on the reception of
the market of the product

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out of the above excellent marketing strategies that can be prioritized by Walmart the author
analyzes one man critical drawback of Walmart's overall marketing strategy i.e: Walmart is
already established as low price/cost service provider/retailer, which implies that Wal-Mart is well
established itself as “cheap” in the eyes of a rational consumer. therefore, the consumers who
crave for lower prices in all aspects will always choose Walmart as their first option. however, on
the other hand this limits the ability of Wal-Mart to diversify into high-cost high end product and
customer segments. In conclusion it can be observed that an ideal mix of a strategic marketing
option would be an appropriately proportioned Ansoff Matrix with listen focus on more focus on
market development and product development.

Canada
US 24%
28% ,

China
7%
India
1%

UK Japan
24% 16%

Figure 2 Hypermarkets, and supermarket share

US Canada
UK 6% 6%
11%

China
Japan
32%
13%

India
32%

Figure 3 Convenient Stores and Gas stations

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B. Critical appraisal how organizational constraints could limit Walmart’s success in implementing
the TWO strategic options identified in Task.

Walmart’s establishment as a low-cost provider

Wal-Mart has already tapped into the middle income and the lower income level of customers
with their low-cost market penetration strategy. with the income shifts and the income gaps
becoming wider if Walmart wants to establish a high-end retail brand or any other private label
in the customers point of view Walmart would always be “the cheap one”, where in the authors
point of view is a difficult state to escape.

The firm's financial performance

even though Walmart records higher number of revenues and higher volume in sales it was
analyzed in Appendix 19 that Walmart's revenue is increasing at a reducing rate which is clearly
not a good sign photo global retail leader. the decreasing gross profits even though it maintained
costs of sales hints that the cost could be further reduced all the margins can be further increased.
if purchases are made through related entities a possible transfer pricing issue can be pointed out
that Walmart is not being fairly compensated which slows down the progress of Walmart.

the gearing of Walmart is also slowly increasing where when it reaches 50% of the total assets of
the company managing gearing and the working capital needs would be a difficult task considering
the severity of the operations.

Overspreading network of branches

Even though for a company globalization east considered as a plus mark too much diversification
can also be a threat to a company since at one point the operations could be unmanageable.
considering the number of private brands and the whole product portfolio of Walmart how much
of management attention and specialization that is going into each label is a question. Instead of
focusing on a limited number of brands and labels, looking through the same class at the whole
product portfolio has even Walmart sorts of stagnated results.

Emerging and fast spreading online sales

even though Walmart heavily invests in developing their digital presence, Walmart’s
establishment as a low-cost provider has already dominated it's future in the digital platform the
author's point of view. Logical and the innovation nodded summarized in the Appendix 6 gives
the key results and Wal-Mart had already done as a product diversification but not as an
improvement to Walmart's operations. this has created a lag between the other E commerce
sellers such as Amazon and Wal-Mart where Amazon had already captured a major portion of the

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online presence and now they are looking at expanding into physical stores, well Walmart has an
abundant number of physical stores in an era where customers prefer to goods being delivered
to their doorstep.

Internal weaknesses

Walmart is facing a difficult time related to labor related lawsuits, copyrights an authorship
infringement related litigations and other allegations related to corruption. in the author's point
of view this happens due to over trading and overcomplex business structure. the more complex
the business structure is more would be the employee related grievances and miss management
issues would pop up. therefore, the best solution for Wal-Mart would be moving slowly towards
the digital retailer where these problems are largely reduced or minimalized. litigations another
legal aspects occur due to poor management, goal in congruence and lack of objectivity.
therefore, appointing of leaders that would go by all the compliance standards is critical for
Walmart to repair the damaged reputation.

Uncertain economic conditions

Interest rates and exchange rates have almost remained the same despite the pandemic in 2020
second however the overall global spending has declined where customers are essentially focused
on buying only essential goods. further do you know the geographical differentiation of Walmart’s
retail outlets positioning each and every second economic regions effects would have a huge
impact on the performance of Wal-Mart. second example Brexit has left the UK market at a highly
volatile stage there a significant amount of trade agreements were revoked.

on the other hand spreading into Asian end African regions is again highly volatile due to the
threat of uncertain economic conditions, uncertain political conditions, threats posed by
terrorism etc.

COVID-19 pandemic

the impact of the COVID-19 pandemic continues to unravel and present challenges to the global
economy, there human life is largely at a threat with unsuccessful vaccines and inconclusive data
to develop a precise solution. the pandemic has forced stop the operations of the whole world
well some countries have closed their borders indefinitely to the outside world, forcing down
changes to the human lifestyle and behavior.

global supply chains have collapsed, factories are shutting down and the focus to produce health
and safety products is more rather than the majority of the non-essential goods any retailer would
offer. most retailers either facing two extreme conditions all stuck outages or obsolete stocks.

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Increasing health and sustainability consciousness

it is unarguably a fact that the consumers are gaining more and more knowledge and cannot be
misled or misguided. the customers are increasingly aware of the health and benefits of the
products they consume. pressure groups and advertising channels are increasingly spreading
knowledge and awareness regarding the health issues, putting all the manufacturers of consumer
goods at the pedestal to continuously revisit and look at what goes into each of their products.
therefore, additional costs would be incurred, and increased quality inspections would be
required, or discontinuation of product lines and total overhaul of production processes would
put Walmart at an unstable position which cannot be eliminated or avoided.

The customers are again fully vigilant on their suppliers being sustainability conscious, therefore
producing of written material with zero action would not do any good to any entity. as a result,
Wal-Mart an other brands of Walmart has geared up to implement sustainable practices, and
thoroughly screened their suppliers sustainability compliance as well. all of these would result in
additional costs that would weaken their current expansion, and even implemented the
uncertainty of customer rejection is extremely high.

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Task 3 - 1942
Part A - 494
Part B - 601
Part C - 761
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A. Background information of International Distilleries Limited.

Blending Team Bottling Team
• Organization – International Distilleries Limited
• Category of operations – International Distilleries Designation Employee Designation Employee
Limited (IDL) is a producer of alcoholic beverages Count
Count
based in Sri Lanka.
General workers 08 General workers 40
• Size of – the organization operate in two locations
and the size of the production team is as follows Vat Cooper 01 Machine Operators 11

Production Officer 02 Line Leaders 03

Internal and external stakeholders
Executive- Production 01 Production- Officer 02
• Internal stakeholders –
Executive – Blending 01 Executive – 02
Production
owners of the entity, top management,
production team, employees. Asst. Manager- Blending 01 Asst. Manager- 01
Production
• external stakeholders
Manager- Blending and 01 Manager Production 01
customers, general public, government,
pressure groups, religious entities, media New Product
Development
Total Staff 15 Total Staff 60

Category Product

Arrack Old Reserve, Old Arrack, IDL Black Label, IDL Green Label, IDL Red Label, IDL White Label, IDL Gold Label, Blue Sapphire
Brandy Ritz Brandy, Ritz Napoleon Brandy, Ritz Cherry Brandy, Herbiza Brandy
Gin Ascot London Dry Gin, Ascot Lemon Gin, Ascot Pink Gin
Vodka Celebration Vodka, Bacardi (Licensed under the Bacardi group)
Rum Calypso Gold Red Rum, Calypso Silver Rum

key customer segment personas

Category Product

Male • 55% of the population is between the ages of 18 and 65. Purchases for less than LKR 900 Low IDL Education offers
generic products in various volumes. There is little to no social media interaction. Purchases - Purchases a small
handful of products on a regular basis
• 25% of the population between the ages of 18 and 30, Purchases under LKR 3,000Frequency - twice a week,
commonly referred to as "TGIFs," On social media, he is alarmingly active. Purchases - tries a variety of brands to see
which are the most popular. IDL, who is usually employed and reliant on their parents, provides general yet
"experience-based" products
• About 15% of the population is in the 30+ age range. Purchases of more than LKR 3,000 but less than LKR 10,000
Once a month or more frequently, Maintains social standing by being moderately engaged on social media. Purchases

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- tries a variety of brands to see which are the most popular. IDL is a company that provides basic but "experience-
based" products.

• About 5% of the population is 55 years old or older. Over LKR 10,000 in purchases Frequency - once a month or more,
somewhat high social media activity, maintains social status, frequently engaged in social services Purchases - high-
end items Employed/retired, Imported recipes and blends are available.
Female • About 50% of the population is under the age of 30. Purchases under 3,000 dollars Weekly or weekly, shockingly
active on social media, keeps social status, Purchases - Cocktails and beer are her favorites. "popularity" is one of the
goals. Employed but reliant on his parents.
• 50 percent of the population is over 30 years old. Purchases with a value of less than $5,000, Weekly or monthly is
the most common frequency. Maintains social status by being alarmingly active on social media. Purchases - Beer,
liqueurs, and strong liquor are his favorites. employed, self-centered

B. Critical evaluation on the role of innovation management and new product development (NPD)
within the organization.

Modern businesses grow and succeed for a multitude of reasons in today's business environment. Some
businesses are known for their products, while others are known for their services, and yet others are
known for less obvious qualities such as strong brand loyalty or captivating marketing campaigns. IDL has
seized the market and gained a major market share throughout the years, competing closely with DCSL,
Sri Lanka's largest spirits’ company.

The role of innovation plays a critical role in the success of IDL, where ideally is currently positioned as the
number 4 in Sri Lanka that the company aims to be the number one alcoholic beverages developer in Sri
Lanka.

New product in IDL is developing new blends and recipes yes that would address the intended market
group, which in turn would generate the highest profits for the company. 1As a result, who did the
following blends were recently manufactured, amidst the constraints posed by the Covid- even older19
pandemic. The success or the failure of Each product that is newly developed he is directly linked with the
financial performance of IDL.

Figure 4 NPD 1 Herbiza. Source Figure 5 NPD 2. Ascot Pink Gin. Source

1
IDL introduced Herbiza end Ascot pink gin in the year of 2020.

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Innovation on the other hand he's segregated into two parts for IDL second where the first part is directly
linked to the manufacturing process of IDL and the second part is developing an online presence for IDL
which is yet a bottleneck that has a very slow progression in terms of achieving.

as per the current practices IDL east dedicated to achieving manufacturing excellence through reducing
wastage and digitalizing the maximum possible number of processes that would reduce the human
intervention. The production plan is mainly based on the forecasts prepared by the organization to the
use of technology and ERP systems, however the current forecasting method's key bottleneck is IDL's
inability to supply items due to unforeseen irregularities. The impacts of the growing pandemic in the
alcoholic drinks industry took a different hit in 2020, whilst the Sri Lankan government made efforts to
halt the import of rectified spirit to limit cash outflows in light of the deepening economic crisis.

Speaking of the digital presence of IDL In Sri Lanka, customers travel a shorter distance to buy booze
online. Foreign/imported booze can be acquired through online sources. The state, on the other hand,
has yet to grant permission for local spirits to be sold on the internet. Another reason why people choose
to buy local spirits over imported spirits is because the imported liquor pricing includes higher tax rates
ad duties, and purchasing alcohol under the quota at BIA's arrival port appears to be a reasonable
alternative. As a result, it can be stated that online liquor purchase involvement in Sri Lanka is fairly low.

Regardless the efforts of IDL to create a superior product blend through innovation and new product
development, the following flaws can be identified as common issues. If gaps are not addressed properly,
they can develop to performance gaps, which can degrade a company's reputation. (Roetzer, 2014)

1. Individuals Gap - in the modern context of developing a marketing strategy, a common gap is the
absence of trained, innovative, and experienced talent to sell products/portfolios.

2. Technological Gap – The technology gap identified in the distilleries is rather large, as enterprises are
more accustomed to routing work than to thinking outside the box in order to access cutting-edge
technology and achieve competitive advantage.

3. Strategy Gap - Finally, the marketing strategy gap can be identified as a critical point that can have a
number of negative consequences, because if the overall strategy is not linked with the marketers' point
of view, conflicts of interest may arise.

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C. Assess the financial benefits and risks for your chosen organization for managing innovation
and developing new products (NPD).

The alcoholic beverages industry in Sri Lanka is somewhat confused, that is despite the economic changes
and the demographical and cultural changes the sales and the demand for alcohol had not faced many
fluctuations. for International Distilleries Lanka limited the financial benefits of managing innovation and
development of new products had been in additional stream of revenues generated apart from the
normal abnormal profits the company had always generated.

as explained in the above chapter IDL introduced two new products to the market within the year of 2020,
the additional revenue generated amounted to 5% of the total annual sales of 18 billion Sri Lankan rupees
(IDL, 2020). IDL has reached its economics of scale and long run returns to scale as a result the cost of
producing an additional bottle amounts to 10% of the cost. (IDL, 2020), and the remainder of the 90%
goes out as government taxes. therefore, it can be summarized irrespective of the new products
developed or the current production continues ideal would be at abnormal profits.

one could expect that the COVID-19 pandemic may have had its implications on reducing top lines for IDL,
however contradicting the norms the impact on sales revenue is quite negligible. the management of IDL
was able to successfully predict the future trends of the market and the government decisions therefore
expecting a production cease IDL over produced and held stocks to fill in the gaps. since the effects of the
pandemic and the economic changes were preplanned sales amounts remained unchanged and therefore
profits remained unchanged as well.

the first and the second waves of the pandemic resulted to an abnormal increase in demand since the
loyal customers of IDL made it an important decision to stock up on alcoholic beverages in their
households to keep themselves entertained and to celebrate the festival seasons. the third wave of the
pandemic did not give us much bigger results but however as explained above the sales volumes and
figures remained unchanged, finally the government had to second corona 10,000 billion worth tax losses
due to the liquor manufacturers seizing their production two adhere to the government protocol.2

In terms of risks IDL may require addressing, one of the first beverage makers in Sri Lanka, second is mainly
the loss of sales second to unexpected an unavoidable circumstance. in 2021 the government
implemented a temporary ban on the production of alcoholic beverages to reduce the demand and now
timidly control the social interactions. do you do the effects of the government regulations IDL lost
revenue by 15% second during the month of May and June of 2021.

for an alcoholic beverages manufacturing entity, the biggest risk and the threat that is directed from an
outside perspective apart from the government regulations would be the economic changes and the
legislative aspect. even though the company is focused on developing and promoting an online presence
for IDL as a part of their innovation strategy, if implemented this could raise concerns of who is buying
the product, well a legal of 18 or above is required to purchase the product. tight screening and a detailed
check of the customer would be required when issuing products through an online channel which easy
tedious task since there are multiple ways the forged documents and identities through online channels

2
The above information would need to be considered insider since the figures are not public knowledge, and the
information stated here is produced from the knowledge of the author who is the master blender of IDL.

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when compared to a physical purchase. this could ultimately lead 2 ethical issues and litigations where
she severe compensation and penalties would be levied. This is a threat that cannot be eliminated rather
which needs to be managed.

However, both in terms of volume and quality because the company has benchmarked its procedures
against industry norms and strives to go above and beyond. IDL adopts ISO 9000, which is based on seven
quality management principles to increase production efficiency and effectiveness. ISO 14000 for
environmental management, ISO 22000 for food safety, ISO 919 for the manufacturing of alcoholic
beverages, and SLS 351 for Sri Lankan sampling and testing techniques for rectified spirit for use in
alcoholic beverages.

IDL is also the only beverage company with the following tools, allowing it to be more precise in diagnosing
quality issues and excel in preserving quality while minimizing waste.

a. GCMS head taste instrument, for example, detects volatile and non-volatile chemicals.

b. The alcoholiser method for determining color strength.

c. Spectro bottom scope-based research and development

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Appendix 1. PESTEL Analysis Appendix 4. Value Chain Analysis

Element Indicator Primary Activities

• Inbound Logistics – 3,200 grocery pickup locations
Political Political jurisdictions of the (US), 100,000 suppliers worldwide
countries with operations • Operations – Walmart and Sam’s Club Spread across
Economical Economical changes of the 27 countries, operating different styles of stores
operating countries, increased (approximately 11,400), own brands, e-commerce
taxes to promotes healthier food sites, Walmart Media Group, foreland financial
Sociological Demographical differences of the services, private label brands.
cultures, consumer behavioral • Outbound Logistics – 1,600 delivery locations (US), 187
changes Walmart US and Sam’s Club distribution Facilities, 221
Technological Technological advancements of international distribution facilities,
the different segments e.g.,
• Marketing and Sales - international expansion through
ecommerce segment
wholly owned subsidiaries, joint ventures partnership
Environmental Sustainable expansion
agreements and acquisitions of small-scale
Legal Country/county/state specific
legislative, supermarkets and Omni stores, focusing on innovation
and technology to develop the supply chain and
payment options for consumers. Sustainability
Appendix 2. Porters Five Forces Model corporate social responsibility and environment focus.
product branding new product development an
Force Indicator Level innovation and product diversification.
Industry Large players High
• Services - offering high quality products for the best
Competition (Tesco &
prices, and warranties to other related categories of
Carrefour) and
goods
omni-Channel
retailers • Support Activities
Threat of Economies of scale, Low • Firm Infrastructure - a range of activities are included
new capital in the firm's infrastructure such as total quality
entrants requirements are management, grievances handling, complaint
high, saturated management accounting and finance, legal matters
market handling strategic management and forecasting.
Power of Higher number of Low • Human Resources - human resources play a key role in
Suppliers suppliers Walmart's success where it had spread their network
Power of Worldwide Moderate globally enabling millions of employment
Customers customer network opportunities two individuals worldwide. a CSR
(265 million),
particle is also included in the human resources
increasing health
management where eligible veterans are given a
concerns
chance to work at their network. all the employees are
Threat of Large players (Tesco High
Substitutes & Carrefour) and given a proper training, a reward scheme performance
omni-Channel management for growth another personal
retailers improvement activities.
• Technology - Walmart is still taking its baby steps to be
a full-scale technology enabled retailer. However,
Appendix 3. Value Proposition network is equipped with sales automation software,
customer service through technology enabled
• “More for Less” concept
platforms, data analytics and data mining.
• Wider network of stores around the globe
• Procurement - even though procurement is a
• Multiple brands and product availability
secondary activity it plays a key role in minimizing the
• Sustainable expansion and development
cost of operations of Walmart that in return connects
• Core values (Customer Service, Respect for the to their core value “more for less”. the procurement
Individual, Strive for excellence, Act with Integrity) process involved in purchasing input such as capital
• Culture equipment, raw material, working capital goods come
• CSR and the Philanthropic stance are high. on supplies and other necessities needed for in-house
production.

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The Successful management of the above elements Appendix 9. Resource and competency Audit.
leads Walmart to achieve the breakeven and profits.
Organizational Resources and
V I R O
capabilities
Appendix 5. Competitive Advantage and Value Creation Non – Core Abilities
Worldwide operations network
Value Creation Competitive advantage and appreciating real estate    
values
Core Values are created through vision & mission Abundant human resources, and
statements, and the corporate culture, which would be the less skills required for    
key pillars of Walmart’s competitive advantage. employment
Diversified product offerings    
Mission – “To save people money so they can live better.” Availability of a network of
suppliers with lower switching    
Vision – “A wide assortment of good quality merchandise; costs
the lowest possible prices; guaranteed satisfaction with Sustained Competitive
   
what you buy; friendly; knowledgeable service; convenient Advantage
hours; free parking; a pleasant shopping experience.” Unbeatable brand value and
   
recognitions
Competitive advantage – 2.2 million customers, 25% of the Mass scale operations,
US market share economies of scale, Market    
Penetration through lower costs
Walmart has based it's competitive advantage on activities Focus strategy on expanding e-
that are rare or scares. It's goodwill, brand names, brand    
commerce operations
recognition, intellectual capital and economies of scale all Availability of customer data for
their competitive advantage.    
the purpose of futuristic focus
Core values of Walmart    
Appendix 6. Technology and Innovation Audit
Environmental focus and CSR
   
stance of Walmart.
• E-commerce located throughout the US, Africa,
Appendix 10. CSR and ethical approaches
Argentina, Canada, India, Japan etc.
• Partnering with Universal Studios to carry exclusive • Commitment to achieve zero wastage end 100%
merchandise and its digital technology division. renewable energy.
• acquisition of Flipkart in India and similar forward and • targeting on human rights and working towards a fair and
vertical integrating entities that would give a better safe environment for all its employees.
technological edge. • Focusing on stability and mobility through benchmarking
Appendix 7. Cost Efficiency and offering competitive wages 2 the 2.2 million
employees.
• * Higher cost savings through bulk purchases • Addressing the challenges of climate change,
• * Better pricing options due the availability of suppliers contributions towards preserving natural resources
• * Cost savings through, minimizing the distance between eliminate wastage and working towards equality in
the distribution centers to the customer. society.
• working with organizations to reduce emissions to
Appendix 8. Stakeholder Analysis
manage the effects of climate change.
• Setting up social cultural economic and environmental
goals and working towards the achievement of they set
goals within the targeted period of time.
• Offering jobs at Walmart and Sam's Club locations to
eligible honorably discharged US veterans.

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Appendix 11. Organizational knowledge capabilities and Business strategy - the current business strategy of
flexibility Walmart is cost reduction an expansion. Further in order to
keep the business operations afloat Walmart continuously
Strengths, knowledge capabilities and flexibility reviews its business operations such as procurement,
recruitment come on research and development and
• Market leader recording higher number of sales end a
retainment off business excellence.
wide product portfolio.
• Low-cost leadership and market penetration strategy. functional strategy - implementing an unbeatable low cost
• aggressive expansion strategy. structure, effective management and reduced response
• Market knowledge and the availability of databases for time, second if supply chain management, effective
data mining. inventory management systems, segregation of duties and
• Availability of higher cash resources for expansion and decentralization.
diversification.
• Management competences and ability to grab Appendix 15 alignment with global organizations CSR,
opportunities from the emerging trends. reputation, sustainability, and ethics

Weaknesses • Ensure ethics begins from within, where acting with

integrity is a core value of Walmart.
• labor related lawsuits • goals set to achieve sustainability.
• copyrights and authorships related litigations. o climate change goal - achieve 18% emissions
• allegations related to corruption. reduction involvement operations by 2025. 29% of
the energy needs were sourced through renewable
Appendix 12. Past and current organizational marketing sources in 2020.
strategies
• Reduce or avoid 1 billion metric tons of carbon dioxide
Past strategies emissions by 2030.
• Product supply chain and sustainability goal : purchasing
• Advertising through mainstream media mainly through of perishables, frozen food, farmed and wild seafood
local television advertisements. from sustainable sources, in 2020 nearly 100% of
• real time marketing approaches suggest speaking to Walmart US and Sam's Club seafood were from
customers while they are screaming a store. sustainable sources.
• Benchmarking prices with the competitors • fair treatment for farm animals; in 2020 100% of shell
eggs at Walmart US and Sam's Club met the United egg
Current strategies producers animal welfare requirements.
• Targeting the lower middle-income earners and • joke source USA private brand coffee more sustainably
aggressively positioning themselves as convenient store. by the end of 2020, and Sam's Club achieved 91% off this
• Assortment of product offerings and abundant goal.
availability. • Source 100% of all bananas and pineapples from farms
that have adapted sustainable methods.
Appendix 13 sources of competitive advantage • To achieve zero wastage in the USA, UK, Japan, and
Canada by 2025.
1. Competitive advantage gained through controlling the
• To achieve 100% recyclable, reusable all industrially is
following such as organizational culture and values,
possible packaging in all Walmart’s brands by 2025.
integration and other business strategies, timely
Walmart’s private brand suppliers achieved this goal by
decisions made, capacity utilization and long run
55%.
returns to scale, learning curve analysis and utilizing
the interrelationships. Appendix 16 competitive potential for alliances
2. competitive advantage is gained through product
differentiation as well. since Walmart offers generic Joint ventures and acquisitions - Walmart has entered into
products Walmart continuously introduce new joint ventures mainly on their E commerce and video
products and substitutes for their own products to streaming sectors do to the better resources owned by the
hold the customers attention. other partners. however, Walmart operates their retail
3. Operational efficiencies. segment as a sole service provider, however it is
recommended to rethink their acquisition strategy and
Appendix 14 Business, functional strategy enter into strategic alliances that would create more value
and economical scale. (MGM partnership, acquisition of

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Flipkart India, acquisition of Bare Necessities and corner

shop.

Non equity and equity strategic alliances

as analyzed in a previous section Walmart does not have

many strategic alliances unknown liquid iniquity basis, due
to the availability of funds Walmart acquires the major sake
of all the entities possible, which can be sometimes a
disadvantage when a market is facing a paradigm shift. (e.g.
partnership with U.S. Department of veteran affairs,
Appendix 19. Financial Analysis
partnership with Advance Auto Parts, partnership with
PayPal, partnership with IBM, partnership with kidbox etc.) Walmart key financial data 2016-2020 for Fiscal Years
ending 31 January
Appendix 17 Customer relationship management
Years 2016 2017 2018 2019 2020
• Higher brand loyalty and recognition among the repeat Revenu
482,1 485,8 500,3 514,4 523,9
customers. e$
30 73 43 05 64
millions
• Core brand value “service to the customer” to prioritize
Cost of 363,5 364,8 376,7 388,3 397,6
the customers.
Sales 26 91 58 76 89
• focusing on superior customer service and a good
Gross
corporate culture to serve people and save money. 24.60 24.90 24.70 24.50 24.10
profit
• Addressing the increasing health concerns, rather than % % % % %
margin
being dismissive buying setting food health and safety Operati
goals such as investing U.S. dollars 25 million to advance ng
food safety in China or five years. expens
20.30 21.20 21.50 21.00 20.90
es as a
% % % % %
% of
Appendix 18 position of competitors internationally net
sales
Walmart's biggest competitor at the moment is the
Operati
omnichannel retailers operating discount departments, ng
retail and wholesale groceries, drug stores, variety and 24,10 22,76 20,43 21,95 20,56
income
specialist stores, supermarkets and hypermarkets, 5 4 7 7 8
$
supercenter stores, E commerce retailers, direct sellers who millions
deliver organic foods and other supplies to the customer. Dividen
ds
Tesco PLC - number one competitor of Walmart east Tesco declare
PLC who has a strong presence in Europe and Asia. With the d per 1.960 2.000 2.040 2.080 2.120
number of sales recorded and the employees and the commo
availability of schools worldwide Facebook can be Tesco can n share
be categorized as the third player in the market, with the $
higher potential to grow and challenge Walmart. Tesco Total
199,5 198,8 204,5 219,2 236,4
office prices similar to Walmart but however higher than assets $
81 25 22 95 95
Walmart's offerings. millions
Long
Carrefour SA – Carrefour SA is the first biggest tracked and term 44,03 42,01 36,82 50,20 64,19
arrival that is available in the market that could challenge debt $ 0 8 5 3 2
Walmart's position. Carrefour SA past 12,011 hundred retail millions
outlets which is exceeding the number of outlets Walmart Revenu
currently operates and is spread across more than 13 e
`- 0.78% 2.98% 2.81% 1.86%
countries. the entity is not at a price war with Walmart since increas
e
the prices are higher than Walmart's offerings, but however
COS
the product portfolio is quite similar to Walmart therefore
increas - 0.38% 3.25% 3.08% 2.40%
the threat of substitutes is higher.
e

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Debt to 22.06 21.13 18.01 22.89 27.14 • DPS has increased over the periods to fairly compensate
Assets % % % % % the stakeholders.
• Please capital expenditure between the years 2019 end
2020 due to the expansion of E commerce, technology,
Appendix 20 Financial Highlights
supply chain, and other expenses.3
• Revenue has increased at the decreasing rate, further
reductions in revenue is expected do you do the
economic downturns, end the COVID-19 pandemic.
• cost of sales has reduced however prediction to the costs
is uncertain due to the volatile conditions in the market.
• overall reductions in the operating profit ratios.
• The total assets to total debt ratio have increased due to
the increased level of gearing and the value of total
assets plummeting.
• overall gross profit levels have reduced.

3
all the above information were extracted from the
case study provided for this assignment (Walmart
Inc 2020)

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Works Cited
IDL. (2020). Financial Statements .

Macrotrends. (2020). Retrieved from https://www.macrotrends.net/countries/CHN/china/inflation-

rate-
cpi#:~:text=China%20inflation%20rate%20for%202019,a%200.56%25%20increase%20from%20
2015.

Statistica. (2020). Retrieved from https://www.statista.com/statistics/278698/annual-per-capita-

income-of-households-in-china/

Works Cited
Figure 1 Walmart global presence. Source https://www.slideshare.net/tasuu/walmart-84227508 3
Figure 2 Hypermarkets, and supermarket share11
Figure 3 Convenient Stores and Gas stations .. 11
Figure 4 NPD 1 Herbiza. Source Figure 5 NPD 2. Ascot Pink Gin. Source 17