Create an analysis report examining and discussing the company's long-term strategies and decision-making process. In your analysis report:
• Identify the company's long-term objectives and goals.
• Evaluate the direction the company is going in, in terms of its products and market strategies.
• Identification of risk measurements and strategies of risk minimization to anticipate uncertainty.
• Describe the company's long-term objectives on profitability, competitive activities, and technological and market leadership, as well as its social and environmental responsibilities.
• Identify the process by which the company identifies and raises funds for capital investments. Describe the cost structures of these funds from both internal and external sources.
Here are some ideas I have, trying to put them in the appropriate format for my paper.
1. Retail dominance. Think market share over immediate profits. This strongly suggest a long term strategy rather than satisfying shareholders immediately. Early strategy was reinvestment in growth rather than shareholder dividends.
2. Synthesis of retailing strategies - this is way beyond name recognition. It is to reshape the nature of retail economics. They have brought "economies of scale" to an entirely new definition. Groceries are examples because they are low profit industries. The super center idea is to cash in on economies of scale so as to a) make groceries profitable by consistently increasing size and b) bringing it together with other retail objects (like home and garden, electronics) all under the same roof.
3.. Here are the issues in that chapter and that which follows: Buying power means that Walmart can set the standard. It is NOT manufacturing, but retail, where the power lies. Walmart's contracts with suppliers are a matter of life and death for the manufacturers, not Walmart. This is the main idea.
4. Rapid consolidation. This gave capital gains immediately to investors.
5. The real corporate credo here is customer service. The "family friendly" idea is important and lays out what retail should be. This is the basic long term strategy.
6. The warehouse format is central to the retail idea here.
7. Lean Retailing. You must deal with that, since it brings together all the variables you are dealing with. This means that IT was brought in to the stores to parallel sales numbers with immediate orders to suppliers. This means that nothing is ordered for the store that has not already been sold. Each sale is sent to the main IT center that then orders that single replacement for the shelves. There is no overstocking, since trends as to who is buying what are always being fed into the system. It is immensely complex, but successful. For a competitor to follow that would be forced to spend a fortune to get this on line. More than anything else, this kind of "in time" ordering has been the core of the market strategy and profitability in low profit areas like groceries.
8. Government involvement is well known here. Walmart is seen as a victory for local politicians. This means that localities and counties have been offering subsidies (like tax breaks) to bring Walmart in. it creates jobs and a large amount of tax revenue over time. It is worth some spending to attract them to cash in later. Walmart knows this and uses it to their advantage.
9. From the Kneer book: This is the basic concept - retail dominance, international expansion and bringing new areas into the retail world (like auto service and hair care).
10. Long standing relationship with suppliers. Don't discount Walmart's power over them, but still, their overall strategy has been to cultivate long term relationships that are based on trust and mutual advantage. This has been key over time.
11. Kneer makes a central statement in section 5.1: the main competitive advantage here (and hence the heart of the long term strategy) is the "in time" system I have already described. This cannot be stressed enough in your paper.
12. Financing is easy: Walmart is a safe haven for equity investors. All portfolios (or so it seems) have some Walmart stock in it. So now, the big issue is bonds. Walmart is pushing tons of its paper. Its returning on the level of T-bills for the most part. Again, WalMart bonds are as safe as its equity. Its stability and easy return will keep both mechanisms raising cash for it. Not to mention that WalMart, as of 2012, could raise its own capital internally if it wants.