Strategic Marketing

MKTM028

Student Name: Mohamed Fahad Rahim

Student ID: 20417768

Lecturer: Shazly Oowise

Word Count: 3522

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Table of Contents
Introduction..............................................................................................................................................................5
Macro Analysis........................................................................................................................................................5
Political................................................................................................................................................................5
Economical..........................................................................................................................................................5
Environmental......................................................................................................................................................5
Socio-cultural.......................................................................................................................................................6
Technological.......................................................................................................................................................6
Micro analysis..........................................................................................................................................................6
Threat of new entrants (low)................................................................................................................................6
Bargaining power of suppliers (low – moderate)................................................................................................7
Bargaining Power of buyers (low).......................................................................................................................7
Threat of substitute products or services (low)....................................................................................................7
Rivalry among existing firms (high)....................................................................................................................7
Internal analysis.......................................................................................................................................................8
Strategy review....................................................................................................................................................8
Productivity review (BCG Matrix)..................................................................................................................8
Cash cows........................................................................................................................................................8
Stars.................................................................................................................................................................8
Question mark.................................................................................................................................................8
Dogs.................................................................................................................................................................9
Functions review (Marketing Mix)......................................................................................................................9
Product.............................................................................................................................................................9
Price.................................................................................................................................................................9
Place................................................................................................................................................................9
Promotion........................................................................................................................................................9
People............................................................................................................................................................10
Process...........................................................................................................................................................10
Physical evidence..........................................................................................................................................10
TOWS matrix.........................................................................................................................................................10
Key strategic challenges.........................................................................................................................................11
Conclusion..............................................................................................................................................................12
References..............................................................................................................................................................12
Appendix 1: Company Overview......................................................................................................................14
Appendix 2: Supporting Macro model/frameworks..........................................................................................16
Appendix 3: supporting Micro model/frameworks...........................................................................................17
Appendix 4: Supporting internal model/frameworks........................................................................................18

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 Abstract

This report highlights the marketing audit and how important the information can be to
Walmart in finding out their market threats and opportunities. This report's first chapter
focuses on the PEEST factors affecting Walmart and how they overcome those obstacles.
Further to the audit, Porters’ Five forces are explained to calculate the position and
competitive strength of Walmart. Then an internal analysis is conducted focusing on the
strategic, productivity and functions review of Walmart. Finally, a TOWS matrix to match
and identify strategies to assist Walmart followed by recommendations.

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Introduction

The marketing audit is an analysis where steps are taken on all aspects that impact
organization’s marketing strength and performance (Al Fahad et al., 2015). This audit is
accountable for gathering data on current market trends, performance, opportunities and
threats, then analyse and evaluate these information to make the right marketing decision.

Macro Analysis  

Political
Political environment focuses on the conditions that impact marketing strategies due to law as
well as regulation changes (Ho, 2014).The government adjusts trade policies, including tax
and restrictions that impact trade among the United States where they import their goods
from. This impacts Walmart since they maintain small profit margins to keep prices low.
Walmart recently launched a program aimed at placing more locally produced food in their
stores. Secondly the higher wage rates. Increasing the profit margins on few products won’t
allow Walmart to give higher wages. To solve this, Walmart reduced their employees and
went automation. For example, reducing the number of cashiers and replacing with self-
service machines (Picchi, 2019). Finally, food safety regulations. Ignoring to comply with
these regulation can result in loss of markets, consumer demand and litigation. To prevent
this, Walmart requires their suppliers to get a food safety assessments annually (Walmart,
2017).

Economical
This includes details about disposable income and trends that impact Walmart. For example,
an economic crisis has an influence on Walmart and their revenue due to high levels of
unemployment. Therefore, customers will be looking for affordable priced products. Walmart
recognised the financial impacts on the consumers' disposable income and adopted a pricing
strategy to counter this challenges which results in increased market share.

Environmental
The impact of natural disasters due to climate change, would affect Walmart's operations and
financial results. These incidents may result in partial destruction of their properties.
Collective action to reduce greenhouse gas pollution is a step taken by Walmart to minimize
the impacts of climate change. Launched in 2017 by Walmart, Project Gigaton includes
vendors in establishing goals and implementing carbon reduction strategies in each of six
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sectors: electricity usage, renewable production, pollution, and deforestation, packaging and
material usage.

Socio-cultural
Under this section follows the various cultures and values. Over the last decade, market
trends have experienced a significant change. The millennial generation as well as senior
citizens shop frequently online. To keep up, Walmart developed ecommerce websites like
walmart.com and acquired jet.com which support through services like "Walmart Pickup,"
"Pickup Today", "Grocery Pickup” (Walmart, 2019). Employee wellbeing is another factor.
Not treating employ will result in tarnished brand name. Walmart provides medical plans and
consultation to their employees and dependants. They also work with health care
organizations to organize programs to communicate best practises to their employees. Also,
Walmart (2020) states, to support in the COVID-19 pandemic situation, they put plans where
employees can stay at home while being paid for 2 weeks if they aren’t feeling well. If they
have been tested positive, Walmart will pay up to 26 weeks for their employees.

Technological
This discusses the technology changes in product and processes of Walmart. Recently
Walmart incorporated Radio Frequency Identification technologies to their vendor
operations. This would eliminate bar codes, prevent fraud and reduce costs when compared to
barcode scanners. Another step taken by Walmart to match the current trend in the market
would be online shopping so stay competitive.

Micro analysis 

Threat of new entrants (low).

The pressure exerted by new entrants is low since Walmart enjoys economies of scale.
Another factor would be the capital required by the sector. Since capital requirements are
high, it’s difficult for new entrants to compete. Research and Development tend to incur
heavy expenses, therefore new entrants will be discouraged to compete. Walmart can block
the threat of new entrants by emphasizing on innovation to differentiate their goods from the
new entrants. To create good brand awareness, Walmart should invest on marketing, thereby
helping them to keep their customers.

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Bargaining power of suppliers (low – moderate)

The number of vendors in the food retail industry is large. Due to the large amount vendors,
their bargaining power over prices are less making it a weak force to Walmart. The product
delivered by those suppliers is fairly identical, resulting in low switching costs. This makes is
easy for Walmart to switch suppliers

Bargaining Power of buyers (low)

The product variation within the sector is high. To reduce the high pressure of product
variation, Walmart can focus on innovation and sustainable packaging which attracts more
customers.
In this industry, Walmart looks at customers with low income levels which is a majority in
the United States. This results in a need to purchase at low rates, which makes consumers
price sensitive. But Walmart already took these issues into consideration by offering very low
prices.

Threat of substitute products or services (low)

The threat imposed on Walmart for substitute products is at its minimum due to their pricing
strategy. With many retailers offering similar products, not many are priced as low as
Walmart. Furthermore, Wal-Mart offers tremendous customer service like Walmart Pickup,
exclusive to their value chain. This is to enhance the shopping experience at Walmart and
promote customer goodwill.

Rivalry among existing firms (high)

Rivalry among emerging players is high. In this industry, customers can purchase any
product from any competitor since the switching cost is low. As a result, a price war emerges
(Shabbir, 2016). Walmart does get the advantage, however, that is because of their pricing
strategy and customer service. Although Amazon and Costco are strong contenders, Kroger,
Target, Best Buy do not pose a significant competition to Walmart. To stay competitive,
Walmart’s main focus should be to attract new customers and penetrate new market
segments.

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Internal analysis

 
Strategy review

Walmart’s access and domination to the majority of the United States consumers helps them
to lower costs on a continuing basis (Mujtaba, 2007). By economies of scale, Wal-Mart
utilized this to take over the demand for a wide variety of consumer goods (Stankevičiūtė et
al, 2012). The concept behind this is the “everyday low prices” strategy. The main idea
behind this strategy is selling large quantities of products for a cheap price. Walmart’s
strategic actions include the implementation of systems and technologies that assist in
lowering internal costs and economies of scale.

Productivity review (BCG Matrix)

Cash cows
Taking Walmart into consideration, Sam’s club segment is their cash cow. Sam’s club is a
membership only warehouse in America is owned by Walmart. Customers are attracted
mostly because of the affordable membership fees and cash rewards. Looking at the sales
growth of Sam's Club, it has been increasing for the past three years making it evident that
Sam’s club is generating profits (O'Connell, 2020).

Stars
This category focusses on the segment with the highest market share and market growth.
Walmart supercentres fall into this category becuase they target majority of the United States
population and with the product range and wide distribution centres which makes them the
market leaders in the industry. Having the highest market share in this industry, it is evident
that Walmart needs to concentrate on their main strategy to hold this position
Question mark
This focuses on brands which need consideration far more closely. They have small market
share in rapidly growing markets. Walmart (2019) said they intended to concentrate on their
ecommerce website as they continue to see opportunities in that market segment.

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Dogs
This segment indicates products in low growth markets as well as having a low market share.
Walmart introduced their express concept to focus on specific consumers. This concept is a
mix between dollar store and a small grocery stores. Since these stores did not generate
adequate profits to function, they shut down their stores and focused on their ecommerce
segment (Picchi, 2016).

Functions review (Marketing Mix)

Product
Walmart’s main product is their retail service, including services through e-commerce.
Walmart offers a full selection of food commodities as well (Anitsal et al, 2012). Considering
the role of services in this sector, the product factor draws consumers through the delivery of
affordable, reliable and efficient services.

Price
Walmart has been concentrating on cheaper prices since its early days to capture market share
and improve its competitive edge. Over time, Walmart has built a broad and multinational
supply chain that helped hold its costs and lower than any other retail competitor. Under the
price concept, Walmart gives the lowest rates every day and customers are assured that the
costs do not shift.

Place
The United States is Walmart's main market with the highest number of outlets compared to
all other countries. Besides its physical stores, Walmart also services its consumers via
online. Walmart is building an Omni channel network to best support its consumers and to
expand the number of distribution networks (Walmart Annual report, 2019).
Promotion
Throughout all seasons, Walmart runs many promotions and discounts. Since they focus on
low prices, they use slogans like “save money, live better” and “everyday low prices”
(Walmart Annual report, 2019).
The platforms used by Walmart for advertising are social media and other traditional media.
They constantly use social media to promote and engage consumers. Stores do not only act as
distribution channels but also as advertising platforms from which Walmart shows its goods

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and tells consumers of new arrivals and wide range of products they might wish to purchase.
Walmart also utilizes their e-commerce application as well as website for sales and
discounts. 

People
In the last few years, Walmart has drastically improved its culture and human resource
processes. From increasing hourly pay, Walmart also launched many perks to retain their
employees. Walmart is naming employees their “associates”. Walmart is a people-focused
company, and investing in their employees is a key goal. They launched new learning
centres, specialized training projects for their employees, focusing on creating tomorrow's
leaders. Walmart's starting salaries are currently fifty percent greater when compared to
earlier years.

Process
The main goal and strategy of Walmart is to satisfy their customers with low prices. Walmart
has technology designed to ensure that products are available in their stores so vendors will
inform when their stock rates are low. Walmart supplies them with items to replenish their
stock, when buying their exports. This means goods are available to consumers when
required. For consumer satisfaction, Walmart provides fast billing service and support staff.
To understand the needs of their customers, Walmart should constantly involve in
researching market opportunities, understanding consumer wants through feedback that can
be obtained from their stores, on helpline or on social media.

Physical evidence
Labelled packaging and products and public infrastructure, often counts as physical evidence.
Walmart markets their items in unique, easily recognizable colour labelling on store shelves.
Walmart also has distribution facilities and serves consumers in different parts of the United
States under fifty eight different banners.

TOWS matrix

A SWOT analysis identifies the strengths, weaknesses, opportunities and threats for an
organization, but doesn’t show the connection between those categories. Whereas the TOWS

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matrix matches and identifies strategies to assist the organization (Ravanavar and
Charantimath, 2012).

Strengths Weaknesses

 excellent customer service  Main Focus on price

 Strategy to expand sensitive customers
 Low price strategy  Expansion is very
 good supply chain costly
management  High employee
  Strong community turnover
involvement
 Strong brand name
 Economies of scale

Opportunity  Use social media for marketing  Focusing more on

 Low bargaining power of
suppliers.
 Increasing online sales.
 EDLP strategy
 technology development
 Elderly population growing
 Improvement in human
resource  areas
Threats
 Taxes on goods
 High competition
 Market leader
sustainability
 political and cultural
challenges
 changing consumer tastes
 increased wage rates
and to attract customer towards
its website
 Walmart can retain their
customer loyalty because of
their pricing strategy during an
economic crisis
 Emerging small-stores (S) to
increase market share in urban
 Using the online platform for
sales and marketing
 Use a strong distribution
network to reach out to
customers and fight off new
entrants into the market
 Due to the EDLP strategy
competition isn’t a substantial
threat
 Product differentiation to
attract more customers
 Involving employees and
getting feedback to better
understand their taste
online sales to reduce
fixed cost
 Reducing the no. of
staff and replacing with
machines
 more benefits for
employees depending
on the growth of Wal-
Mart
 focus on new product
line and advertising to
stay competitive
 focus on locally
produced food to avoid
risks in price
increments due to taxes

Table 1. TOWS Matrix. Source (Author, 2020)

Key strategic challenges

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One of main challenges for Walmart is the change in consumer buying habits. Recent trends
have shown that most purchases are happening online. To tackle this challenge, Walmart can
combine both online and offline shopping experience to reduce their fixed cost and also
improve customer experience. Another challenge would be the low profit margins. Since
Walmart focuses on a low price strategy, shifts in prices in supply chain can affect them.
Walmart can implement a strategy to hire a logistics company to make the deliveries rather
than having their own. Exchange rates can highly influence Walmart. Since most of their
products are imported, shifts in exchange rates can cost Walmart. Walmart should focus on
domestic production to reduce risk and safeguard their strategy. Finally, since the competition
in the industry is high, Walmart can focus mainly on attracting new customers by having a
seamless experience where stores are more appealing and differentiating their products to
stand out from their competitors.

Conclusion
Strategic management is a process which tells if Walmart is going to survive in the long run
or not. With proper internal factors and partially controlled external factors which will result
in sustainability and catapult their performance. The main success of Walmart is their pricing
strategy which is resulted from effective implementation. Walmart will have to protect their
supply chain information from competitors since they can replicate it. To stay competitive,
Walmart needs to make sure their investments can be benefitted in the future. Walmart
should widen their scope to attract broader demographic

References 

Al Badi, K. S. (2015) The Dimensions of Marketing Mix. Management and Organizational

Studies. 2(1), pp.136-142.
Al Fahad, A, Al Mahmud, A. R., Miah, R. and Islam, U. H. (2015) Marketing Audit: A
Systematic And
Comprehensive Marketing Examination. International journal of scientific & technology
research. 4(7), pp.215-221.

Anitsal, I., Girard, T. and Anisal, M. M. (2012) An Application Of Services Marketing Mix
Framework: How Do Retailers Communicate Information On Their Sales Receipts?.
Business Studies Journal. 4(2), pp.77-89.

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Boafo N. D., Kraa, J. J. and Webu, C. G. (2018) Porter’s Five Forces Impact On The
Performance Of Companies In The Banking Industry In Ghana. International Journal of
Economics, Commerce and Management. 6(8), pp.14-19.
Hanlon, A. (2019) How to use the BCG Matrix model. Smartinsights. [online] Available at
https://www.smartinsights.com/marketing-planning/marketing-models/use-bcg-matrix/ [Accessed
on 24th May 2020].

Ho, J. K. (2014) Formulation of a Systemic PEST Analysis for Strategic Analysis. European
Academic Research. 2(5), pp.6478-6481.

Mohajan, H. K. (2017) An Analysis on BCG Growth Sharing Matrix. Noble International

Journal of Business and Management Research. 2(1), pp.1-7.

Mujtaba, B. C. (2007) Wal-Mart In The Global Retail Market: Its Growth And Challenges.
Journal of Business Case Studies. 3(2), pp.1-8.

Mujtaba, B. G. and Maxwell, S. (2007) Wal-Mart In The Global Retail Market: Its Growth
And Challenges. Journal of Business Case Studies – Second Quarter 2007, 3(2), pp.01-04.

O'Connell, L. (2020) Comparable sales growth of Sam's Club in the United States from fiscal
year 2006 to 2020*. Statistica. [online] Available at
https://www.statista.com/statistics/269413/sales-growth-of-sams-club-in-the-united-states/
[Accessed on 17th May 2020].

Picchi, A. (2016) Why Walmart Express hit a dead end. CBS News. [online] Available at
https://www.cbsnews.com/news/why-walmart-express-hit-a-dead-end/ [Accessed on 15th
May 2020].

Picchi, A. (2019) Walmart doubles down on robots to shift labor costs: "We're going big".
CBS News. [online] Available at https://www.cbsnews.com/news/robots-in-walmart-doubles-
down-on-robots-to-shift-labor-costs-were-going-big/ [Accessed on 17th May 2020].

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Rastogi, N. and Trivedi, M. K. (2016) pestle technique – a tool to identify external risks in
Construction projects. International Research Journal of Engineering and Technology
(IRJET). 3(1), pp.384-386.

Ravanavar, G. M. and Charantimath, P. M. (2012) strategic formulation using tows matrix – a

case study. International Journal of Research and Development. 1(1), pp.87-88.

Shabbir, J. (2016) Why Manufacturers are Less Powerful than Retailers in Trade Circles? A
Case Study of Wal-Mart Retailing Business. Journal of Global Economics. 4(1), pp.1-4.

Stankevičiūtė, E, Grunda, R. and Bartkus, E. V. (2012) Pursuing A Cost Leadership Strategy

And Business Sustainability Objectives: Walmart Case Study. Economics and Management.
17(3), pp.1200-1205.

Surbhi, S. (2020) Difference between Micro and Macro Environment. Key Differences
[Online]. Available at https://keydifferences.com/difference-between-micro-internal-and-
macro-external-environment.html [Accessed on 29th April 2020].

Walmart Inc. (2017) Food Safety Requirements for Food and Beverage Suppliers. United
States: Walmart Inc. [online] Available at
https://cdn.corporate.walmart.com/3d/b3/f30fc5f44fc58ea06cec84102c26/supplier-food-
safety-requirements-2017-v2.pdf [Accessed on 17th May 2020].

Walmart Inc. (2019) Annual Report- Defining the future of retail. United States: Walmart Inc.

Walmart Inc. (2020) New COVID-19 Policy to Support the Health of Our
Associates.Walmart. [online] Available at
https://corporate.walmart.com/newsroom/2020/03/10/new-covid-19-policy-to-support-the-
health-of-our-associates [Accessed on 17th May 2020].

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Appendix 1: Company Overview 

Walmart, Inc., originally Wal-Mart Stores, Inc., is one of America’s biggest discount retailer
chain. Walmart is headquartered in Bentonville, Arkansas (Walmart Annual report, 2019).

Wal-Mart was established by Sam Walton in Rogers in the year 1962 and concentrated on
early development in urban areas, while preventing direct rivalry with competitiors like
Amazon and Costco. As it expanded, walmart also established new retail concepts, including
Sam's Club as well as Walmart Supercenters (1988). Walmart has been one of the biggest
grocers in the United States within a decade of launching a range of grocery and retail
supercentres. In 1990, the focus on customer care cost management and efficiency of its
delivery networks enabled Wal-Mart to becoming the biggest store in the United States.

A year after, they launched a store in Mexico, and expanded to foreign markets and
proceeded to expand, either by new stores or by acquiring existing players in countries
including Canada, China, Germany as well as the United Kingdom. In 1999, walmart had
been the biggest private enterprise in the country, and listed Walmart as the biggest retailer in
the world. Walmart remained a market pioneer in the years that followed, and by 2010 they
started to buy a variety of e-commerce firms, including Jet.com (2016) and Moosejaw (2017).
The firm changed its name to Walmart in 2018.

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Appendix 2: Supporting Macro model/frameworks 

Rastogi and Trivedi (2016) says, all elements of this analysis are vital for corporate strategy
formulation and tells what an organization can do. It provides a bird's eye view of the
external environment from different perspectives. Taking Walmart into consideration, the
following are the macro factors;

Political Government policies

Higher wages
Food safety regulations
Economical unemployment in the US
Sales discount strategy to respond to economic pressure
Environmental Environmentally friendly products
Focus on reducing greenhouse gas emission
Socio-cultural Online shopping
Employee health and well-being
Pandemic situations
Technological Business automation
Vendor technology

Table 2. PEEST Analysis. Source (Author, 2020)

Appendix 3: Supporting Micro model/frameworks

Porter's Five Forces is a framework that was developed by Michael E Porter to calculate the
position and competitive strength of a firm. This theory focuses on five factors that influence
the market attractiveness and level of competitiveness (Boafo et al, 2018).

Competitive
Rivalry

Threat
Threat of Supplier
Substitution of New Power
Entry

Buyer Power

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 Figure 1. Porters 5 forces Analysis. Source (Author, 2020)

Appendix 4: Supporting internal model/frameworks

The marketing mix was developed by E. Jerome McCarthy to highlight an organization’s

position in market. This framework comprises of seven elements such as product, price,
place, promotion, people, process, physical evidence. This tool also helps firms to focus on a
specific market area. (Al Badi, 2015).

Product

Physical
Price
Evidence

Marketing
Mix 7Ps
Process Place

People Promotion

Figure 2. Marketing Mix. Source (Author, 2020)

The financial performance of Walmart can be measured through the BCG matrix. This was
developed for the Boston Consultancy Group by Bruce Doolin Henderson with the aim to
balance their products in their range so that they function effectively and efficiently says
Mohajan (2017).

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Figure 3. BCG Matrix. Source (Hanlon, 2019)

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