Walmart External and Internal Audit
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[pic 1]Joseph RayaKara BowmanBrian MittelstadtBesart BeluliManagement 415 – Professor Palmer – November 11, 2015 – Case StudyTable of Contents:Executive SummaryIntroductionIssuesExternal AuditInternal AuditStrategic AlternativesRecommendationsImplementationReview & EvaluationAppendicesExecutive Summary:Wal-Mart is the biggest retailer in U.S. and also one of the biggest multinational companies in the world. It is well-known for its low-cost structure and has been doing very well despite of the current market instability. However, it still faces threats from competitors in the retail industry and has weaknesses to be improved in the future. To help Wal-Mart achieve greater success and sustain its competency, this paper will cover an all-rounded and detailed business analysis on Wal-Mart and the industry it is currently in. The analysis will touch on different perspectives, such as Wal-Mart’s strength, opportunities, weaknesses and threats. Moreover, a brief overview of the retail industry and Wal-Mart’s history are provided to facilitate a deeper and better understanding of the analysis on Wal-Mart. To help Wal-Mart better exploit its strength and opportunities and reduce threats and weaknesses, recommendations are provided for each of the four sections. I hope the recommendations will be carefully considered for proper implementation. Introduction:        Beginning with a simple idea of selling more for less in a single discount store, has grown into the biggest retailer in the world.  Today, almost some 260 million customers visit the more than 11,500 stores in 28 countries under 65 different banners and an online presence in 11 countries each week.  With the 2015 fiscal year pressing net sales of $482. 2 billion, Walmart employs roughly 2. 2 million associates worldwide touching 1. 4 million employees in the Unites states alone.  In the pages to come we will be bringing to your attention numerous key indicators of why Walmart is the supercenter goliath it is today and how it plans to maintain its stronghold at the top.  Walmart is famous for its everyday low cost structure.  Poised on the idea of offering goods at lower prices to customers so they can live better.  Thus, Walmart offers goods with high qualities at lower prices than the competition.  Walmart has a comparative advantage from other retailers.  How can Walmart achieve its low cost structure? The answer lies in its supply chain.  Walmart firmly holds its ground on the policy to suppliers that “on basic products that don’t change, the price Walmart will pay, and will charge shoppers must drop year after year. “ (Fisher 68) Issues:·      Numerous Walmart stores lack cleanliness and tidiness.  – This is a large issue that has to be handled because while some may not care the public at large has concern to shop at a dirty store.  Why would a person want to fresh produce or meats from the butcher shop when there is dirt and dust all over?  Immediately my mind runs to the idea that the item I am purchasing is tainted even if it’s sealed.  I’d prefer not to be present in that store buying anything I am going to be ingesting.  In today’s society being clean is an upmost importance due to the number of sickness and diseases out there not only for when you’re buying food but just being present in the store you could catch something.  This will deter the sick, elderly, anyone pregnant which all could make or break the net profit at the end of the fiscal year.
·      Stores aren’t restocking shelves fast enough – now many may not see this as a threat but when you have an item with an expiration date it is imperative to get it onto the shelf in the eyes of the customer.  The longer it sits in the back room the less time it can sit on the shelf.  In this case, time is money in tune to the fact that when the expiration dates come around are you going to be throwing that item away or are you going to be selling it to make a profit or taking a loss?·      Store layout and design compromises customer convenience and space. – for the average shopper when you go to the store the majority of the time you are there for specific items you need to purchase.  Yet for many once in the store they may purchase an extra box of crackers they see tantalizing or one may pick up an extra gallon of juice that they like but can’t find anywhere else.  By creating a store layout that strategically forces the customer to see the whole store you increase the amount you can sell in a single transaction.  Stew Leonard’s adopted this idea to make the store a maze forcing the customer to travel through every department to get to the registers. ·      Walmart needs to integrate businesses that drive traffic to the store.  – things that can promote profits in the stores are businesses such as gas stations, pharmacies, and check cashing.  One wouldn’t have a need to travel much farther than its local Walmart to get everything done at one time.  On a Friday they can cash their paycheck, get groceries for the week as well as any other necessities, get their medicine from the pharmacy and then on the way out fill their cars gas tank.  This cuts down on time wasted for the customer as well as increasing the amount of time a customer stays in Walmart hopefully promoting the number of items one buys.  External Audit:Opportunities:Changing financial lifestyle for consumers- It is no doubt that Walmart has given many opportunities to their consumers.  We see this simply with their everyday low prices.  Such low prices give consumers the opportunity to buy products more suitable for their financial lifestyle.  Sure, most people are already aware of their discount pricing and so it may be thought that their “regular” customers are the basis of their success. However, with times as tough as they currently are, more and more people are converting to doing their shopping at the discount store.  We can see this everywhere.  Of course, if there is no Supercenter in the customers’ town, the consumer will have to buy their meats and produce in their local grocery store.  It used to be that consumers would prefer the ease and convenience of one-stop-shopping and complete their grocery list at that grocery store.  Nowadays, however, customers are looking to save wherever possible, and are willing to make the extra trip to their nearest Walmart to save a few extra dollars- therefore, changing their consumers’ lifestyles financially.  Understanding this concept, Walmart has received a rating of 4 with a weighted score 0.8.  Emerging consumer markets- Walmart has so far been incredibly successful in taking their stores globally, with retail operations in 28 different countries including the United States.  This allows us to rate Walmart a 4, giving it a weighted score of 0.4.  As of September 30, 2015 there were a total of 11,526 Walmart retail units accounted for with 6,256 found internationally- that is more than the amount reported domestically (