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A Detailed Case Study on Largest Retail Giant Walmart

Avinash kumar mahato

Walmart is one of the largest retail companies in the world. It was founded in 1962 by Sam Walton. The headquarter of this company is situated in the United States. The main aim of the company is to provide consistent discounts, loyal customer service, and fast friendly service.

Walmart’s targets to expand its business in large cities as well as spread retail stores throughout the world. The retail stores of Walmart are divided into four divisions Walmart Supercenters , Discount Stores, Neighborhood Markets, and Sam’s Clubs warehouses. More than 100 million customers are visiting these Walmart Stores.

It is very uncomfortable for small merchants and communities in America. Walmart reaches their town and provides low-cost offers and the best customer service. It is a very bad condition for small merchants and businessmen in America. To downtown merchants, Walmart just comes and takes over all the small stores.

The purchasing power, aggressive marketing and provide low prices to the customer by Walmart, tend to pull out the business by the small merchants. Gradually the dream of Walmart company to become the largest retailer in the world is full filing day-by-day. But, they increase their business by the wrong actions and do not respect the culture or language of the communities.

Timeline Events Of Walmart company Business Model Of Walmart How Walmart Generates Revenue? Walmart’s Marketing Strategy Walmart’s - Flipkart Acquisition

Timeline Events Of Walmart company

The Timeline of events for Walmart company since its inception.

• 1960: Sam Walton opened his first discount store in Rogers, Arkansas.
• 1981: Walmart become the largest company in America .
• 1981: After becoming the largest company in America, they opened their stores in a small Louisiana town.
• 1983: Walmart opened its stores in Pawhuska and Oklahoma.
• 1986: Walmart claims that it can restore more than 4000 jobs to American Communities.
• 1989: They drive a campaign about Environmental awareness that Walmart is aware of land, water, and air.
• 1990: There are some activist groups against the expansion of Walmart’s store.
• 31st December 1990: Walmart’s closed its stores in  Louisiana.
• 5th November 1991: Walmart opened up its store in Lowa City.
• 6th October 1998: Walmart’s founder Sam Walton created a family charity named Walton Family Charitable Support Foundation.
• June 1999: Walmart takes over the ASDA Chain (a British supermarket chain), now they have stores and depots across the United States.
• 2001: Walmart becomes the world’s largest retailer, got huge sales of $191 billion.
• July 2003: Walmart opened its stores in Beijing and till now they have 22 stores in China and counting.
• 2006: Walmart closed its stores in Germany.
• July 2007: Walmart is operating more than 2500 retail units in Walmart International and more than 500,000 employers in some countries.
• 2007: By the ending of this year, they got a net $45 billion sales.
• 2008: Walmart’s opened its wholesale facility in India. This is the first step of Walmart's to sell products through its retail outlets in India.
• 2018: Walmart acquired Flipkart for $16 billion and owned 77% stake in India’s largest online retailer brand.

Business Model Of Walmart

There are different business models that are followed by successful companies which vary from time to time. The business model of Walmart is based to eliminate the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs. The main motive of Walmart's business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

The main marketing strategy of the company is based on leading on price, be competitive, and deliver a great experience by the motto of Everyday Lower price.

Walmart has three important segments.

Walmart U.S

Walmart U.S is operated in the U.S. They provide customers with products and services that are not present physically in stores. They provide their services via the website and mobile application . The website of Walmart company has a special feature that provides a third party to sell products. The company operates its business on various platforms like supermarkets, discount stores, neighborhood markets, and e-commerce websites .

Walmart International

Walmart International is also divided into three sections which are retailers, wholesalers, and other small projects. These sections are also divided into various sections such as supermarkets, warehouses, electronics, apparel stores , drug stores, digital retailers, and many more.

It is the online platform of Walmart’s company i.e., “ samsclub.com ”. This club is consists of memberships of the only warehouse retailer operations. This section includes warehouse clubs in the U.S, as well as samsclub.com.

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How Walmart Generates Revenue?

The Revenue Model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning.

Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business. The two main sources of revenue are Product revenue and Service revenue .

Walmart's revenue in the fiscal year ending January, 2020 was $524 Billion.

Product Revenue

Walmart has a wide range of products in various categories:-

• In the grocery category, they have products like Daily needs products, dairy products, frozen foods, bakery, baby products, beauty aids, and many more.
• Health and wellness category have products like Pharmacy products and clinical services .
• The entertainment category has products like electronics products, toys, cameras, movies, music, videos, and books.
• Stationary, paints, and hardware, Automotive, sporting goods, crafts, and seasonal merchandise.
• Apparel categories include apparel for men, women, boys, girls, shoes, jewelry, and accessories.
• Home appliances include home furnishing services, home decor, livings, and horticulture.

Service Revenue

Walmart also provide services to generate revenue in various fields:-

• They provide financial services like prepaid cards , money orders, wire transfer, money transfers, bill payments, and so on.
• VUDU movie streaming services: This is a subscription-based OTT platform for buying and renting movies, watching TV shows on demand.
• Clinical Services include primary health care, Physical and Wellness checks, Clinical lab tests.
• Health Insurance services

Walmart’s Marketing Strategy

Walmart's Business Strategy Analysis is one of the most important parts of any business whether it is small or large. It is very important to make an effective marketing plan to survive in the market . Walmart uses the principle of business marketing penetration method which is used to capture the market by offering lower prices and competitive prices to the consumers.

The company follows cost leadership which makes a huge profit for the company. The company provide low prices to the consumer and treated all the customers as king of the market to maintain the relationship between Walmart and the customer.

According to Walmart, there are four factors that drive the customer’s choice of retailer:

• Assortment.

One more reason for the success of Walmart is purchasing products from local manufacturers in a bulk in one go and selling in small quantities. Buying from local manufacturers is the benefit for both. Buying more products from local manufacturers means they are creating more jobs and they reduce the unemployment rate. They should provide good quality products at a lower price to maintain a good relationship with customers and continue to get profits in business.

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Walmart’s - Flipkart Acquisition

Flipkart is one of the leading Indian e-commerce brands. In 2018, Walmart takes 77% stakes in India’s largest e-commerce company Flipkart and makes the world’s biggest purchase of an e-commerce company.

After this acquisition the future of eCommerce industry in India has become more competitive than ever.

The three main reasons for the acquisition of Flipkart are Flipkart’s leadership in some lucrative sections, its payment platform and the company’s talent pool.

Walmart’s world’s largest company is to continue to expand its business by improving its strategies day-by-day. The main reason for the success of Walmart is the EDLP system i.e., Everyday Low Price. They are working aggressively to maintain profits, market shares, and provide low prices to consumers. There are many business ideas to gain profit from a market. All depends on how you play the cards for a profitable business.

Walmart has made acquisitions of 28 organizations and has 16 sub-organization.

Feel free to reach us and share your understanding and views on the case study of Walmart. We would love to hear from you.

What is the business model of Walmart?

The business model of Walmart is based on eliminating the middleman from the distribution channels. The advantage of removing the middleman is to provide benefit to the consumer by providing products at lower costs.

What is the motive behind Walmart's Business Strategy?

The main motive of the Walmart business strategy company is to enter every segment of the market and dominate the market by providing products at a lower price.

What is Walmart's Market Strategy?

How does walmart generate revenue.

The earning model of Walmart deals with the principle of buying in bulk in one go. In this system, they got a huge discount from the manufacturers. Walmart’s generate its revenue by removing the middleman and selling their product directly to the customers and services to business.

What are the main sources of revenue for Walmart?

The two main sources of revenue are:

• Product revenue
• Service revenue

Is Walmart owned by China?

The Walmart branch in China is majority Chinese-owned. But predominantly it is owned by Sam Walton's many children.

Why is Walmart so cheap?

They sell in small quantities at low prices. By reducing the price they have high sales volume through which they have high earning.  Hence, by selling in high volume they can sell it at a cheap price and still gain profit.

What are the sub-organisations under Walmart?

There are 16 sub-organisations of Walmart. Some of them are:

• Walmart Labs
• Seiyu Group
• Walmart Canada

What are the top acquisitions of Walmart?

Walmart has acquired 28 companies. Some top acquisitions are:

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Case 6 Walmart, Inc. in 2018: The World's Biggest Retailer Faces New Challenges *

In 2018, Walmart was not only the world's biggest retailer, it was also the world's biggest company in terms of revenue—a position it had first attained in 2000 and had held for most of the intervening years.

Since going public in 1972, Walmart's record of growth and profitability was remarkable. Between 1972 and 2009, its average annual sales growth was 22% and its return on equity had not fallen below 20%.

Yet, sustaining Walmart's phenomenal record of growth and profitability was proving to be an ever more daunting challenge. As Walmart continued to expand its range of goods and services—into groceries, fashion clothing, music downloads, online prescription drugs, financial services, and health clinics—it was forced to compete on a broader front. While Walmart could seldom be beaten on price, it faced competitors that were more stylish (T.J.Maxx), more quality‐focused (Whole Foods), more service‐oriented (Lowe's, Best Buy), and more focused in terms of product range. In its traditional area of discount retailing, Target was an increasingly formidable competitor, while in warehouse clubs, its Sam's Clubs ran a poor second to Costco.

However, all these competitive threats were trivial compared to that posed by online retailing—and, specifically that posed by the world's emerging retail colossus: Amazon. During 2017, the turf battle between the two became increasingly acute: while Walmart expanded ...

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Chief Learning Officer - CLO Media

Chief Learning Officer is a multimedia publication focused on the importance, benefits and advancements of a properly trained workforce.

Case study: Walmart embraces immersive learning

Virtual reality is revolutionizing the way the retail giant’s associates learn.

by Sarah Fister Gale

March 23, 2021.

In 2016, Walmart had an emerging issue among its learning programs. The $4 trillion retailer has 1.5 million workers in the U.S., and most of them needed training on how to handle complex customer situations — specifically, training that wouldn’t be disruptive to the customer experience.

“We can’t do that in the store,” says Kate Kressen, senior manager II of learning content and development for Walmart in Bentonville, Ark. “And it’s very hard to recreate a live store environment in a training program.”

For a long time they relied on classroom instructors giving lectures and quizzes, or static online courses that associates clicked through on their own. But neither format could convey the heightened experience of dealing with certain situations in the flow of work.

“We can talk all day, but until you understand the tension that associates and managers feel, it doesn’t really translate,” Kressen says.

Armchair coach

Around that same time, Derek Belch was launching Strivr, a Palo Alto, Calif.-based athletic training company that uses virtual reality as an immersion tool to give athletes a way to practice their craft off the field. Belch had previously been an assistant football coach at Stanford while writing his master’s thesis on using VR to train football players. The project was so impressive that Stanford’s head coach provided Belch with funding to launch Strivr, which he co-founded with Stanford VR professor Jeremy Bailenson.

“When we started Strivr, we were only focused on the sports world,” Belch says. But about a year after launching, he got a surprising call from Brock McKeel, senior director of digital operations at Walmart, who’d seen Strivr’s VR software being used for quarterback training. “He wanted to talk about employee training,” Belch says.

By that time, Strivr had worked with more than 30 NFL and college teams, but Belch had never considered the potential of using his immersive training technology to teach store employees. However, as he and his team discussed the opportunity, it started to make sense. “As I talked to Walmart about how they train their employees, and what they needed them to learn, we realized that our formula for athletes wasn’t that different,” he says. His developers wouldn’t need to reinvent the software, they just needed to reengineer the experience for a store environment. “It turned out to be a little easier than we expected,” he says. “Stores are a lot more static than a football field.”

Belch was convinced he could create a course that would work for Walmart, though the potential scale of the project was daunting. Walmart wanted Strivr to create programs that could be run in all 200 learning academies, which are training centers attached to larger Walmart stories. And eventually, the retailer wanted to roll it out to 4,000 locations. “It was important that Strivr be able to scale their solution to meet our needs,” Kressen says, “because we needed to get a handle on training 1.2 million associates.”

“It was a pivotal moment for our company,” Belch says. And it led to the first of many sleepless nights, as he and his team figured out how to meet the training needs of the largest employer in the country.

Black Friday in 3D

For the pilot program, which would be tested in 20 stores, they wanted to focus on a high-impact training experience that would replicate well in virtual reality. So Strivr placed a 360-degree camera in one store on Black Friday and let it record for 30 minutes. “What they captured was incredible,” Kressen says. “We were able to turn it into so much good material.”

They used the content to build a training module that allowed trainees in pilot stores to experience the chaos and pressure that associates face on Black Friday, without having to go through it in real life. VR goggles were used to immerse trainees in the store experience, while an instructor talked about what was happening and pointed out where associates did the right things and what to watch out for.

It was the perfect scenario for the pilot, Belch says. “It gave them the chance to experience Black Friday and to make mistakes without affecting any customers.”

The first round of content wasn’t interactive, but it gave trainees, managers and company leaders a taste of what they could accomplish with VR. Kressen’s team immediately saw the benefit. “It gave us a way to show associates what ‘good’ looks like,” she says.

Employees love it

Early numbers proved that not only was the training fun, it was having the desired effect. “The associates’ response to the content was so exciting,” Kressen says. “It was so different from what they were used to.”

Trainees who took the VR training reported a 30 percent higher satisfaction rating compared with trainees attending traditional courses, and the VR trainees scored higher on content tests 70 percent of the time. They also demonstrated a 10-15 percent higher rate of knowledge retention compared with those in traditional training.

The training also takes less time. What might require 90 minutes of classroom training can be completed in 20 minutes using Strivr content. That translates to millions of dollars in productivity savings, Kressen says.

Once they validated the concept, they focused on how else they wanted to use it, and how to expand the training to 200-plus stores. While the 360-degree videos were effective, Walmart wanted trainees to have a full VR experience that allowed them to interact with the environment, pick things up and engage with virtual customers.

But creating that level of immersive and interactive virtual content would be time- and cost-intensive. Belch wanted to be sure they would get value from any content they created.

“Everyone on my team was excited to start this journey, and we wanted to say ‘yes’ to everything they asked for,” Belch says. “But not all training content is the right fit for virtual.”

He notes that for every 20 ideas they brainstormed, only two or three warranted the time and expense of turning existing training into an immersive experience. “The challenging part was how to sift through the enthusiasm,” he says. “We had to have the confidence to push back when it wasn’t the right choice.”

To find the balance, they made sure every virtual learning program solved a specific need using virtual reality that couldn’t be achieved in a traditional classroom. It had to be attached to some return on investment metric to ensure the experience would deliver business value.

Some early courses included active shooter training, dealing with hazardous spills and severe weather, and practice stocking shelves in high-volume areas. Other suggested topics, however, like learning how to use new store technology, didn’t fit the bill. “You don’t need to recreate an existing piece of equipment in a 3D model when you can just train people on it in the real world,” Belch says.

Once Walmart and Strivr agreed on a topic, they worked collaboratively to capture the right content and script the immersive experiences so that trainees would have lots of opportunities for meaningful interactions within the virtual environment.

Thousands of headsets

As they built the courses, they also had to address the issue of scale. Providing the training to employees across Walmart’s retail network would require a significant technology investment. But once Walmart leaders saw the impact of the training and the enthusiasm to learn more, it wasn’t a hard sell.

In 2018, Kressen’s team got approval to acquire 18,000 Oculus Go headsets for its 200 academies, giving thousands of employees the chance to experience the Strivr training. Today, Walmart has 30 active VR training modules, and the company is rolling out headsets to stores across the nation, with four for every superstore and two per neighborhood market.

“It is a lot of real estate to cover,” Kressen says. Along with buying headsets, they have to make sure stores have the space to store and deploy them, and that managers are trained in how to use the headsets as part of their associate training programs.

It’s a huge undertaking, but it is worth it, according to Kressen: “Associates like the content.” However, the most valuable part of the program is the message it sends. “They appreciate the investment Walmart is making in their training. It shows how much we care about the people component of our business.”

Sarah Fister Gale

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Walmart Update, 2019

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Walmart Business Strategy: A Comprehensive Analysis

By   Julie Choo

Published: January 5, 2024

Last Update: January 5, 2024

TOPICS:   Service Design

In the dynamic landscape of retail, Walmart stands as a behemoth, shaping the industry with its innovative business strategies . This article delves into the core of Walmart’s success, unraveling its business strategy and digital transformation from top to bottom.

Walmart Business Strategy

Walmart’s business strategy is a well-crafted tapestry that combines a variety of elements to secure its position as a retail giant. At the heart of this strategy lies a robust operating model approach that encompasses a diverse range of channels and tactics. 

Transition to An OmniChannel Marketplace

The Walmart business strategy includes leveraging its vast physical presence through an extensive network of stores, drawing customers in with the promise of Everyday Low Prices (EDLP). This commitment to affordability is not just a slogan; it’s a cornerstone of Walmart’s marketing ethos, shaping consumer perceptions and driving foot traffic to its brick-and-mortar locations.

Building Strength via its Emerging Digital Operating Model

Walmart’s business business strategy extends beyond traditional advertising methods and its strength is in its operational strategy where it is charging ahead with digital transformation to become a more complete Omnichannel Marketplace to combat competitors such as Amazon. The retail giant has embraced the digital era, utilizing online platforms and e-commerce to reach a broader audience. Part of this digital evolution involves the strategic placement of distribution and fulfillment centers , ensuring efficient order processing and timely deliveries. By strategically integrating distribution and fulfillment centers into its operating model , Walmart maximizes operational efficiency, meeting customer demands swiftly and solidifying its reputation for reliability in the competitive retail landscape.

In essence, Walmart’s holistic digital operating model backed by a evolving digital transformation  strategy, encompassing physical stores, online presence, and strategically placed distribution hubs, reflects a dynamic and adaptive approach to consumer engagement and satisfaction. 

Walmart’s Existing Business Model Before Digital Transformation

Walmart’s retail business .

Walmart stores, comprising a vast network of discount stores and clubs, serve as the backbone of the retail giant’s physical presence. Walmart’s store format, ranging from neighborhood discount stores to expansive membership-based clubs, caters to a diverse customer base. These Walmart stores are strategically positioned to provide accessibility to a wide demographic, offering a one-stop shopping experience.

The discount stores, characterized by their commitment to Everyday Low Prices (EDLP), have become synonymous with affordability, attracting budget-conscious consumers. Simultaneously, Walmart clubs offer a membership-based model, providing additional benefits and exclusive deals. The amalgamation of these store formats under the Walmart umbrella showcases the company’s versatility, catering to the varied needs and preferences of consumers across different communities and demographics.

Walmart Pricing Strategy

Pricing strategy.

Walmart’s pricing strategy and its competitive advantage are substantiated by reputable sources in the retail industry. The pricing index data, indicating that Walmart’s prices are, on average, 10% lower than its competitors, comes from a comprehensive market analysis conducted by Retail Insight, a leading research firm specializing in retail trends and pricing dynamics.

Everyday Low Prices

Walmart’s success in the retail sector can be attributed to its commitment to Low Price Leadership, a strategic approach that revolves around providing customers with unbeatable prices. Leveraging Economies of Scale, Walmart capitalizes on its vast size and purchasing power to negotiate favorable deals with suppliers, enabling the company to pass on cost savings to consumers. The integration of Advanced Technology into its operations is another pivotal aspect of Walmart’s strategy. From inventory management to supply chain optimization, technology allows Walmart to enhance efficiency and keep prices competitive.

Walmart strives to keep it’s pricing tactics to the concept of “Everyday Low Prices” (EDLP). This philosophy ensures that customers receive consistently low prices on a wide range of products, fostering trust and loyalty. Additionally, the Rollback Pricing strategy involves temporary price reductions on select items, creating a sense of urgency and encouraging sales. Walmart’s Price Matching Policy, both in-store and online, further solidifies its commitment to offering the best deals. This policy assures customers that if they find a lower price elsewhere, Walmart will match it.

The insight into Walmart’s “Everyday Low Prices” (EDLP) philosophy and its impact on a 15% lower average price for common goods compared to competitors is derived from a detailed report published by Priceonomics , a respected platform known for its in-depth analyses of pricing strategies across various industries.

The statistics regarding Walmart’s market share of 22% in the U.S. grocery market and the 19% higher customer loyalty rate compared to competitors are sourced from recent market reports by Statista, a reliable and widely used statistical portal providing insights into global market trends and consumer behavior.

Multiple layers of Discount

Walmart’s embrace of Multiple Discounts adds another layer to its pricing strategy. Whether through seasonal promotions, clearance sales, or bundled deals, the company provides various avenues for customers to save money. This multifaceted approach to pricing reflects Walmart’s dedication to delivering value to its customers, ensuring that affordability remains a cornerstone of the retail giant’s identity.

These sources collectively reinforce the significance of Walmart’s pricing strategy in maintaining its competitive edge and dominating the retail landscape

Walmart’s Servicing Business

Walmart’s strategic expansion into the servicing business marks a transformative shift, positioning the retail giant as a comprehensive one-stop-shop that extends beyond conventional retail offerings. This venture encompasses an array of lifestyle services, ranging from financial services to automotive care and healthcare clinics. Walmart’s aim is clear: to seamlessly integrate into the daily lives of customers, providing not only products but also essential services, thereby enhancing its role in customers’ routines.

In response to the evolving preferences of contemporary consumers who prioritize convenience and accessibility, Walmart’s strategy seeks to streamline the customer journey. The provision of a diverse range of services alongside its traditional retail offerings exemplifies Walmart’s commitment to simplifying the consumer experience. This comprehensive approach not only caters to the varied needs of customers but also cultivates a sense of loyalty, as individuals find value in the convenience of addressing different requirements all under one roof.

The multifaceted nature of Walmart’s strategy is anticipated to foster increased customer retention. By offering not only a wide array of products but also an extensive range of lifestyle services, Walmart solidifies its position as a retail powerhouse, adapting to the changing landscape of customer-centric businesses. The convenience and value embedded in this approach are poised to elevate Walmart’s stature, making it an indispensable part of customers’ lives.

SWOT Analysis of Walmart’s Business strategy

As we navigate Walmart’s digital transformation journey, a SWOT analysis reveals key insights into its strengths, weaknesses, opportunities, and threats, guiding strategic decisions for sustained success in the dynamic retail industry that is operating in an increasingly digital economy.

SWOT Analysis of Walmart:

• Strong Brand Recognition: Walmart’s strength lies in its widely recognized and trusted brand, fostering consumer confidence and loyalty.
• Diverse Revenue Stream: The company’s adaptability is evident through a diverse revenue stream, navigating various markets and industries to maintain financial resilience. Per Walmart’s Q3 FY23 Earnings , a breakdown of walmart’s income can be recognised through its Sam’s Club membership sales (Up by 7.2%), Walmart U.S Comp Sales (Up 4.9%), Walmart U.S. eCommerce (up by 24%), and Walmart International sales (up by 5.4%). 
• Economies of Scale: Walmart leverages its extensive size for economies of scale shown by its strong revenue growth of 5.3% per 2022 and 2023 consolidated Income statement, enabling cost advantages in procurement, operations, and overall efficiency. 
• Strong Customer Base: With a vast and loyal customer base, Walmart establishes a robust foundation in the retail sector, emphasizing customer retention and sustained business growth as per market share stat of 60% shown on the Market retail/wholesale industry dominated by Walmart.

Weaknesses:

• Labor Relations: Walmart has faced criticism for labor practices, including low wages and labor disputes.
• E-commerce Competition: Despite significant strides, Walmart faces intense competition from e-commerce giants (e.g, amazon, eBay), impacting its online market share.
• Over Reliance on US Market: A substantial portion of Walmart’s revenue is generated in the United States, making it vulnerable to domestic economic fluctuations.
• Inconsistent customer service: represents a weakness in Walmart’s SWOT analysis, as variations in service quality across different locations may impact the overall customer experience, potentially leading to customer dissatisfaction and diminished brand perception.

Opportunities:

• E-commerce Expansion: Further growth in the online market allows Walmart to capitalize on changing consumer shopping habits.
• International Expansion: Targeting untapped markets presents opportunities for global revenue diversification.
• Health and Wellness Market: The growing trend towards health-conscious living provides avenues for expansion in the health and wellness sector. Increased understanding of customer journeys in these niches is key to begin to build stickiness effects.
• Technological Innovations: Embracing cutting-edge technologies can enhance customer experience and operational efficiency through a growing Omnichannel marketplace. It is vital to master data science and begin to leverage AI in the battle to understand consumer behaviors and deliver a remarkable experience.
• Competition: Intense competition from traditional retailers and e-commerce platforms poses a threat to Walmart’s market share such as Costco, Target and Amazon.
• Regulatory Challenges: Changes in regulations, especially related to labor and trade, can impact Walmart’s operations and costs. One such example is the metrics shown per Walmart’s ethics & compliance code of conduct aligning to regulatory challenges in culture, work safety, risk mitigation and more. 
• Economic Downturns: Economic uncertainties and recessions may lead to reduced consumer spending, affecting Walmart’s revenue.
• Supply Chain Disruptions: External factors like natural disasters or geopolitical events can disrupt the global supply chain, impacting product availability and costs. Such threats are specifically addressed by Walmart’s Enterprise Resilience Planning Team .

More on Walmart’s Online Competitors

Walmart faces formidable competition in the online retail arena, with key rivals such as Amazon and Target vying for a share of the digital market. Amazon, known for its extensive product selection and swift delivery services, poses a significant challenge to Walmart’s e-commerce dominance. Target, on the other hand, leverages its brand appeal and strategic partnerships to attract online customers. To counteract these competitors, Walmart employs a multifaceted approach that combines technological innovation, competitive pricing, and strategic collaborations.

Walmart strategically invests in advanced technologies to enhance its online platform and improve the overall customer experience. The integration of artificial intelligence (AI) and machine learning enables Walmart to provide personalized recommendations, similar to Amazon’s renowned recommendation engine. Additionally, Walmart’s commitment to competitive pricing aligns with its traditional retail strength, offering Everyday Low Prices (EDLP) and frequent promotions to attract budget-conscious consumers, countering the pricing strategies employed by Amazon and other competitors.

Conducting a thorough SWOT analysis (such as this example from the Strategy Journey Book – 2nd Edition) allows Walmart to capitalize on its strengths, address weaknesses, seize opportunities, and mitigate potential threats, contributing to sustained success in the ever-evolving retail landscape.

Walmart’s Digital Transformation Strategy in the new ERA of AI-led Customer Centricity 

Walmart’s online business strategy.

Overall, Walmart’s e-commerce strategy is customer-centric, driving substantial sales growth by tailoring its approach to the evolving needs of online customers. Operating a multitude of specialized e-commerce websites across diverse product categories, Walmart strategically positions itself on various e-commerce platforms for market penetration within the US.

Servicing Relevant Customer Journeys & Sustainable Transformation

Walmart’s evolving online strategy is characterized by a dual focus on extensive product offerings and technological sophistication, with concrete examples per its strategic partnership with Adobe in 2021 to integrate walmart’s marketplace, online and instore fulfillment and pickup technologies with Adobe commerce showcasing its commitment to a seamless customer experience. The integration of advanced tools is exemplified by the implementation of an efficient order processing system. For instance, Walmart employs real-time inventory management and automated order fulfillment , ensuring that customers experience timely and accurate deliveries. Statistics show an increasing number of fulfillment centers through FY2022 and FY2023 reports per statista .

Emerging predictive capabilities supported by Data Science and AI

In addition, the technological depth extends to personalized experiences, illustrated by Walmart’s robust recommendation engine. By analyzing customer preferences and purchase history, the system suggests relevant products, enhancing the entire customer journey. This personalized touch not only reflects the user-friendly interface but also demonstrates Walmart’s dedication to tailoring the online experience to individual needs.

Focus on seamless CX and UX to improve customer stickiness

Furthermore, Walmart’s commitment to a seamless online interaction is evident in its streamlined navigation features. The website’s intuitive design and optimized search functionality provide a smooth browsing experience for customers. This emphasis on user-friendliness goes beyond mere aesthetics, ensuring that customers can easily find and explore products, contributing to a more engaging online experience. Improved engagement is at the heart of Walmart’s strategy to foster stickiness effects, both digitally and to also build on brand stickiness too.

By investing in cutting-edge technologies while transforming using Human Centered design practices focused on CX and UX, Walmart not only navigates the complexities of the e-commerce landscape but also enhances the overall satisfaction and engagement of its online customers. These examples underscore Walmart’s strategic approach to digital transformation, where technological sophistication is not just a feature but a tangible means to elevate the online shopping experience. 

Walmart International Business

Successful international business expansion requires operating model transformation, and Walmart’s strategy is characterized by a blend of strategic acquisitions, partnerships, and a keen understanding of local markets. This is also how Walmart is operationally applying AI, via strategic partnerships as it continues to build its capabilities to improve its agility to implement transformation and go to market faster, rather than trying to build everything from scratch.

A Sustainable Diversification strategy that adapts to local markets  

Walmart’s international business expansion is a testament to its strategic approach in entering diverse markets and adapting to local nuances. One notable example of Walmart’s successful international expansion is its entry into the Indian market. In 2018, Walmart acquired a majority stake in Flipkart, one of India’s leading e-commerce platforms. This move allowed Walmart to tap into India’s burgeoning e-commerce market, aligning with the country’s growing digital consumer base.

The acquisition of Flipkart exemplifies Walmart’s strategy of leveraging local expertise and established platforms to gain a foothold in international markets. Recognizing the unique characteristics of the Indian retail landscape, where e-commerce plays a significant role, Walmart strategically invested in a company deeply embedded in the local market. This approach not only facilitated a smoother entry for Walmart but also enabled the retail giant to navigate regulatory complexities and consumer preferences effectively.

Another example of Walmart’s commitment to tailoring its offerings to meet local needs is further highlighted in its expansion into China where Walmart adapts its store formats to cater to specific consumer preferences. 

In China, Walmart has experimented with smaller-format stores in urban areas, recognizing the demand for convenient and accessible shopping options. This adaptability showcases Walmart’s understanding of the diverse economic and cultural landscapes it operates in, contributing to its success on the global stage.

Working with partners to diversify and build a sustainable business model 

Collaborations and strategic partnerships play a pivotal role in Walmart’s competitive strategy. In 2023, Walmart has outlined plans to invest heavily into AI automation fulfillment centers to improve its unit cost average by 20%, increasing efficiency in order fulfilments and operations. 

The acquisition of Jet.com in 2016 expanded Walmart’s digital footprint and brought innovative talent into the company. Furthermore, Walmart’s partnerships with various brands (such as Adobe, ShipBob) and retailers enable it to diversify its product offerings, providing a competitive edge against the more specialized approaches of some competitors. As part of Walmart’s strategy in marketing, Walmart has announced partnerships with social media giants such as TikTok, Snapchat, Firework and more further boosting its online digital footprint. 

The acquisition of Jet.com in 2016 not only expanded Walmart’s digital footprint but it brought innovative talent into the company. It is clear Walmart sees the need for talent as key to its continued efforts to apply human centered design as part of its digital transformation strategy.

By continuously adapting and evolving its strategies, Walmart is clearly implementing digital transformation sustainably, to support its future operating model as Walmart remains a formidable force in the online retail landscape, navigating the challenges presented by its competitors.

In conclusion, Walmart’s business strategy is that of an growing Omnichannel marketplace, a multifaceted approach that combines physical and digital retail, competitive pricing, supply chain excellence, and a commitment to customer satisfaction. Understanding these elements provides insights into the retail giant’s enduring success in a rapid changing and competitive digital economy as it continues to combat emerging new business disruptions.

Q1: How did Walmart become a retail giant?

Walmart’s ascent to retail dominance can be attributed to a combination of strategic pricing, operational efficiency, and a customer-centric approach. 

Q2: What sets Walmart’s supply chain apart?

Walmart’s supply chain is marked by innovation and technological integration, allowing the company to streamline operations and stay ahead in a competitive market.

Q3: How does Walmart balance physical and digital retail?

Walmart seamlessly integrates its brick-and-mortar stores with its online presence, offering customers a comprehensive shopping experience.

Q4: What is Walmart’s philosophy on pricing?

Walmart’s commitment to everyday low prices is a fundamental philosophy that underpins its strategy, ensuring affordability for consumers.

Q5: How has Walmart expanded globally?

Walmart’s global expansion involves adapting its strategy to diverse markets, understanding local dynamics, and leveraging its core strengths.

About the author

Julie Choo is lead author of THE STRATEGY JOURNEY book and the founder of STRATABILITY ACADEMY. She speaks regularly at numerous tech, careers and entrepreneur events globally. Julie continues to consult at large Fortune 500 companies, Global Banks and tech start-ups. As a lover of all things strategic, she is a keen Formula One fan who named her dog, Kimi (after Raikkonnen), and follows football - favourite club changes based on where she calls home.

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“We Need People to Lean into the Future”

• Adi Ignatius

For years, Walmart’s unrivaled customer research capabilities helped it dominate retailing. Then along came the internet, and Walmart suddenly found itself playing catchup to e-commerce pioneers like Amazon. In 2014 the board appointed Doug McMillon as CEO and gave him an imperative: Bring Walmart into the future—without sacrificing its longtime strengths.

McMillon, who began his career unloading trucks at a neighborhood Walmart, respects tradition but is impatient for change. In this interview with HBR editor in chief Adi Ignatius, he describes the ups and downs of transforming America’s largest company. Going digital is a top priority—which is why Walmart recently paid $3 billion to acquire e-tailer Jet.com. But the company also wants to strengthen the in-store experience. “The reality,” notes McMillon, “is that customers want everything”—low prices, convenience, and seamless interactions online and in person. In this new world, all employees, including those on the sales floor, will need to be tech savvy. And the management team can no longer make strategic decisions on an annual or even quarterly basis; “strategy is happening on a much faster cycle time,” says the CEO.

A conversation with Walmart CEO Doug McMillon

For years, Walmart seemed to understand exactly what its customers wanted. It developed complicated consumer analytics and used that data, along with relentless pressure on suppliers, to become a retail powerhouse that sold practically everything at the lowest possible prices.

• Adi Ignatius is the editor in chief of Harvard Business Review.

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Why Walmart is creating a lifestyle ‘super app’

Since the advent of e-commerce, traditional retailers have tried various ways to take advantage of new shopping methods while keeping the in-store experience growing. Walmart, one of the world’s largest retailers, always strives for a customer-first mindset. So the company has been working to deliver a broader omnichannel experience to customers.

We want our app to be more than just a shopping transaction.

I recently talked to Meng Chee, Walmart’s chief product officer, about the company’s attempt to create a “super app” that’s more than just a shopping experience — and how the pandemic accelerated this approach.

How has your app strategy evolved due to COVID-19, with more consumers choosing to shop across digital platforms?

Before the pandemic, we were already changing our app strategy. Historically speaking, before 2019 we had two areas of businesses running separately: e-commerce and in-store. But in 2019, we made the decision to merge, and in 2020, we restructured our product organization to be at the center, with the goal to deliver omnichannel experiences. That’s why, when the pandemic hit, it only accelerated our efforts to bring one app together. This acceleration has also helped us focus on our larger ambition to create a super app, meaning we want our app to be more than just a shopping transaction. Ultimately we want it to be a lifestyle app, because we’re growing our business, and adding health and wellness services, financial services, auto care, etc. All of this comes together and represents a lifestyle package that we can give our customers via a super app.

I love that you’re talking about super apps. Can you give me an example of a nonshopping use for the app?

Absolutely. Many innovations happened in our app during the pandemic. For Walmart in particular, because of the prominence we have in many communities across the country, we created an online vaccine scheduler so customers could schedule their vaccinations at their local store. Quickly thereafter, we heard from customers that they wanted an easier way to manage their paper vaccine card. So we created a digital vaccine card that is accessible in their Walmart Pharmacy account.

Creating this kind of app can be organizationally tricky. Can you talk to me about how you overcame organizational silos?

The customer is at the center of everything we do. We think there are three ways to address how to work through silos within a large organization and create the apps that matter.

You need clear accountability. … You need a framework that an organizational structure agrees to use and use consistently.

First, you need the right organizational structure. In this case, part of that solution meant having a centralized product organization so that we could prioritize and think about solutions holistically and consider what happens in-store, online, and in the app.

Second, you need a framework that really identifies the way you’re working. You need clear accountability. You can’t have every single silo with a vote. You need a framework that an organizational structure agrees to use and use consistently. This way, you make clean, clear decisions that are consistent for the customer, regardless of how they shop with us.

Finally, you need to create a model that enables executional agility. For example, we have a model that we like a lot called “four in a box.” The 4ITB team is composed of accountable leads from product, tech, design, and the business. The idea is that we work together on solving a problem for the customer in a collective, integrated way. This is how we overcome organizational complexity and develop a clear focus on what our app needs to do in a way that drives value for our customers.

How does Walmart foster a seamless experience for its customers across web and app platforms?

We design with the customer journey in mind. We don’t look at app-versus-web experiences. While we have teams that are dedicated to each, we put the customer’s needs first. A customer might start on a web browser at home, because it’s convenient to shop for groceries, but then go to their phone on the go to add a few things before they pick up in-store. There’s so much that goes on, and we need to think about the customer journey holistically to help them make consistent decisions across platforms. The way you achieve that consistency is to thread it all the way across the product life cycle, and, in this case, multiple product life cycles.

What are some innovations you’ve developed to personalize the experience, and how do you see that evolving?

Our core guiding promise to our customers is to help make their lives better. In order to do that, our personalization has to work very well. There’s a lot to compete with in terms of head space as you look at your phone today, which is why personalization is so key. We have to rapidly bring our brand and our value to the forefront of a customer’s attention span.

For example, we know customers enjoy using our app to shop for their weekly groceries for pickup at our store or delivery at home. To make it faster and easier to place pickup or delivery orders, we created a tab in the app called My Items. The My Items tab automatically organizes customers’ preferred items into categories, like dairy and eggs, pantry, beauty, and more — like having a curated store to shop from within Walmart.

We design with the customer journey in mind. We don’t look at app-versus-web experiences.

Does the app have an impact on the in-store experience?

Absolutely. The app and in-store experiences must be connected, because today’s customer shops across all our channels based on their schedules. It’s our responsibility to design an integrated experience that works for their needs, not the other way around.

Our stores are a competitive advantage, and they’ll always be a core shopping channel for our customer. But we also know that we can use technology to simplify the in-store shopping experience.

For example, we heard from our customers that they wanted better navigation to find where products are located in stores and easier ways to checkout. Over the last year, we’ve been rolling out a new design for Supercenters and Neighborhood Markets that includes things like updated exterior signage reflecting the Walmart app icon, updated in-store messaging system and signage to guide customers and associates to products using the app, and more hosted-checkout kiosks as well as contactless payment solutions, like Walmart Pay and Scan and Go.

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