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Critical Success Factors And Business Model Of Walmart

1. Introduction:

Walmart is an American based retail organisation that serves in a multinational market. In the year 1962 the organisation was founded by Sam Walton in Bentonville, Arkansas. The organisation operates different areas such as grocery stores, hypermarket chain and discount department stores. Hence, within a number of decades the organisation enables to expand the number of stores in 28 different countries. The organisation is the most profitable retailer in the entire United States. However its business in Germany and South Korea was failed but it earned huge success from China, UK and South America. In the year 2016 a number of corruption cases are identified in the context of the organisational practice however the popularity of the company remain same in the international market (Walmartstores.com, 2018).

Therefore, in this report business model canvas of the organisation is going to be framed for the identification of different components responsible for the popularity and fluent expansion along with sustainability of the business. SWOT analysis of the component of building block model is going to be performed to recognise the critical success factor of the company along with its existing risk. In order to give more favourable environment recommendation in the context of the company is going to be provided to accomplish the study.

2.2.1 Description of Walmart business model canvas:

Key partners

  • A number of top class brand of the world selling grocery products and other kitchen equipments along with different household goods are they key partners
discount department stores. Hence, within a number of decades the organisation enables to expand the number of stores in 28 different countries. The organisation is the most profitable retailer in the entire United States. However its business in Germany and South Korea was failed but it earned huge success from China, UK and South America. In the year 2016 a number of corruption cases are identified in the context of the organisational practice however the popularity of the company remain same in the international market (Walmartstores.com, 2018).

Therefore, in this report business model canvas of the organisation is going to be framed for the identification of different components responsible for the popularity and fluent expansion along with sustainability of the business. SWOT analysis of the component of building block model is going to be performed to recognise the critical success factor of the company along with its existing risk. In order to give more favourable environment recommendation in the context of the company is going to be provided to accomplish the study.

2.2.1 Description of Walmart business model canvas:

Key partners

  • A number of top class brand of the world selling grocery products and other kitchen equipments along with different household goods are they key partners

Key Activities

  • It conducts retail activities through grocery stores, hypermarket chain and discount department stores
  • It has logistics to send the ordered goods to the address of the customer

Value Proposition

  • A number of branded grocery and other products increased the popularity of the organisation.
  • A huge numbers of retail stores are present in different part of the world that help to grow the value in front of the customers

Relationships

  1. Good relationship is maintained with the suppliers and workers
  2. Customer relationship maintenance of the organisation is quite potential

Customer segment

  • Customers belong from different demographical area and as per their culture necessity of the products differs.
  • The organisation has its customer in China, South America, UK that reflects the economically fluent countries are the most loyal customers of the company

Key Resources

  • Sustainable investment
  • Dynamic logistics
  • Variety in stocks of the product sold by the organisation
  • Media for marketing

Channels

  1. A number of retail shop in different part of the world are the traditional mode of business channel
  2. At present utilisation of internet and websites uplift the potentiality to reach the customers

Cost structure

  •  Cost effective service provider
  • Discount provision and different offers increases the popularity and number of customers

Revenue streams

  • The organisation has a strong revenue stream that reflects in the year 2018 the revenue was US$500.34 billion.
           

Table 1: Nine Building Blocks model of Walmart America

(Source: Walmartstores.com, 2018)

2.2 Key relationship of the Nine Building Blocks for business model canvas:

From the identification of the building blocks it has been found that the backbone of the organisational practice is the key partner who supports to conduct key activities to increase the demand of the organisation in the international market. Different areas of the business are considered by the organisation and it helps to regulate the objectives of the company to meet the goal. On the other hand relationship with the stakeholders is the reason of long term business of the company in the international market (Massa, Tucci & Afuah, 2016). Hence, relationship between these three components reflects the reason of the viability of the company in the business. On the other hand resource and channel of the company are very much effective and evolved as per the change of the market demand. The segmentation of the customers has observed in different demographical area which is the reason of regulation of key activity to remain functional in a suitable way. Cost structure of the company depends of the entire activities and customers. Demand of the customers helps to take decision of an organisation to perform its key activities (Fritscher & Pigneur, 2015).  Hence interaction between the channels and the customers makes the activity viable that formulate a strong relationship in the structure of the model. Revenue stream depends on the other eight components of the model. In the canvas a number of positive and favourable practices are identified that reflects the scope of increasing the number of sales. Hence it affects on the revenue that shows a growth every year.

2.3 SWOT analysis of the nine building blocks:

Walmart has a number of strength those are responsible for its outstanding growth and sustainability in the international market however the company is unable to expand their business in the developing area that is a weakness to grab the market of middle or low economy group of customers (Taran et al. 2015). It can also be a threat for the company to lose the popularity among the developing economy that can secure the future of the company. On the other hand relationship build up is an opportunity of the organisation that will allow grabbing the customers generation after generation to maintain the viable practice of the business (Luft et al. 2016). Logistic service of the company to deliver the products to the customer increase the opportunity to increase more purchase due to on time delivery of the goods without wasting time. In the international market economic condition differs however lack of observation in the activity of the factors is another weakness of the company. Though it is major revenue generating retail firm in US but the chance is there to evolve new organisations with innovative feature to win the satisfactory level of the customers by dealing with the retail products (Pedersen & Netter, 2015).

3. Critical Success factors:

The critical success factors of the company are

  • International expansion
  • Partnership with the reputed brands of products
  • Dealing with the grocery stores, hypermarket chain and discount department stores.
  • Long term business reputation
  • Dynamic logistic to conduct on time delivery
  • Discounts and offers on the products during festival and sessions
  • Demographical customer regulation to spread the brand value in the market
  • Financial stability to accomplish sustainable supply of the demand
  • Relationship maintenance through social media or digital media

4. Down side risk:

 As per the critical success factors a number of risk factors are also present in the context of the company. These are

  • Lack of intention to enter into the market of developing countries
  • Corruption in the business practice such as murder, kidnapping, shooting and stabbing in the year 2016 has been notified as a typical backdrop. It can harm the reputation of the company to the loyal customer for the reason of spreading social violence.

5. Suggested improvement on the business model:

Hence in order to improve the backdrops of the organisation Walmart a number of recommendations are provided below

Legal policies can be implemented by the organisation to reduce any kind of corruption that can harm the reputation of the company.

Research on the demand of the goods and affordability can allow the organisation to enter their business in the market to beat the competition of the existing retail practice.

The organisation needs to monitor their business and evaluate the activity each and every day to restrict any sorts of fall in order to keep secure the profitability in the competition.

6. Conclusion:

It can be concluded that Walmart has a strong business structure which is favourable for the sustainable revenue generation for the company from a long time. The partners and activities all together enhance the business environment in order to fulfil the future goal. From the SWOT analysis of the building block model of the company it has been identified that the components of a business canvas is very much suitable for the company and its regulation process increase the popularity of the company in the market. however a number of issues are identified and some recommendations are illustrated to improve the lacking to provide a sustainable practice for the organisation.