You will submit the last portion of your draft business development plan for your company, covering the specific opportunity assessment along with the trends and discussion on sustainability. This plan will be based on the results of Milestones One and Two in that it will consider that past forces of market change and the current capabilities and limitations of the company. This plan will align the company’s efforts to exploiting intrapreneurial opportunities as well as entrepreneurial opportunities, depending on the company’s capabilities. The plan should reflect consideration of potential future impacts on these plans such as changes in the economy, market position, technology innovation, or sociopolitical factors.
Specifically, the following critical elements must be addressed:
A. Entrepreneurial Opportunities: Develop a list of entrepreneurial opportunities outside the confines of the company you selected. Each opportunity in your list should have supporting rationale based on your market domain evaluation and PEST analysis.
B. Entrepreneurial Assessment: Select one entrepreneurial opportunity from your list to assess. How viable is the opportunity? Your response should be supported with evidence from your market domain evaluation and PEST analysis.
C. Trends: Evaluate key trends affecting the global business environment of your selected market domain. These could be geographic, political, or societal trends, or they could be trends specific to your market domain.
D. Impact on Opportunities: Determine how these trends will impact the development of your selected intrapreneurial and entrepreneurial opportunities.
E. Impact on Sustainability: Determine how these trends will affect the sustainability of your selected company. Which trends could be used to improve
sustainable business operations?
Guidelines for Submission: Your paper must be submitted as an 8-10-page APA-style Word document with double spacing, not counting the cover page and reference page. It must be in 12-point Times New Roman font, with one-inch margins and at least three authoritative sources cited in APA format.
Southern New Hampshire University
MBA 515 Bus Env Innov & Entrepreneur 20TW4
Module Seven Short Paper
Prof. Dr Thomas Joseph
Introduction: Intrapreneurial Opportunities
As giant corporation, Wal-Mart, Inc. has a lot of tools, resources and plenty of experience about what their customers wants and needs. In order to understand what kind of intrapreneur opportunities are available we must define what it is an intrapreneur and how is different than entrepreneur. An intrapreneur is an employee who is tasked with developing an innovative idea or project within a company. The intrapreneur may not face the outsized risks or reap the outsized rewards of an entrepreneur. However, the intrapreneur has access to the resources and capabilities of an established company (Investopedia. 2019)
The achievement and also the misfortunes decisions of companies rely on whether they can constantly innovate and move through the new market barrier like incorporating new technologies during production, staying active with the new social trends or if they are obeying the law and don’t try to take advantage of the customers. Companies must stay alert, creative, and open to new ideas that satisfied the needs and wants of customers. A good intrapreneur must have leadership skills and must know when and how to take some risky decision that will help the company while also perceiving when a situation is not in the best interest of the establishment.
Many CEO fail to inspire intrapreneurs to pitch their ideas and that’s when employees either change companies in order to work on their ideas or just simply create their own company. A great example is Jeff Bezos who quit his corporate job in order to create his own company and now 24 years later it the leading online store in the world (Darren Marble. 2018) Walmart SWOT analysis have shown that even though the company has gone through many difficulties, they have maintained the leading record of mega stores in the retail industry.
So, this paper main purpose is to evaluate if Walmart has used for their advantages intrapreneurial ideas from employees and suggestion from customers and have created new products that has helped the company moved forward with the constant changes. Any intrapreneurial idea is one that has helped the company save money and maintain the company motto of providing low prices always in their products. In the last few years, Walmart open their online store, free shipping for store pick up and/or free shipping after spending certain amount of money like Amazon, also grocery pick up which has increase their sale, safe customers money and increase profit but Walmart can continue to offer much more.
A great intrapreneurial opportunity for Walmart is improving their furniture department. Ikea provides good furniture at low cost that last for years. Walmart also provides furniture but sadly the quality is poor and breaks so easily that it drives their customers to go to other furniture’s stores like Ikea or Rooms to Go in look for cheap deals while obtaining good products. If Walmart would find a way to lower their cost and hired a better company to provide good furniture at a great price like their motto says it would be a life changing for the company. They also lack store show room and have most of their good furniture only online. Most people even though they have access to technology prefer to buy furniture that can try on to check if is to their liking. By reorganizing the store and increasing the showroom footage space for furniture, the amount of product that can be shown would be greater and that way more customer would continue to buy everything on the same place, providing a better convenience to their customers.
Walmart should have a clear understanding that the customers who constantly visit their stores are middle class consumers and that they are always trying to save a buck or two. This is why the new trend of buying used stuff from Facebook has become so popular. Others person trash is someone else treasure. When customers want to buy something used instead of something new that should alarm any company. This is why Walmart should improve their furniture material and make it affordable but durable. Even amazon sell better furniture and affordable.
Another type of intrapreneurial opportunity for Walmart is their website/app store. Like mention above, they have better selection of furniture online, but customers can’t feel the material and how durable the product can be and could send customers to other places like Amazon for better products and prices. Also, Walmart’s website has allowed that the website is some kind of platform for seller to sell their products. This is confusing for customers because, I personally when trying to order something from a specific store like Walmart, K-mart, Target, Best Buy, Etc. I try to buy from them and not from a seller. If I want to deal with that headache, I would go E-bay or Amazon. By having that confusion customers do not obtain always the correct product and Walmart can’t be held responsible like Amazon that warrantee the item sold or money back.
By creating a different section within the page separating items sold by Walmart and the items sold by different sellers, the customers would know in advance and not go through so much hassle trying to find the product they want that specify that is sold by Walmart. I think they also should create some type of warning notifying the customers that the product is sold by a different vendor.
In conclusion, I believe there’s many area Walmart can improve and many intrapreneurial ideas that can help the company to continue to be the leader in the retail industry. By providing an affordable furniture that last longer and that is more accessible for customer to try and select and improving also their online website and app stores removing any confusion would be a great start. Walmart should pay attention to any idea that comes from any employees since those who are ignored tend to leave the company to pursue such idea and become successful. Walmart has evolved during the years and have acquired many brands but by trying to be a better company maybe they have forgotten the main point that is what customers’ needs in-stores in order to do all of their shopping at one place.
PEST Analysis: Walmart
Prof. Dr Thomas Joseph
The increased level of regional competition has seen many business organizations exploring the international market opportunities. Even though such international market opportunities have significant benefits for the companies, there are numerous risks, which companies must deal with. Such requires strategic planning, with the management focusing on addressing the diverse challenges in the political, environmental, social-cultural, and technological landscape. Companies thus must use their strengths to explore such existing opportunities, thereby effectively dealing with the threat of competition common in such global markets. An example of such a global company is Wal-Mart, which was founded in 1962. Currently, the company has expanded its operations in the entire United States having thousands of stores not only in the US but also worldwide. The company has a major strength of a strong brand name, whereby it has been able to attract a large and culturally diverse customer base, of over 250 million customers who are loyal to its production in 28 countries (Chuang et al., 2020). Though such strength, the company majorly faces the threat of competition from other similar companies in the industry, with the major being Amazon and Costco. This provides a PEST analysis illustrating that Wal-Mart is not currently ready to compete in the competitive business environment.
The political forces play a significant impact in influencing operations. If the company seeks to expand its operations by increasing the number of e-commerce platforms and physical stores, flexible rules and regulations would ensure that its suppliers and manufacturers easily meet the set standards hence focus on increasing their efficiency in the manufacturing and supply operations. As an American based company, the rigid political structures and differences in the governance models force the company to be flexible hence be able to align itself with such structures and models, failure to which the company’s survival is threatened. The lack of such flexible in the company has been limiting its ability to open more retail units particularly in India whereby it only has 20 retail units and 439 units in china, which are far below compared to the units in US due to the unwelcoming international markets (Li-Jun et al., 2019).
Secondly, the company is affected by its market lobbying protectionist policies in the international markets. The company has a history of lobbying activities whereby Chuang et al., (2020; p.15) explain that that “the political involvement has increased in the last decade by the company seeking to influence labor legislations and corporate tax”. The company is thus significantly influenced by a culture of political spending, with the company being ranked among the top 100 political donors since 1989 to date, which would significantly influence the loyalty of customers in its customer bases (Chuang et al., 2020).
In addition, political pressure for high wages affects Wal-Mart whereby it has regularly faced the challenge of paying lower wages to its employees. Such is because its policies have seen the development of low minimum wages for its employees. Thus, the passage of the bill to raise the minimum wage of the workers to $15 per hour negatively affected the company’s profitability, failure to which its operations would be shut down (Li-Jun et al., 2019). Thus, the company must be prepared to handle such a decision coming from government-office holders, which would negatively affect its image.
Wal-Mart is majorly affected by the stability of the major economies since the company is known for producing low-priced products. Even though the company currently benefits from such stability in the major economies in the regions where it operates, a possible global or regional economic recession will likely see an increase in the production costs and which would force the company to hike its prices. With the hiking, it will likely lose its loyal customers, a situation that was evident in Costco in 2015 in its China operations whereby it significantly lost over 25% of its market share due to a slight rise in consumer prices (Baker et al., 2018). Thus, the company’s everyday low pricing strategy also known as EDLP, which is the major competitive advantage of the company, might limit the ability of the company to compete with its competitors for a long time, since it will likely suffer thinner profit margins. Considering that the company depends on global suppliers for its products, the changes in the supplier prices would adversely affect its pricing strategy, which will in turn force the company to hike its prices.
Second is the effect of the higher interest rate likely to occur in the company’s new locations. With the continued growth of many industries in developing countries, the governments in the developing countries are facilitating the formulation of fiscal policies that enable consumers to benefit from increased buying power by lowering interest rates. Such has seen many of the consumers gaining more buying power, an opportunity that the company may exploit in its expansion initiatives. Also, the company is negatively affected by the decreasing unemployment rates in the US, whereby the company may likely face the challenge of obtaining adequate labor for its manufacturing activities. With such lack of adequate labor, the company will likely be forced to outsource, which is normally expensive, thereby raised operational cost.
Lastly, the company is affected by the currency exchange rate between the USD and the major currencies in which the company seeks to expand its operations. Such had been an impact in its fourth quarter in 2015, whereby its sale in the US stores increased by 2.45 but the 9.7% decline in the international sales created an offset in the profits (Sivarajah et al., 2018). Thus, the international currency exchange fluctuations have been negatively impacting the profitability hence the revenue generated by the company
The changing social trends that have led to increased sensitivity and awareness of customers on health has seen growth in health lifestyle brands. Such is an opportunity for Wal-Mart, which necessitates the company to increase the diversity in its product offerings, focusing on products that have more health value. The company thus is being forced by the growing health-related cultural trends to increase the health value as well as food items in its stores, and such would likely create a positive brand image in the customers’ minds (Li-Jun et al., 2019). Also, the dynamism in consumer demographics has seen more Millennials engaging in online shopping. There is an increased use of social media by retail companies to create customer engagement and customer convenience through the use of social media platforms, which impact the nature of service provision in Wal-Mart that significantly depends on the physical stores.
Secondly, urban migration has significantly impacted the buying patterns of Wal-Mart consumers. Considering that there has been a transformation with more individuals migrating to urban areas, the urban migration will likely create more market opportunities for higher sells in retail products. Sivarajah et al. (2018) explained that the changes in urban lifestyle contributed to the increase in sales volume realized by Wal-Mart in the US-based physical stores by over 18% in the last three years. Thus, there has been increased consumer demand due to such urban migration with Wal-Mart finding a ready market for its products.
The third is the impact of cultural trends whereby the company is negatively affected since it is unable to flexibly adapt to the diversity in the culture in the new regions it operates. Such changes in culture influence the perspective of the customers who identify with the brands they believe to be their own, influencing their buying patterns (Chuang et al., 2020).
A major challenge that the company faces is that it is not a popular place in many of its global marketplaces. For example, in Germany, the company suffers from the threat of competition whereby Amazon’s products are highly esteemed by the Germans, which saw it loosing over 1 billion of its revenue in 2016(Baker et al., 2018). Such is because Wal-Mart is an American brand and thus Germans are more loyal to their homemade brands. Thus, the company must seek to address such a challenge by providing specific products that have a cultural appeal.
The increased automation in the retail industry has seen many global organizations creating more efficient business processes. Through the use of automation and robotics at Wal-Mart, the company has been able to reduce the wastes by minimizing the complex production processes, which previously led to increased change over and wait times. Even though the company has been unable to automate most of the operations in many geographical locations, it has few units only in 11 countries limiting the effective use of automation (Sivarajah et al., 2018).
Secondly, the increased use of big data or analytics in the manufacturing and service industry has seen a great transformation in the way the firms’ operations are being conducted. Through such increased application of business analytics, organizations have been able to carry effective market analysis and developed accurate demand forecasting models, which they are using to explore the numerous market opportunities (Galvez et al., 2018). Even though big data is applied in Wal-Mart’s e-commerce stores, the application has been a challenge at physical stores. The company is faced with challenges in sourcing operations particularly during the high supplier risk periods, compromising the profitability of the company.
The excellent use of big data has seen Amazon and Costco, among many others, reducing their operational costs that previously emanated from overproduction, creating stiff competition on their products. Even though the use of robotics has ensured that manufacturing and serviced-based operations are streamlined, the company suffers challenges of overproduction during low demand seasons, compromising its profitability.
The third factor is the increased usage of mobile devices among customers. There has been an increase in the usage of mobile devices whereby customers are making orders in the comfort of their homes using their mobile phones. The company has significantly tried to exploit such an opportunity by focusing on the e-commerce store, whereby customers order their products from the closest store using such mobile devices. Even though its efforts, its competitor Amazon has extended its online sites in most of the market segments, with its products being highly esteemed by the customers, posing a threat to Wal-Mart, which must make extra efforts to ensure that there is high customization in its ads and product offerings through its e-commerce websites.
The first priority area that the company must seek to address is its long-held culture of engaging in politics seeking to influence the development of market protectionist policies. The company’s engagement in politics will lead to a damaged brand image, in the new areas where it will expand its operations. For example, in 2015, Wal-Mart suffered a tainted brand name after it opposed the religious freedom law in the state of Arkansas. Its actions saw the company being accused of discriminating against the gays and lesbian customers. Thus, even though the company would address its policies to fit into the labor laws of the areas where it establishes its operations by raising the minimum wage, the impact of involvement in politics would continue harming the customers’ loyalty. Such was evident in the case of Nike, in 2017 when it lost a large market share due to its racist policies in the China markets, with the company facing litigation costs and social costs. Thus, the company should first align its political ideology with the governing structures and models in the regions it operates. Such will enable the company to create loyalty and thus be welcoming in the new markets despite being an international company
The second priority area that the company should address is its pricing strategy that focuses on relatively low pricing. Considering that diverse regions are faced with different market challenges, Wal-mart should focus on using a diversification strategy rather than using relatively low pricing (Baker et al., 2018). Such diversification strategy will enable the company to target all categories of customers, ranging from the high-income earners to low-income earners. The use of relatively low pricing may not work long for the company considering that the occurrence of a global recession may likely lead to increased cost in supplies, labor, and other expenses, forcing the company to raise it market prices, hence dissuading its long loyal customers.
The third priority area is addressing its ability to tap the rich resource of the customers, who are increasingly using mobile devices. The major challenge faced by the company is that its e-commerce websites are only available in 11 countries, limiting the ability to reach a large customer base. The company must thus focus on increasing its e-commerce stores. The company should focus on setting up paid online ads to direct the customers to the website from the search engines, something which has not been done in the company. Considering that many of the customers are visiting such websites, the paid ads will generate more traffic as the customers visit the search engines, creating awareness among customers of the diverse products offered by the company.
The last priority area should be on addressing the cultural diversity issues to be able to venture into diverse markets without emphasizing on its American culture. For a company to effectively create links and loyalty among new culturally diverse market segments, adequate market research is necessary, which enables the company to deliver products and services that have a cultural appeal (Galvez et al., 2018). Wal-mart must focus on creating such cultural appeal that is lacking by ensuring that its products and services reflect the dynamism in the cultural aspects of its customer markets. Such will eliminate the challenges of cultural conflicts, which was evident in its German markets due to its inability to identify with the German culture.
Evaluation of Wal-Mart’s readiness to compete in the business environment
Wal-Mart is not ready to compete in the international market business environment. The company’s technological infrastructure currently does not support the ability of the company to expand its operations. Even though the company has adopted automation and robotics in its product and service offerings, such units used for store maintenance, fulfilling the customers’ orders are in few locations. Considering that many of its competitors such as Amazon and Costco have made great progress in artificial intelligence and business analytics, the company is likely to be affected by the stochastic and dynamic demand patterns in such competitive, volatile market segments. The company would also be forced to take a lot of time in testing the new technology platforms and evaluating the response of the customers in its new markets (Baker et al., 2018). The company should first leverage the opportunity provided by the increased use of mobile devices by the customers thereby using affiliate and website marketing strategies aiming to increase its sales and also market share, before expanding its operations.
More to these, based on the political and cultural aspects, Wal-Mart is unprepared to handle the political and cultural challenges evident in the international market. As Galvez et al., (2018; p. 225) explain, “many of the challenges facing business chains with locations in many countries is the high cost of regulatory compliance”. Such a challenge has been evident incharacterization by the low wage’s complaints, involvement in political lobbying which is its long-held culture, and the general lack of compliance to the set laws. Such failure to comply with the set regulations saw the company in 2017 paying $10 million for violating food safety rules (Galvez et al., 2018). Thus, the company should first focus on changing its poor political culture that sees its involvement in political lobbying, and then focus on a learning culture to understand the culturally and politically diverse needs of the customers in its new markets.
Baker, W., Benmark, G., Chopra, M., & Kohli, S. (2018). Master the Challenges of Multichannel
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Galvez, J. F., Mejuto, J. C., & Simal-Gandara, J. (2018). Future challenges on the use of
blockchain for food traceability analysis. TrAC Trends in Analytical Chemistry, 107, 222-232.
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