WALMART BALANCED SCORECARD

Contents
Contents................................................................................................................................. l
l - VlSlON AND STRATEGY OF WAL-MART........................................................................l
2 - BALANCED SCORECARD OF WAL-MART.....................................................................2
Financial Perspective:......................................................................................................... 2
lnternal process: ................................................................................................................ 3
3 - STRATEGY MAPS OF WAL-MART..................................................................................4
4 - RECOMMENDATlONS TO TOP MANAGEMENT.............................................................5
5 - CRlTlCAL ANALYSlS....................................................................................................... 6
6 - EXECUTlVE SUMMARY................................................................................................... 7
7 REFERENCES................................................................................................................. 7
8 APPENDlX....................................................................................................................... 8
1 - VISION AND STRATEGY OF WAL-MART
The main vision of the organisation is to build and lead a team of self directed
employees who are the main pillars to build the next gen business enterprise.
The strategy of the organisation is to position them as the best global retailer which
aims to address the needs of the potential customers who are located in various
geographical locations. The firm must aim to address the customer demands, most
importantly in emerging locations, and also on the job security for the employees and
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also to protect their personal finance. ln emerging markets, the economic is
recovering very stronger, faster and it is due to the rise in the income level of the
middle class segments which is increasing in faster number. The firm should focus
all of its attention in this segment so that it can immediately gain a string foothold in
such markets. This would also present an implausible opportunity in building the
next generation Wal-Mart.
2 - BALANCED SCORECARD OF WAL-MART
The Balanced Scorecard (BSC) is one of the precious systems which are basically
applied by different business companies to clarify and decipher their operating
strategies into practice; however the Balanced Scorecard is intended to produce
results for large corporations which want to win and sustain in the business. This
assignment attempts to provide a detailed insights on the importance of balanced
scorecard for Wal-Mart and how WalMart can successfully compete with the help
of BSC. The BSC can be applied by the retail giant which to successfully compete
both in local markets and in international markets and can carry out social process in
the areas were the business is being operated.
Financial Perspective:
Based on the information provided by the company related to the three key
performance indictors including growth, leverage, and returns the financial
performance of the company can be evaluated. The company's international
operations also have expanded their operations by adding to total square footage
particularly in Brazil, China, and Mexico. The company has established more than
500 additional units in the year 20l0 which is quite phenomenal. Rapid growth has
been observed in its international operations. (Wal-Mart Annual report, 20ll). The
company has also been making efforts to lower its costs and one way of doing so is
by increasing the value of sales per employee i.e. increasing their productivity and
getting rid of non-profit generating units and offers. The company ROl has improved
in the last one year resulting from higher margins that the company has been able to
achieve on its sales, better management of inventory, and efficient allocation of the
company's resources for achieving higher productivity.
The company provides information regarding the key highlights of the business over
a period from 2009-20l0 and also makes use of company performance matrix which
has three elements growth, leverage, and return. These key performance indicators
although lack graphical representation like most of the companies but they set out
the criteria for assessing the company's performance over the last one year. Growth
indicator indicates plans of the company for expanding its floor space through
expansion of its current stores and establishing new ones internationally. This is
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supported by information pertaining to the number of retail units of the company and
total square footage of three different brands that the company is operating.
Leverage indicator sets out the company's aim to cut down its expenses and
increase productivity. Finally, return is one performance indictor which is related to
the company's ability to generate returns for its shareholders which is supported by
the trend in ROl of the company (Wal-Mart, 20l0).
Customer perspective:
The firm's biggest success lies in the hands of customers. Customers come to Wal-
Mart for price competitiveness and quality. The firm should lay special emphasis on
the pricing factor. The firm employs "Low prices everyday" concept, however it
should concentrate to think beyond just pricing. The firm should attempt to new type
of customers and also retain a huge number of existing customers. The firm should
also concentrate in increasing the awareness among other customers who try to
avoid Wal-Mart. (Courtemanche, 20l0). The quality of the products which is being
stored and supplied should be of high quality and the firm should sell food products
which is less in calories in order to keep in mind the health of the customers who are
buying from the retail store.
Internal process:
The firm should concentrate in improvising the existing process quality, the firm
should try to link the materials from the supplier to the customers with a lesser lead
time, in the business of shrinking margins the company which is equipped
extensively well in the logistics and supply chain department can win over the
customers and can successfully lead in the business, therefore the enterprise should
concentrate in enhancing the internal process and scale it higher. This also helps the
firm to reduce the overall delivery time which is provided to the customers. (Wal-Mart
Annual report, 20ll). Customers would generally be benefited and the organisation
can save huge costs due to the process. Wal-Mart should also do an overall analysis
on the post sales activity this is carried out so that it can forecast each customers
profile and can serve them better, also there must be a cordial relationship with the
suppliers who are the key to business innovations and leading from the forefront.
The suppliers are selected after careful evaluation procedures who are meeting the
requirements of the organisation. (Basker, 2009).
Learning and Growth:
To lead and grow in the field the firm should concentrate in improving the skill and
abilities of the work force. The employees should be trained effectively in serving the
needs of the customers; therefore proper training and practice must be given to them
so that they perform the task with much ease. The training should cater to the needs
of the customer's demands. (Carden. 2009). Employees must be equipped with the
required inputs so that they can service the customers to the utmost extent. Also, the
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firm should decrease the employee turnover and it should indulge in creating more
jobs either directly or indirectly. lt can also concentrate in enhancing small
entrepreneurs and suppliers who can become a part of Wal-Mart's sustainability
strategy. (Wal-Mart Sustainability report, 20ll)
3 - STRATEGY MAPS OF WAL-MART
The following is the strategic map analysis of Wal-Mart
The strategic map basically lies on four quadrants Financial perspective, Customer
perspective, internal process and Learning & growth. These four are the main pillars
in balanced scorecard. Wal-Mart should concentrate on all these area so as to
sustain and grow in the competitive environment.
Strategic implication of financials:
Wal-Mart should attempt to link productivity, growth and shareholder value. These
three are interrelated and must be focused always. The main aim of the organisation
is to sustain the shareholders value; this can only be achieved when there is a
increase in revenue. For ensuring the revenue growth the organisation must focus
on the productivity and should sustain the same in the future. Moreover the firm
should improve the brand of the products which it is selling inside in the stores.
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Customers have now turned out to be brand conscious and they need more value for
the goods which they purchase. Wal-Mart should concentrate in improvising the
buying experience of the customers (Wal-Mart Sustainability report, 20ll).
Strategic map analysis based on Customer perspective:
Price, quality, time and function are the most important aspects in rendering utmost
customer services. Customers basically come to Wal-Mart for price and quality factor
which they may not be getting in the nearby stores. Wal-Mart should concentrate in
enhance the customer experience by making them to save more money everyday.
Internal process: Wal-Mart basically depends on the suppliers and customers in
sustaining in the competitive market. There is a huge competition for Wal-Mart
across all sectors in the retail industry. Many are opposing to Wal-Mart's nature of
conducting the business, however, the firm should try to enhance the operations
through social process this will provide a tendency to the customers as well as the
suppliers to succeed in the current operations. (Holmes, 2009). The firm should
concentrate in taking full advantage of the available opportunity which is presented
before them, the top management should consider in implementing scalability and
sustainability in all the operations of the business. Manage operations, manage
customers, manage innovation and manage social process should be the pillars
around which the firm should establish a winning strategy.
The firm should encourage learning and innovation as a part of competing in the
market. The employees should be provided plenty of opportunity to show cast their
talents, and learning must be a part of the working environment structure. Business
of Wal-Mart is depends on the flow of information. Wal-Mart operates in high volume
less margin business; therefore the amount of information which is being passed
depends on the profitability of the firm.
4 - RECOMMENDATIONS TO TOP MANAGEMENT
ln order to achieve the above stated vision of the organisation, the firm should try to
concentrate in three brad areas, the first is being managing and enhancing greener
supply chain and logistics systems, procuring the groceries and other dairy products
directly from farmers, and be a part in building social responsibility in the locality
were the business is having is operations. The organisation should take enhanced
measures in upgrading the supply chain measures to a large extent, the company try
to invest in the next few years in saving the carbon footprints and also to convert the
supply chain management system greener, this will tend to add more value to
business as these would eventually benefit in the bottom line growth of the
organisation. (Klein, 20l0). Secondly the firm should increase the procurement
towards farmers, the firm should concentrate in making the goods available at all
times, for this the retailer should receive an uninterrupted supply of food and
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groceries supply from the manufacturers, if the firm makes an agreement and
procure from the farmers the company can make sure that they receive goods so
that the end users always benefits from the process. (Jia, 2008). Also, the firm
should ensure that it is effectively contributing in uplifting the livelihood of the people
and the community in which the firm is operating its business. Moreover, the
company needs to concentrate in enhancing the human capital of the firm by
providing them the needed training so that they can equip their skills so that they can
serve the customers better and expand the operations of the business through
careful sharing of information's from the customers. The business of Wal-Mart runs
based on the information, the retailer needs to compete effectively with the other
retailers, for this the firm needs to update and receive most important information on
time.
5 - CRITICAL ANALYSIS
The company is currently focusing its attention in helping the customers to save the
money. This is being achieved based on the logistics and supply chain, the firm is
widely concentrating in making greener supply chain management systems. One
example is identified that the firm currently face is the challenge in managing the
seafood network at the organisation. (Wal-Mart Annual report, 20ll). One of the
important paths which the company is identifying to avert the reduction of the sea
food stocks is by ensuring there is a continuous supply of fish, the procurement
department tries to make the needed fish and sends the same for processing, and
this is done by sustainable practices in the department. Rather than just trying to
identify and state various new type of standards in establishing the sustainable
practices, the company tries to take huge advantages of partnering with a third
person for certification program thereby reducing the costs and improving the
internal business process.
Moreover, the new global processes team of the organisation is currently creating
and various enhanced processes to improvise the business operations most
particularly for workforce productivity which is a key element in the overall
operational segments. Also, the global consumer group is identifying ways and
means in enhancing the growth through proper understanding and coordination of
the consumer trends and through the application of various business analytical tools.
The management is very much happier with the amount of progress which the team
is making and they are also trying to identify the best talented minds in each of the
geographical location were the company is operating. (Sobel, 2008). They are also
involved in the recruitment, development and also in management of the leaders
which is one of the essential for the future growth and success of the organisation;
moreover there is a special importance in grooming women leaders inside the
organisation thereby providing equal opportunities to all people. This is quite
significant for the organisation mainly due to the fact that the global workforce
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consists of women who represents half of the obtainable talent and moreover they
are key in taking important decisions in the buying process, it is identified that they
are responsible for more than $l0 trillion spending by in the global consumer market.
- E!EC"TIVE S"MMARY
This report is an original contribution which attempts to explain the overall vision and
strategy implementation of the global retailer Wal-Mart. This paper tries to submit
detailed report to the top management of Wal-Mart. This representation about the
future goals and vision of the business enterprise which is carried through the
application of balanced scorecard and strategic maps which was propounded by
Kaplan and Norton. After careful thought and analysis the vision of the organisation
is identified and the methods to achieve the vision are also stated. This report is
divided in to six important section, the first being identified as the vision and strategy
of the organisation, the second part is about the balanced scorecard of the firm, the
third part is drawing a strategic map analysis of the Wal-Mart, the fourth part is the
recommendations and the final is about the critical analysis of the various process of
the company.
# $ REFERENCES
Basker, E., Noel, M., (2009). The evolving food chain: Competitive effects of
Wal-Mart's entry
Carden, A., Courtemanche, C., (2009). Wal-Mart, leisure, and culture,
Contemporary Economic Policy 27, 450-46l.
Cespedes, Frank V. (2008). `Wal-mart stores in 2003', Harvard Business
School Case Study 709-423.
Courtemanche, C., Carden, A, (20l0). Supersizing supercenters? The lmpact
of Walmart Supercenters on body mass index and obesity, Journal of Urban
Economics, forthcoming.
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Currie, J., DellaVigna, S., Moretti, E., and Pathania, V., (20l0). The Effect of
Fast Food Restaurants on Obesity and Weight Gain. American Economic
Journal: Economic Policy 2, 32-63
Ellickson, Paul B. (2007). Does Sutton apply to supermarkets? RAND Journal
of Economics 38(l):43-59.
Holmes, Thomas J. (2009). `The diusion of Walmart and economies of
density', mimeo., Univ. of Minnesota.into the supermarket industry. Journal of
Economics and Management Strategy l8(4):977-l009.
Jia, Panle (2008), `What happens when Walmart comes to town: An empirical
analysis of the discount retailing industry', Econometrica, 76, 6, l263-l3l6
Klein, Peter G. (20l0). The Capitalist and the Entrepreneur: Essays on
Organizations and Markets. Auburn, AL: Ludwig von Mises lnstitute.
Sobel, R., Dean, A., (2008). Has Wal-Mart buried mom and pop? The impact
of Wal-Mart on self employment and small establishments in the United
States, Economic lnquiry 46, 676-695.
WalMart (20ll). Annual Report
WalMart (20ll). Sustainability Report
% $ APPENDI!
Sustainability Strategy index of Wal-Mart (Source: www.walmart.com)
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Global Carbon emission of Wal-Mart
Renewable energy and Energy efficieny of Wal-Mart (Sustainability report, 20ll)
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