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Assignment:
Evaluate Wal-Mart's strategy. Apply the kernel of strategy to analyze how Walton created and deployed a winning strategy in discount retailing in the US.
Diagnosis: Identify and describe Sam Walton's diagnosis of the problem. How did he define the problem differently from others in the discount retail industry? How did Walton create a simpler story of the challenge that he faced that others could understand and act on?
Guiding Policy: Identify what his guiding policy was. What was behind the EDLP, everyday low prices policy? What did Walton focus on to give his firm direction?
Coherent Action: How did Walmart develop a coherent set of actions? Draw out an activity map of all of Walmart's key activities. Draw the reinforcing links between activities. Identify and sketch out Wal-Mart's business model. What was the "profit engine" Walton built into Wal-Mart? Remember that a business model "profit engine" diagram is going to relate together revenues, volumes, costs and margin. The business equation is, as you will recall, is Profits = Q (R-C) TIME. Sketch out the logic of its business model showing what Wal-Mart does to generate its revenue, increase its quantity, lower its costs.
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