1. Wal-Mart HR strategy:
Wal-Mart’s success in Human Resource Management is keeping their workforce of 1.3
million from unionizing, while adding to it and pursuing other HR activities to further Wal-
Mart’s success. Wal-Mart would not have been able to expand and have the same level of
success without hiring and taking care of quality employees. Some of Wal-Mart’s human
resource activities include employee advancement, employee recruitment on college
universities, and employee training and development. Additionally, while most firms have
slowed down their hiring of new employees, Wal-Mart has sought out new ways to attract
employees to compensate for their further expansion over the next five years.
Looking at Wal-Mart’s Human Resource Management, one of the most important
aspects is Wal-Mart’s employee advancement program. Currently, 65% of the company’s
managers began working hourly jobs, such as cashiers.[12] Wal-Mart has taken great efforts
to ensure that there are opportunities for their employees to rise up through the ranks so to
speak. This availability of opportunities to advance past low-paying hourly wage jobs
undoubtedly is part of the reason that Wal-Mart was voted as one of Fortune magazine’s most
admired companies and was distinguished as one of the best companies to work for in the
U.S.[13]
In the realm of employee recruitment and employee training and development, Wal-
Mart has targeted college students to add to their workforce. Wal-Mart achieves this
recruitment by fanning out over 80 college campuses.[14] While they are at these colleges,
they are also able to expand their demographics by looking at minority fraternities and
sororities, which brings all types of people from different backgrounds, races, and genders
together in the Wal-Mart family. Having a wide variety demographic for a workforce, only
serves to attract more people to seek employment with Wal-Mart because they are able to
show that they have a very open hiring process. Beyond this recruitment, Wal-Mart has
taken an additional step with college students by offering management training for college
students while they are still in school so they are more developed and prepared upon their
graduation.[15] This program serves the purpose of making college students consider careers
with Wal-Mart, and over the last two years, the program has had immense success.
The results of these Human Resource activities speak for themselves. Wal-Mart has
achieved a very good retention rate for their employees, and the proof of this is their focus on
adding to their workforce over the next five years by hiring 800,000 new employees bringing
the total over two million.[16] Despite the reports that Wal-Mart’s employees are underpaid
and not given benefits, Wal-Mart has not wavered. Employees, as much as 60%, have gone
on record saying that they stay with Wal-Mart because the benefits allow them to take care of
their families.[17] If employees were unhappy and leaving at a considerable rate, then the
focus would be on filling these open spaces rather than expanding their workforce.
“ASSOCIATES”
Internal Promotions
Retention
Motivation to same culture
Discounted rates of shares of the company for its employees

2. The discrepancy between Wal-Mart’s poor HR leading indicators and its high degree
of financial success has to do with the introduction and extensive use of technology in
its processes. By increasing the level of automation in its warehouses and stores,
Wal-Mart has reduced the importance of employee satisfaction. The smooth flow of
operations is less dependent on employees, allowing Wal-Mart to hire individuals
with low levels of education for minimum wage compensation. This increase in the
use of technology also means that very little employee training is necessary for
successful execution of job tasks. The minimal training significantly reduces the
investment that Wal-Mart has in each employee, which makes them easily replaceable
as there is not a large financial or temporal penalty in getting a new person up to
speed on their responsibilities.
The reputation this builds for Wal-Mart is not favourable and could result in a reduced
customer value proposition and loss in customers, but image and corporate social
responsibility are not the only factors driving customer value. Additional factors
include price and convenience, two things that Wal-Mart is very good at delivering.
SWOT ANALYSIS:
Strengths
Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and
a wide range of products all in one store.
Wal-Mart has grown substantially over recent years, and has experienced global expansion
(for example its purchase of the United Kingdom based retailer ASDA).
The company has a core competence involving its use of information technology to support
its international logistics system. For example, it can see how individual products are
performing country-wide, store-by-store at a glance. IT also supports Wal-Mart's efficient
procurement.
A focused strategy is in place for human resource management and development. People are
key to Wal-Mart's business and it invests time and money in training people, and retaining a
developing them.
Weaknesses
Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT
advantages, could leave it weak in some areas due to the huge span of control.
Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it
may not have the flexibility of some of its more focused competitors.
The company is global, but has has a presence in relatively few countries Worldwide.
Opportunities
To take over, merge with, or form strategic alliances with other global retailers, focusing on
specific markets such as Europe or the Greater China Region.

3. The stores are currently only trade in a relatively small number of countries. Therefore there
are tremendous opportunities for future business in expanding consumer markets, such as
China and India.
New locations and store types offer Wal-Mart opportunities to exploit market development.
They diversified from large super centres, to local and mall-based sites.
Opportunities exist for Wal-Mart to continue with its current strategy of large, super centres.
Threats
Being number one means that you are the target of competition, locally and globally.
Being a global retailer means that you are exposed to political problems in the countries that
you operate in.
The cost of producing many consumer products tends to have fallen because of lower
manufacturing costs. Manufacturing cost have fallen due to outsourcing to low-cost regions
of the World. This has lead to price competition, resulting in price deflation in some ranges.
Intense price competition is a threat.
Wal-Mart’s Basic Strategy:
Low Cost
High Volume
Customer Satisfaction
Competitive Advantage:
Distribution Capabilities
Partnership relationship with suppliers
Advanced Data mining
Workforce Culture
Everyday Low Prices (EDLP)
Suppliers Weak Power:
The suppliers are the consumer goods manufacturers for both food and durables and
they have little power. The availability of alternate suppliers puts the retailers in a
strong position. Retailers have high power of negotiation because of high volumes
purchased and the projected discount market. A Wal-Mart is extremely important to
any supplier, however Wal-Mart can easily survive without this particular supplier.
Internal Rivalry: Strong
Competition is fierce among discount retailers due to:
Lack of differentiation in product offerings
Low switching costs for end consumers

4. Volume driven strategies that aim at grabbing market share at the expense of
profitability.
Analysis of Starbucks Using Porter’s Five Forces
1. The Threat of Substitution
Substitutes (Products)
‐ Other beverages apart from Starbucks coffee and tea – Examples include
soda, fruit juice,
smoothies, water, beer and other alcoholic drinks
‐ Other “quick‐grab” foods apart from pastries, muffins, doughnuts, etc sold at
Starbucks.
Examples include burgers, burritos, tacos, sushi, snack food
Substitutes (Environment/Ambience)
‐ Lower‐end or “less luxurious” coffee places
‐ Places that offer people a place to hang out, chat, relax or even work.
Examples include tea
houses, fast food places, ice‐cream parlors, side‐walk cafes, and bars and pubs
2. The Threat of New Entry
‐ The entry barrier for the coffee industry is relatively low, even for premium
coffee like Starbucks.
Any large and well‐funded company where capital is not a problem could be
potential entrants.
‐ Some of the more current and ongoing threats of new entrants include fast
food chains such as
McDonalds, Burger King and Dunkin Donuts.
3. Competitive Rivalry
‐ Other coffee chains. Examples include Coffee Bean & Tea Leaf, Gloria
Jeans Coffee, Peet’s, and
San Francisco Coffee House
‐ Smaller privately owned coffee houses
‐ Secondary coffee providers. Examples include McDonalds, Burger King,
Dunkin Donuts6
4. The Bargaining Power of Suppliers
‐ Not much bargaining power for coffee bean suppliers due to the importance
of Starbucks’ business to any individual supplier, and the fact that Starbucks
probably accounts for a large percentage of any individual supplier’s sales..
This gives Starbucks the ability to dictate the price of
coffee bean sales.
‐ Similarly, suppliers of paper and plastic products, such as cups, napkins, lids,
etc, have very little bargaining power due to the large amount of alternative
sources Starbucks could draw from. In addition, Starbucks has formed
contracts with such suppliers, giving them effectively no bargaining
power.

5. ‐ There is more bargaining power for suppliers of technological innovations
such as automated coffee machines, latte and espresso machines, etc because
there are not as many suppliers for such equipment as there are for coffee
beans.
5. The Bargaining Power of Buyers
‐ In the past, buyers did not really have bargaining power when it came to
premium coffee such as Starbucks. The sheer scale of Starbucks’ business
reduces the bargaining power of any single group of buyers.
‐ With newer entrants and competitors such as McDonalds who claim to offer
premium roast coffee of reasonable quality for lower price, buyers now have
slightly more bargaining power than they’ve had in the past.