Walmart’s mission can be summarized as “helping people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy and Walmart’s business model.
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Walmart’s business model evolution
Sam Walton, founder of Walmart, said that “the secret of successful retailing is to give your customers what they want.”
And he continued, “and really if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience.”
While those are things that people did want in the past, the world has also changed substantially. As technology has evolved, the experience of Walmart customers has also moved from physical to digital.
E-commerce was not a core part of the Walmart business strategy. Currently, instead, Walmart has incorporated this part within its mission.
As highlighted in the Walmart Investment Community Meeting of 2017:
90% of Americans live within 10 miles of a Walmart. There’s 1.4 million associates, and Walmart’s the largest grocer in the U.S. So when we think about some of these assets and we think about playing offense, we think about it across 3 dimensions: price, assortment and experience.
What is the direction? We want to be the destination for customers to save money no matter how they want to shop, whether it be pickup, delivery in 2 days or deliver in 2 hours. The idea is to save customers money at any service level.
We want to make every day easier for busy families. That’s our vision
Understanding Walmart’s vision is essential, as well as understanding its business strategy. Which is summarized in the Investment Community Meeting as follows:
In summary, the strategy is very simple. We’re going to be maniacally focused on just nailing the fundamentals. We’re going to look for ways to play offense by leveraging unique assets. And we’re going to be focused on innovating for the future.
Therefore, Walmart’s business strategy leverages three key ingredients:
Maniacally focusing and nailing the fundamentals
Play offense by leveraging Walmart unique assets
Innovating for the future
What does Walmart mean when it says “making every day easier for busy families?”
Understanding its definition and why Walmart picked this market segment will help us capture its direction:
So let’s talk about making every day easier for busy families. Why busy families? Well, it’s a big part of the market, and we’ve learned that what we do to effectively serve them helps us serve everybody else, so they’re the center of the bull’s eye.
Choosing a big enough market is a fundamental problem in the entrepreneurial world.
A total addressable market or TAM is the available market for a product or service. That is a metric usually leveraged by startups to understand the business potential of an industry. Typically, a large addressable market is appealing to venture capitalists willing to back startups with extensive growth potential.
To clarify, this isn’t a straightforward issue.
When companies are opening up new spaces and markets, none knows how big that market will be.
For instance, when smartphones took over, it became a massive market, and many companies have already moved to a mobile-first world.
Walmart picked the “busy families” because, according to them, it represents a good chunk of the families.
That makes them focus on a particular segment and informs their business strategy.
As Walmart points out, they learned that by serving a specific segment, they end up doing anyone else better.
But who are those busy families? As pointed out in the Investment Community Meeting of 2017:
So we really have 1 member. And I want you to think of them like this. It’s a busy family, typically living in the suburbs of 1 or 2 incomes. They make somewhere between $75,000 and $125,000 a year. They may own a couple of cars. They may be employed or self-employed. They may own a small restaurant or run a small office and purchase a few things for their business.
Once again, this is a simplification. And it allows focus, as specified by Walmart executives:
So we’re moving forward and we’re moving quickly to align the entire business around this more narrow focus. We’re evaluating everything from our membership offering to our merchandise categories to our locations, and we’ve got some important choices to make in the future.
And what’s going on with those busy families, according to Walmart?
What’s happening with them? Well, you know they’re more connected. They’ve embraced mobile in a big way. In fact, globally, around the world, mobile commerce has grown by about 80% just in 2 years.
Therefore, as technology evolves, Walmart uses it and incorporates it in its mission and vision to serve better its target segment.
And that is why Walmart is becoming more and more of a digital company:
Technology will also help serve up things to customers that they might want to do. So becoming more of a digital company and learning how to work with speed is important to us throughout.
It is important to remark that technology helps an organization to better serve its target. This also implies a change in its monetization strategy.
However, its core values stay the same.
For instance, in 2018, Walmart started to roll out a program called Jetblack to serve “busy families” that, for a fixed membership price, could get a customized sales experience.
As of 2022, 2,751,779,629 Shares were outstanding for Walmart. The company’s major shareholder is the Walton family, whose mission is to “help people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy. From humble beginnings just over 50 years ago, Walmart’s business model has become the world’s largest retail company.
Walmart in numbers
Let’s look at some of Walmart’s critical financials for 2021:
Key Highlights
Mission and Vision:
Walmart’s mission is centered around assisting people globally in achieving savings and improved living standards. This mission is accomplished through a combination of their retail stores and online eCommerce platforms. It emphasizes the company’s commitment to offering cost-effective solutions to its customers. Simultaneously, Walmart’s vision revolves around simplifying the lives of busy families by providing services and products that cater to their convenience and needs.
Core Values:
Walmart’s mission encapsulates three core values: price, assortment, and experience. The company strives to offer competitive prices that enable customers to save money. Moreover, their commitment to a diverse and extensive assortment of products ensures that customers have access to a wide range of choices. Lastly, Walmart places significant emphasis on providing a positive shopping experience that is both satisfying and enjoyable for their customers.
Evolution of Business Model:
Over time, Walmart’s business model has evolved to integrate the growing significance of eCommerce in addition to their traditional retail approach. Recognizing the digital transformation of the retail landscape, Walmart adapted its core value proposition to encompass online shopping experiences alongside physical store visits. This evolution enables customers to access Walmart’s offerings through various channels, aligning with changing consumer preferences.
Business Strategy:
Walmart’s business strategy is founded on three key principles. Firstly, they emphasize the importance of mastering the fundamental aspects of their operations to provide consistent quality and value to customers. Secondly, Walmart capitalizes on its unique assets and strengths to proactively engage and satisfy customer needs. Lastly, the company maintains a forward-looking perspective, continuously innovating to adapt to emerging trends and technologies in the retail industry.
Target Market:
Walmart’s strategic focus centers on catering to the needs of busy families, particularly those residing in suburban areas. These families typically have 1-2 sources of income and earn within the range of $75,000 to $125,000 annually. By understanding and addressing the needs of this specific segment, Walmart is better positioned to create tailored solutions that resonate with their target audience.
Technology Integration:
Technology is a pivotal component of Walmart’s strategy to serve its customers effectively. The company recognizes the increasing role of technology in modern life, especially among busy families. This integration involves leveraging digital platforms, mobile applications, and online services to enhance the shopping experience, provide convenience, and offer personalized solutions based on customer preferences.
Jetblack Program:
The Jetblack program, introduced by Walmart in 2018, exemplifies the company’s commitment to meeting the unique demands of busy families. This initiative offers a subscription-based service that provides personalized shopping experiences to members. Through this program, Walmart aimed to simplify the shopping process for busy families by offering tailored product recommendations, convenient delivery options, and other value-added services
With over $572 billion in net sales in 2022, Walmart operates a differentiated Omni business model with three primary units comprising Walmart U.S., Walmart International, and Sam’s Club (a membership-only warehouse club), together with Walmart+. This subscription service includes unlimited free shipping, unlimited delivery from its stores, and discounts launched in 2021.
Walmart generated over $572 billion in revenue in 2022 and over $13.6 billion in net profits in the same year. Compared to over $559 billion in revenue in 2021 and over $13.5 billion in net profits.
Walmart’smission can be summarized as “helping people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy.
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
From humble beginnings just over 50 years ago, Walmart has become the world’s largest retail company. A single small discount store in Arkansas has now expanded to over 11,000 stores in 28 countries. Some reports suggest that the company makes $1.8 million of profit every hour.
Adidas’ mission is “To be the best sports brand in the world.” Adidas AG is a German multinational initially founded in 1924 by Adolf Dassler who developed spiked running shoes out of his mother’s house. Today, the company is the largest sportswear producer in Europe and the second largest globally behind rival Nike.
Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional business model as its ecosystem grows.
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
Apple’s mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”
Netflix’s core mission, strategy, and vision are that of “improving its members’ experience by expanding the streaming content with a focus on a programming mix of content that delights members and attracts new members.”
Coca-Cola’s Purpose is to “refresh the world. make a difference.” Its vision and mission are to “craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better-shared future that makes a difference in people’s lives, communities, and our planet.”
Starbucks highlights its mission as “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” And its vision is to “treat people like family, and they will be loyal and give their all.”
Microsoft’s mission is to empower every person and every organization on the planet to achieve more. With over $110 billion in revenues in 2018, Office Products and Windows are still the main products. Yet the company also operates in Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud, and more.
Walmart’smission can be summarized as “helping people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy.
Nike vision is “to bring inspiration and innovation to every athlete in the world.” While its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.”
Google mission statement is to “organize the world’s information and make it universally accessible and useful.” Its vision statement is to “provide an important service to the world-instantly delivering relevant information on virtually any topic.” In 2019, Sundar Pichai emphasized a renewed mission to allow people “to get things done!”
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
