DECISION MAKING SKILLS Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Decision Making Skills Case Study Solution

Decision-Making Situation

The life example on the strategic decision making has been taken from the situation of business in which Wal-Mart and its acquisition of Jet.com for strengthening the company’s e-commerce. The purpose was to strengthen its e-commerce selling services to the consumers by targeting more of the customers and improving its distribution. This would lead Wal-Mart in generating better revenues and profits and also acquiring more customers.

Wal-Mart Brief Introduction

Wal-Mart is one of the leading brick and mortar retailing store in the U.S. It was founded in the year 1962 and had managed to earn a profit of $485.9 billion in the year 2016. The company’s main founder was Sam Walton who had first opened the store by the name of Ben Franklin. The main strategy for Walmart is to sell its product at low cost and also establishing department, supermarket and retail store which could be easily accessible for every person in the U.S. For making each of the store available in every place, the strategy was to construct the store or acquiring other building or store to improve its distribution.

Walmart did less promotion activity than its competitors which made them in being cost-effective and minimizing its costs. Walmart saw an opportunity to improve its sales by entering the e-commerce market by selling its products online. It had entered the e-commerce market in the year 2014 and had been using various strategies for improving its e-commerce revenue. However, there is heavy competition in the e-commerce market as there are numbers of sellers who are providing products at low prices.

Problem Statement

Ever since Walmart entered the e-commerce market, it had been facing heavy competition and top of that its revenue had been poor and declining each year. In the year 2016, its revenue generation from e-commerce sales was contributing only 8%. Walmart was having difficulty as what fitting strategy would improve its overall sales in the e-commerce sector.

Defining Alternative

After analyzing the problem which is the slow growth in the e-commerce growth and sales. The company had developed a number of solutions which would improve the overall performance of Walmart. Following are the alternatives explained with each of its pros and cons below.

Alternative #1

The first alternative for the company was to disband its e-commerce services due to the poor performance and low sales in the first quarter of 2016. After analyzing the e-commerce market, there were numerouscompetitors which had been impacting on the Walmart e-commerce entry. Such as the leader Amazon and eBay which had captured the e-commerce market and were making it difficult for other companies to enter the market. As most of the customers were loyal towards Amazon and eBay website, it was difficult for them to convince in shifting to Walmart e-commerce website. So the first alternative which the company had developed was to eliminate its e-commerce sector.

Pros:

It would be able to focus more towards its department, superstores and its brick and mortar retail stores.
Reducing its overall cost, time and labor by eliminating the e-commerce

Cons:

Losing the opportunity for improving its sales and growth by selling its products online.
Many of the competitors such as Target Corporation and Costco had been performing well on its e-commerce

Alternative # 2

Another alternative which had been developed by the top executives of Walmart was to offer better discounts and other promotional activities than its retail stores on the e-commerce website. The company could implement a reward system in which the customer would get more discount on product, the more it buys the product online for creating awareness and attraction to the customers. Since the competition was very high in the e-commerce market and majority of the customers buying products online were price conscious and would prefer to buy products at low cost. The company could offer discounts from coupons or other forms to encourage the customers on buying the product online.

Pros:

Improving the e-commerce revenue sales and growth of Walmart.
Attracting more customer who is price conscious towards buying products online.

Cons:

Due to lowering the prices of product through discounts and promotional activity would result in low-profit margin or even loss.
By offering discounts on the products, thecustomer would perceive that the product is either outdated or is defective which may stop the customer in purchasing the product.

DECISION MAKING SKILLS Harvard Case Solution & Analysis

Alternative # 3

The last alternative which had been developed by the top executive of Walmart was to improve its e-commerce retailing by acquiring high potential e-commerce companies. This acquisition would result in faster e-commerce growth through expanding its reach to the customers and adding new features for improving Walmart’se-commerce growth. Since Walmart was looking for ways to providing the customer with good and simple shopping experience than its competitors. Also due to the company experiencing high profits from its retail stores, supermarkets, and department stores, it could acquire or partner with top e-commerce companies for selling its products online................

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