Creativity and diversity can lead to outcomes that both maximize profit and enhance social well-being. Business leaders use measurable factors to help determ
Creativity and diversity can lead to outcomes that both maximize profit and enhance social well-being. Business leaders use measurable factors to help determine design and development decisions, “go” or “no-go” milestones, financial models, and many “what if” scenarios. In this process, the new product or service is considered as part of a system.
You rocked your BMC and received a great response from the experienced project manager (PM). As you read the feedback, you realize that it’s now time to develop the financial component. In the comments, the PM also stated that no matter how good an idea is, to senior management, it’s a “no-go” if the new product or service does not produce sales.
In preparation for your funding pitch, the PM also warns that funding pitches are quick and decisive. Including too much information could overwhelm senior management, cause more questions, and erode the purpose of the funding pitch.
The PM’s directive at this point is for you to develop a 24-month pro forma that demonstrates the potential profitability of the new product or service in an income statement. You will use the Module Six Assignment Template linked in the Guidelines for Submission section to complete this assignment.
You may use the current company’s income statement to project what can be added to the company’s profitability. This can be found in the company’s 10-K. Look to other companies in the marketplace with products or services similar to the one you are proposing as a basis for your projections. Additionally, you may use the company’s current year numbers and key assumptions based on your analysis of the market to project into the future. Remember, these numbers are purely speculative.
In the template, you will specifically address the following:
- Previous fiscal year: Identify historical information for the previous fiscal year.
- 24-month projections: Speculate projections for 24 months.
- Explanation of assumptions: Explain how you were able to speculate appropriate assumptions
PROJECT OUTLINE for Product Assortment Planning for Walmart 3
Project Outline: Product Assortment Planning for Walmart
Jacob Wright
Southern New Hampshire University
BUS-400: Driving Business Opportunities
Professor Winkelhake
10 September 2023
PROJECT OUTLINE for Product Assortment Planning for Walmart 1
About Product Assortment Planning
Walmart is famous for its broad range of goods and services. To improve service quality and market leadership, the organization must optimize its product assortment approach. This initiative seeks to improve Walmart's product assortment planning, which carefully selects quantities of products for customers. The goal is to personalize shopping to enhance sales and profitability. This program supports Walmart's commitment to continual development and customer-centricity in the changing retail market.
Goals
· To simplify and improve the product selection offered in Walmart stores, online, and through the newly introduced delivery services.
· To do this by providing a well-selected range of items that are tailored to the requirements of the target audience.
· To adjust to the ever-shifting economic conditions and to enhance overall financial performance.
Target Customer
The intended consumer base for this project is purposely broad and diversified, including customers with different interests and demands. Walmart knows it must appeal to this varied clientele with its product range. Targeted client segments:
Budget-Conscious Consumers: Walmart is known for inexpensive daily things. This initiative aims to improve shopping for budget-conscious families and individuals. Value-driven shoppers want a broad selection at low costs (Van Loo & Aggarwal, 2023). Walmart wants to remain the budget-conscious customers' first option by refining its product range.
Families: Families searching for one-stop shopping have always favored Walmart. Families trust Walmart to effectively satisfy their grocery, housekeeping, clothes, and other purchasing requirements. This initiative understands the significance of catering to families by offering a wide range of products that ease shopping and enhance the experience.
Tech-Savvy Shoppers: Tech-savvy shoppers want ease and innovation in the digital world. Walmart's GoLocal drone delivery and online shopping alternatives attempt to attract this sector (Staff, 2023). This tech-savvy client base appreciates smooth digital interactions, and the initiative keeps Walmart ahead of its changing expectations.
Value and Quality Seekers: A large chunk of the market buys value and quality. Walmart will prioritize high-quality, affordable items in its product assortment strategy. Walmart can attract value- and quality-conscious consumers by creating an inventory that meets their needs. Walmart's product assortment planning strives to create a shopping environment where everyone can discover items that meet their demands by deliberately addressing these varied consumer categories' wants and preferences. Inclusivity boosts sales, customer happiness, and market competition. Walmart's success in retail is based on providing a wide spectrum of consumers.
Market Opportunity
Walmart's large consumer base and worldwide reach make this project's market potential enticing. Several elements make this opportunity important. Internet shopping and drone deliveries are in high demand. Changing consumer patterns, spurred by COVID-19, have exacerbated this tendency (Alwan et al., 2023). Walmart can address this expanding demand and lead retail logistics technology by offering the GoLocal drone service. Consumer tastes and economic situations change, making retail a dynamic industry. Walmart's success will depend on its ability to adjust quickly. Walmart can adapt to market changes with this initiative, keeping it current and attractive to a varied client base.
Walmart has an edge in a competitive industry dominated by e-commerce companies due to its massive retail store network. These physical places may execute orders and engage with customers, providing convenience and tangibility. Walmart is strong because it competes with e-commerce titans while using its physical presence (Alwan et al., 2023). The project's emphasis on maximizing product selection and adapting it to consumer groups helps attract and keep customers. Walmart can increase consumer loyalty and stand out in a competitive market by personalizing and streamlining purchasing.
Financial Opportunity
This initiative gives Walmart several lucrative revenue potentials. Walmart may boost sales by tailoring its product range to meet client requirements. This personalized strategy should enhance sales and maintain growth. The initiative improves inventory management, reducing waste. By reducing overstocking and product obsolescence, Walmart can save expenses and boost profits (Walmart, 2022). A well-curated product range may increase client loyalty and repeat business. Happy consumers who discover what they need are more likely to purchase at Walmart again, providing a consistent cash stream (McLymore et al., 2022). The idea allows online and drone delivery businesses to grow with user preferences. This diversification may boost Walmart's earnings and present it as a retail innovation. This initiative aims to boost retail market share and competitiveness. While initial profitability may vary, better customer retention and operational efficiency are expected to provide significant financial benefits, making this initiative a critical investment in Walmart's future.
Timeline
Phase 2 (Months 4-6): Examine client preferences, market trends, and economic situations. Use insights to optimize product assortment.
Phase 2: (4-6 Months): RFID pricing engine and electronic shelf labeling minimize product waste and increase price transparency.
Phase 3 (Months 7-12): Launch GoLocal drone delivery for small and big companies with optimal product selection.
Phase 4 (13-18 Months): Use real-time data and consumer input to improve product selection. Walmart can react to market circumstances while preserving financial stability and consumer pleasure using this timeline's progressive, data-driven approach to change.
References
Alwan, S. Y., Hu, Y., Al Asbahi, A. A. M. H., Al Harazi, Y. K., & Al Harazi, A. K. (2023). Sustainable and resilient e-commerce under COVID-19 pandemic: a hybrid grey decision-making approach. Environmental Science and Pollution Research, 30, 47328–47348. https://doi.org/10.1007/s11356-023-25456-0
McLymore, A., Cavale, S., & McLymore, A. (2022, August 11). Focus: Inflation steers budget shoppers away from Walmart. Bringing them back may not be easy. Reuters. https://www.reuters.com/business/retail-consumer/walmarts-long-lasting-challenge-luring-budget-shoppers-back-its-stores-2022-08-11/
Staff, S. (2023). Walmart attracts budget-conscious customers, and remains strong in Q2. In Business Madison. https://www.ibmadison.com/walmart-attracts-budget-conscious-customers-remains-strong-in-q2/
Van Loo, R., & Aggarwal, N. (2023). Amazon’s Pricing Paradox. Social Science Research Network. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4436546
Walmart. (2022). Purpose. Corporate – US. https://corporate.walmart.com/purpose
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3-2 Milestone One Submission
Jacob Wright
Southern New Hampshire University
BUS-400: Driving Business Opportunities
Professor Winkelhake
16 September 2023
Introduction:
Ladies and gentlemen of the senior management group, I appreciate the opportunity to discuss an idea that holds great promise for the future of Walmart. Today, I will introduce our Product Assortment Optimization program to improve our product selection approach for our diverse consumer base. This project aligns seamlessly with our strategic plan and objectives.
How it fits:
Walmart's corporate strategy is based on customer-centricity and our objective to offer a wide range of high-quality products at low rates. A strategic synergy that promises to elevate our brand's retail excellence is created by the Product Assortment Optimization project's flawless integration with these guiding principles. This initiative provides as a timely and insightful response in a retail landscape characterized by dynamic transformations and the ever-evolving expectations of our varied client base. This strategy shift recognizes that adaptability and client responsiveness are key to our success. This effort enables us to customize our product range based on our customers' needs and preferences. It bolsters our mission while fortifying our agility in the ever-changing landscape of modern retail.
Speculation on Company Capabilities:
To embark on a project of this magnitude, we have diligently assessed our capabilities and affirmed our readiness to execute it with precision. Our exhaustive research, which drew insights from reputable sources such as Marketline.com, Yahoo Finance, and our investor relations pages, is the cornerstone of our confidence.
Our findings leave no room for doubt—this initiative is a seamless fit within Walmart's legacy of adaptability. We have thrived and excelled in navigating market shifts, and this project aligns perfectly with our proven ability to evolve with the times. Leveraging our formidable resources and unparalleled global reach, we stand uniquely equipped to address the ever-evolving demands of our diverse customer base.
Our ability to harmonize our extensive physical presence with cutting-edge digital solutions truly sets us apart. This distinctive capability positions us as a leader and a trailblazer in the fiercely competitive retail landscape.
Justification:
We anticipate this initiative will result in a substantial annual revenue gain for Walmart. Based on our projections and market analysis, we estimate an additional $2.5 billion in annual revenue due to the optimized product assortment. This figure is derived from the expected increase in sales, particularly in high-demand product categories. The revenue gain that we anticipate stems from several key drivers. Firstly, offering a more personalized and curated product assortment will enhance customer satisfaction and loyalty, ultimately driving sales growth. Secondly, our improved inventory management minimizes waste, reduces product obsolescence, and will lead to cost savings. These factors will contribute to an improved profitability outlook when combined with increased sales.
The return on investment (ROI) is a pivotal aspect of our justification, as it provides a concrete measure of the project's financial viability. While exact ROI figures will naturally evolve over the project's lifecycle, our preliminary estimates suggest an impressive 20& ROI potential over a conservative five-year period. We estimate an initial investment of $500 million required for the launch and implementation of the project. This projection is grounded in our analysis of anticipated outcomes, including increased sales, cost savings in inventory management, and improved supply chain efficiency resulting from the optimized product assortment planning. A 20% ROI over five years demonstrates a compelling business case for moving forward with the initiative, suggesting that the benefits will significantly outweigh the initial investment.
Enhancing the Mission:
This initiative projects profitability and directly enhances our company's overall mission. The Product Assortment Optimization project aligns with Walmart's mission to "save people money so they can live better." It achieves this by offering a wider range of quality products at affordable prices, enhancing the overall shopping experience for customers (Zacks Equity Research, 2023). Recent reports also demonstrate that our store renovations and smarter store initiatives have yielded robust comp sales, indicating profitability (Zacks Equity Research, 2023). This project reinforces our mission and ensures we meet customer needs while driving growth.
Conclusion:
In conclusion, Walmart's Product Assortment Optimization project aligns with our mission and strategy, leverages our strengths, and promises significant revenue benefits and ROI. It reinforces our customer-centric strategy and positions us for retail leadership. Our success depends on this initiative's focus on profitability and retail excellence. Thanks for your time, and I welcome questions and discussions regarding this exciting project.
Reference
Zacks Equity Research. (2023). Walmart (WMT) Continues to Stand Strong: Stock Up 20% in a Year. Yahoo Finance. https://finance.yahoo.com/news/walmart-wmt-continues-stand-strong-125700184.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAJcPCJPmZ-EnqMR4vA-0tN8N0s5tSTM37gR1NDSzQVgmIvwetPNIK9itRHeXxVJDEm115inmb4T9q6nZsf09XbEMrJsTWBULIHU3p-l3UxFbzbfpc77IQ13sR0D9nMC-263ZE09qbYgacLocYceLKYWfT4Ff134XASZkQJhzm7jc
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Business Model Canvas Template
Key Partners
Logistics and transportation partners
Technology and software providers
Marketing and advertising agencies
Regulatory and compliance authorities
Financial institutions and banks
Research and development collaborators
Franchisees or third-party retailers
Key Activities
Data Analysis and Market Research: Gather and analyze customer data and market trends.
Assortment Planning: Develop a tailored product assortment strategy.
Inventory Management Implementation: Integrate RFID pricing engine and electronic shelf labeling.
Product Curation and Selection: Curate products based on market demand.
Key Resources
Data Analysis and Market Research: Data analytics tools.
Assortment Planning: Cross-functional teams.
Inventory Management Implementation: Technology infrastructure.
Product Curation and Selection: Supplier collaboration.
Launch GoLocal Drone Delivery:
Value Proposition
Wide product selection: Offering a vast array of products across various categories to meet diverse customer needs.
Everyday low prices (EDLP): Providing consistently affordable pricing to save customers money.
Convenience: Offering a one-stop shopping experience, both in physical stores and online, for added convenience.
Quality assurance: Ensuring high-quality products to build trust with customers.
Customer-centricity: Focusing on customer satisfaction and needs, tailoring product offerings accordingly.
Customer Relationship
Assumption 1: Customers prefer personalized shopping experiences and are willing to share their data for tailored recommendations and promotions.
Assumption 2: Effective customer support and issue resolution contribute to higher customer satisfaction and long-term loyalty.
Channels
Walmart's primary sales channels include physical retail stores and e-commerce.
The physical retail stores serve as the core channel for in-person shopping.
E-commerce includes both the official Walmart website and mobile app.
Walmart also utilizes third-party online marketplaces to reach a wider audience.
Customer Segments
Budget-Conscious Shoppers
Families and Households
Tech-Savvy Consumers
Value and Quality Seekers
Online Shoppers
Business and Bulk Buyers
Cost Structure
Labor Costs: Assumed to include salaries, wages, benefits, and training expenses for employees.
Inventory Costs: Covering the purchase, storage, and management of products in stock.
Overhead Costs: Including rent, utilities, maintenance, and other facility-related expenses.
Marketing and Advertising Costs: Budget for promotional activities, advertising campaigns, and marketing materials.
Technology and IT Costs: Expenses related to software, hardware, and IT infrastructure.
Supply Chain and Logistics Costs: Covering transportation, distribution, and warehousing.
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Revenue Streams
Sales of physical products or goods
Subscription-based services or memberships
Licensing or royalties from intellectual property
Advertising and sponsorship revenue
Affiliate marketing or referral fees
Rental or leasing income
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BUSINESS MODEL CANVAS
JACOB WRIGHT
SOUTHERN NEW HAMPSHIRE UNIVERSITY
BUS-400: DRIVING BUSINESS OPPORTUNITIES
PROFESSOR WINKELHAKE
COMPANY: WALMART
LAST UPDATED: 29 SEPTEMBER 2023
UNIQUE VALUE PROPOSITION
Walmart's unique value proposition leverages the Blue Ocean Strategy by offering an expansive and cost-effective product assortment in physical stores and online stores. This strategy allows Walmart to cater to price-conscious consumers of all demographics. By providing a one-stop shopping destination with low prices, Walmart gains a strategic advantage in the marketplace, attracting a broad customer base and fostering customer loyalty.
1: KEY BUSINESS MODEL QUESTIONS: THE CUSTOMER
- Customer Acquisition: Walmart acquires customers through a multi-channel approach, including in-store foot traffic, online shopping, and marketing campaigns (Jindal et al., 2021).
- Delivery Channels: Walmart delivers products and services to customers through its extensive network of physical stores, an efficient supply chain, and a user-friendly e-commerce platform (Jindal et al., 2021).
- Customer Relationship Management: Walmart maintains customer relationships through various means, including personalized shopping recommendations, loyalty programs, and responsive customer service to enhance the overall shopping experience.
1(A): KEY BUSINESS MODEL QUESTIONS: THE CUSTOMER, CONTINUED
- Walmart employs a pricing strategy that offers competitive, low prices to its customers, catering to price-conscious consumers (Wood & Wood, 2023). Its revenue model relies on high-volume sales with thin profit margins.
- While specific revenue calculations require more data, Walmart's financial reports and sales data analysis enable it to estimate revenues for the next month, quarter, and year.
- Key activities for delivering value include efficient supply chain management, inventory control, customer service, and marketing to ensure the availability of affordable products and a seamless shopping experience.
2: KEY BUSINESS MODEL QUESTIONS: ASSETS, PARTNERS, AND COST
- Walmart's assets include a vast network of physical stores, e-commerce infrastructure, a well-established supply chain, and a strong brand reputation(Walmart, 2023).
- Key partners for Walmart encompass suppliers, logistics companies, technology providers, and various stakeholders in the retail ecosystem (Walmart, 2023).
- Cost structures entail operating expenses related to store maintenance, staffing, and logistics. Additionally, procurement costs are associated with sourcing products, while technology investments are made in e-commerce and digital initiatives to enhance the customer experience.
3: CREATE YOUR OWN BUSINESS MODEL CANVAS CHART
Key Partners
- Partnerships with a diverse range of suppliers, including local and international, to ensure a robust supply chain.
- Collaborations with technology providers for e-commerce and digital capabilities.
- Partnerships with logistics companies for efficient distribution and delivery.
- Engagement with community organizations to support DEI and CSR initiatives.
Key Activities
- In-store and online sales operations will require significant workforce.
- E-commerce platform maintenance and development.
- Regular inventory management and restocking.
- Marketing and advertising campaigns to promote the new product/service.
Key Resources
- Retail Stores
- E-commerce Platform
- Supply Chain
- Human Capital
- Supplier Relationships
- Financial Capital
Value Proposition
Value Proposition:
- Broad product assortment
- Competitive pricing
- Convenient shopping experience
- Multichannel accessibility
Risks to Business Model:
- Supplier relationships
- Competitive market
- Regulatory challenges
Strengthening the Business Model:
- Diversify supplier base
- Continuous market analysis
- Regulatory compliance measures
Customer Relationship
- Walmart will maintain a strong focus on customer satisfaction and loyalty.
- Utilizing digital channels for customer engagement and support will be a priority.
- Data analytics will be key in understanding and catering to customer preferences.
- A robust customer feedback mechanism will be in place to address concerns and improve offerings.
Channels
- Leveraging Walmart's extensive physical store network and e-commerce platforms as distribution channels.
- Utilizing online and offline advertising and promotions to drive customer traffic.
- Leveraging existing partnerships with suppliers and logistics providers for efficient inventory management and order fulfillment.
Customer Segments
- Diverse customer segments, including price-conscious consumers of all demographics.
- The product/service caters to a broad customer base seeking affordability and convenience.
Cost Structure
Operating Costs: Efficient store operations and supply chain management will help control operating costs.
Procurement Costs: Strong supplier relationships and bulk purchasing can minimize procurement expenses.
Technology Investments: Investment in e-commerce and digital initiatives can optimize technology-related costs.
Revenue Streams
- Revenue will primarily come from product sales both in physical stores and online.
- Additional revenue may be generated through subscription-based services like premium memberships.
- Advertising and promotional partnerships could contribute to revenue through sponsored content and placements.
- Strategic collaborations with other brands or retailers might result in revenue-sharing opportunities.
- Potential revenue from data monetization may exist, utilizing customer insights for targeted marketing and partnerships.
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4: CONSIDER YOUR BUSINESS MODEL
- Proceeding with this new product/service aligns with Walmart's core strategy of offering affordable products and expanding its customer base.
- The BMC chart indicates strong potential for revenue generation, particularly through the vast existing customer network and supply chain capabilities.
- Leveraging Walmart's existing assets, partnerships, and market presence enhances the feasibility of this endeavor.
- Risks to the Business Model:
- Risks include potential supply chain disruptions, especially if there are dependencies on specific suppliers (Gurtu & Johny, 2021).
- Competition from other retailers or e-commerce giants could impact market share and profitability.
- Changing consumer preferences and market dynamics may affect the success of the new product/service.
- Strengthening the Business Model:
- Establishing relationships with multiple suppliers can mitigate supply chain risks.
- Regularly analyzing market trends and adapting the product/service to evolving customer preferences can reduce risks associated with changing consumer behavior.
- Continuous monitoring of the SWOT analysis and proactive adjustments to the business model will help in risk reduction and long-term sustainability.
5: CLARIFY YOUR BUSINESS MODEL ASSUMPTIONS
| BMC Chart Item in Question | This Is a Fact. Here Is My Evidence: | This Is an Assumption |
| Collaborations with technology providers for e-commerce and digital capabilities. | Walmart can gain more from collaboration with technology providers and e-commerce. For example, the company can streamline its costs and supply chain. | |
| Potential revenue from data monetization may exist, utilizing customer insights for targeted marketing and partnerships. | X | |
| Investment in e-commerce and digital initiatives can optimize technology-related costs. | Walmart invests in e-commerce and digital initiatives to optimize technology costs. | |
| Efficient store operations and supply chain management will help control operating costs. | Walmart emphasizes efficient operations to manage its operating costs effectively. |
