When India’s laws change and allow Wal-Mart to sell to consumers, it will have to compete with the retailers it supplies.Īn identity provides executives with direction and focuses attention on opportunities and threats. Besides being unfamiliar, the strategy contains the nucleus of another problem.
In India, local laws don’t allow foreign companies to operate multibrand retail outlets, so Wal-Mart has had to develop a special business model: cash-and-carry wholesale stores for local retailers. It has found the going tough there, however. Alternatively, Wal-Mart could enter a fast-growing emerging market, as it has done in India. To prevent that, Wal-Mart must first modify its value proposition, stock some upscale products, and develop a brand persona that warrants higher prices-challenges that have little to do with boosting profits immediately. If consumers resist higher prices, the retailer’s sales will fall and profits will drop. It could boost profits by hiking prices, but until now, everyday low prices have helped the company fend off rivals. The problem is difficult to come to grips with and changes with every attempt to address it.Ĭonsider two of the least complex options before Wal-Mart. Moreover, Wal-Mart’s deep roots in rural America are of little use in overseas markets. Its supply chain expertise doesn’t help in the case of fashion and organic products, and its low-price image hurts its ability to sell upscale products. Its low-cost sourcing practices have rendered it vulnerable to the health and safety concerns that surround products made in China. For instance, Wal-Mart’s large market share in some product categories makes it tough to grow same-store sales rapidly. Compounding the challenge, some of the company’s advantages have turned into disadvantages. All this has generated unfavorable publicity and strengthened people’s opposition to Wal-Mart’s opening stores in urban areas. Wal-Mart also faces resistance to imports, criticism about the wages and benefits it offers employees, and charges that illegal aliens work in its stores. is a consequence of, among other things, a saturated market, its customers’ limited disposable incomes, and intense competition from rivals such as Target and Costco. I’ll conclude by describing a planning process that helps PPG Industries tackle wicked issues. Based on these studies, I’ll explore in the following pages how companies can tame-since they can’t solve-such problems. Third, a colleague, Gaurab Bhardwaj, and I tracked DuPont’s pharmaceuticals business to learn how companies draw up strategies when returns will accrue only in the long run and are highly uncertain. Second, I studied strategy implementation in depth at seven of these enterprises. They include ABB, Alcoa, Honeywell, John Deere, PPG Industries, Royal Dutch Shell, Siemens, Sprint, Whirlpool, and Xerox (China and USA). First, as part of benchmarking projects that the APQC (formerly known as the American Productivity & Quality Center) and the Hong Kong Productivity Council conducted, I analyzed 22 North American, European, and Asian enterprises that use innovative strategic-planning techniques. Between 19, I completed three research projects that provided insights into wicked strategy problems.
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