Paper 1

Strategic Initiative: Wal-Mart

Team A

Finance for Business - FIN/370

September 13th, 2010

Frederick Schutz

Wal-Mart

The financial planning process is planning that begins with long-term, or strategic, financial plans that in turn guide the formulation of short-term, or operating plans and budgets. Thus strategic planning, determining where an organization is going over the next year or more and how it is going to get there, is a large part of the financial planning process. Wal-Mart has always been steadfast in large strategic initiatives; this had a strong impact on their financial planning. In addition, this initiative affected both costs and sales. There were also risks associated with the initiative and a financial impact due to these risks.

Strategic Planning Initiative: Latin American Growth

Over the years Wal-Mart has made many opportunistic moves; however, they have always been steadfast in large strategic initiatives rather than piecemeal grabs at new directions. Wal-Mart began their strategic international growth plan in 1991 when they opened their first Sam’s Club near Mexico City. Just two years later, Wal-Mart International was created. Today, Wal-Mart International is a fast-growing part of Wal-Mart’s overall operations, with 4,108 stores and more than 664,000 associates in 15 countries outside the continental U.S. (Wal-Mart, 2010). Most of the international stores fly a different banner and function to fit within local needs, desires, and customs; nonetheless, the mantra remains the same-“Save money, live better”.

The most recent strategic plan at Wal-Mart International was its acquisition of Distribución y Servicio – D&S – in Chile. This initiative was announced in the 2009 annual report as another link in the Latin American footprint (Wal-Mart, 2009). Wal-Mart has had a stronghold in Mexico for sometime; but Central and South America has always lagged. This changed when the Central and South American growth initiative began in...