Strategic Audit of Walton Hi-Tech Industries PLC

I. Current Situation
A. Current Performance

Walton began its journey in 1977 and ever since has relentlessly worked on providing us
with high quality electronic appliances. It is incredible how Walton has succeeded to
capture majority of the market by expanding their product line at a rapid pace. The
affordability of the products has also helped them target people from all over the country.
They have also succeeded in expanding in Africa. The objective of this report is to
breakdown its current strategies and business model in order to understand more about the
functions of the company. This will help us provide relevant recommendation to Walton
so that they can grow efficiently. Walton innovates to respond to the ever-changing
consumer and market demands through regularly developing its Research and Innovative
team and providing equality standards to people of all economic classes. Walton pioneered
to forge ACs and Fridges as regular household items to low and middle-income families
while those were considered luxuries in Bangladesh. WALTON’s motto is to prioritize our
customers’ demands through innovating all our existing and upcoming products through
extensive research and innovative brilliance.

The questions WALTON prioritizes are: what do our customers have, what do they need,
and is our solution affordable to them? With our dynamic quality and compliance
standards, WALTON scrutinizes its products to be pertinent to its customers’ expectations.
WALTON values the demand of its customers with utmost prominence and wavers its
production accordingly. Our R&I department is manifested of the most intelligent brains
in the country, who work tirelessly to innovate trendsetting appliances everyday with
maximal precedence to our customers.

1. The return on investment (ROI) of Walton Hi-Tech Industries PLC in 2022 was
28.2%.

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 2. The annual earnings per share (EPS) of Walton Hi-Tech Industries Ltd declined by
26% to Tk40.16 for the 2021-22 fiscal year (FY22), from Tk54.21 in the previous
year.
3. As of FY 2020-21, Walton earned a gross profit of BDT 1,648 crore with a margin
of 31% and net profit of BDT 820 crore with a margin of 15.3%.

B. Strategic Position
1. Vision
A good vision statement delineates management’s future aspirations for the
business and provides direction. It answers the basic question of ‘where we are
going’. In line with the definition, WHIL’s vision statement has been analyzed,
which is as follows- “To become an influential Global Brand within 2021and
working to reach as one of the World’s Top 5 brands within 2030 in the sector
of Electrical & Electronics”
2. Mission

For every successful organization, mission statement is very important.

Focusing on these statements strengthen the organizational operations &
answers why we should exist through-
 Innovation

 New Technology

 Competitive Price & Superior Quality

 Ensuring Consumer Satisfaction

3. Objectives
The main objective of the company is to increase the market share in related
diversified products and solutions in Bangladesh and to assure the potential
customers of the quality and durability of the products. Although the products
are a bit highly priced but it is the best bargain that money can buy.
 Increase market share

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  Grow revenue
 Improve profitability
 Launch new products
 Improve production efficiency
 Reduce costs

4. Strategies
‘Walton’ is now moving ahead with long-term strategies. The strategies
include setting up new production units, manufacturing new models of
products, establishing international standard testing lab to ensure highest
quality of the produced goods, expanding its export destinations, receiving
certificates from different countries in accordance with their individual
standards.
 Differentiation Strategy
 Cost Leadership Strategy
 Focus Strategy
 Expansion Strategy
 Sustainability Strategy

II. Strategic Managers

A. Board of Directors
 Chairman: S M NURUL ALAM REZVI
 Vice Chairman: S M SHAMSUL ALAM
 Managing Director & CEO: GOLAM MURSHED
 Directors:
o S.M. MAHBUBUL ALAM
o S.M. MONJURUL ALAM OVEE
o MS. TAHMINA AFROSE TANNA
o MS. RAISA SIGMA HIMA
o S M ASHRAFUL ALAM

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 o S M REAZUL ALAM

 Independent Directors:
o PROF. M. SADIQUL ISLAM, PHD, FCMA
o DR. AHSAN H. MANSUR
o SAMSUL ALAM MALLICK FCA
o DR. ZAKIR HOSSAIN BHUIYAN

B. Top Management

 CEO: GOLAM MURSHED

 CFO: MUHSMMED OMAR FARUK RIPON

 CMO: MOHAMMAD FIROJ ALAM

 CTO: MOG YANG EUN

The job of the top management-

o Setting the company's strategic direction

o Overseeing the company's operations

o Ensuring that the company complies with all applicable laws and
regulations

o Managing the company's finances

o Communicating with shareholders and other stakeholders

o Developing and implementing new products and services

o Managing the company's human resources

o Overseeing the company's marketing and sales efforts

o Managing the company's risk

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III. EXTERNAL ENVIRONMENT: OPPORTUNITIES AND THREAT
A. Natural Environment
 Sustainable materials availability. (O)
 Land availability. (O)
 Renewable Energy. (O)
 Green House Gas emission. (T)
 Electricity usage. (T)
 Oil and Gas usage. (T)
 Hazardous waste storage, transportation and disposal. (T)
B. Societal Economy
1. Economic
 GDP growth. (O)
 Market expansion. (O)
 Increased demand for technology products. (O)
 Access to capital and investment opportunities. (O)
 Cost savings through economies of scale. (O)
 Increasing commodity costs. (T)
 Intense competition. (T)
 Increasing transportation costs. (T)
 Currency fluctuations. (T)
 Regulatory changes and trade policies. (T)
2. Technology
 Rapid technological advancement. (O)
 Growing demand for electronics. (O)
 Government support. (O)
 Competition from foreign brands. (T)
 Intellectual property theft. (T)
 Lack of skilled manpower. (T)
3. Political-Legal
 Regional trade pacts are making free trade available between countries. (O)

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  Stable Political Environment. (O)
 Favorable Trade Policies. (O)
 Intellectual Property Protection. (O)
 Potential unionization of workforce. (T)
 Regulatory Compliance. (T)
 Trade Barriers. (T)
4. Socio-cultural
 Increasing Urbanization (O)
 Growing. Population growth. (O)
 Green environmental movement. (O)
 Increasing Consumer Diversity. (O)
 Shift in Consumer Values. (O)
 Social and Cultural Resistance. (T)
 Intense Competition. (T)
 Ethical and Social Responsibility Expectations. (T)
 International cultural differences. (T)
C. Task Environment
 Expansion opportunity in Europe, Africa, Canada, and Mexico. (O)
 Chance of new entrants low. (O)
 Purchasing power high. (O)
 Market saturation. (T)
 Rivalry High. (T)
 Substitute power high. (T)

EFAS Table for Walton 2022

External Factors Weight Rating Weighted Score Comments

Opportunities
International expansion 0.25 4.1 1.755 Reach new customers.
Growing middle class 0.05 1.3 0.065 Likely to purchase
products
Developing new products 0.1 2.5 0.25 Continue to invest

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Technological Advancements 0.1 2 0.2 Artificial intelligence and
machine learning
 E-commerce Growth 0.05 1.8 0.09 Available for purchase
online
Threats
 Intense Competition 0.1 2.6 0.26 Difficult to maintain
profitability.
Economic Volatility 0.05 1.6 0.08 Fluctuations in demand,
prices, and costs
Technological Disruption 0.1 2.1 0.21 Constantly changing
 Regulatory Environment 0.2 3 0.6 Result in fines or
penalties
Total Score 1.00 3.51

Table: EFAS Table for Walton 2023

IV. INTERNAL ENVIRONMENT: STRENGTH AND WEAKNESSES

A. Corporate Structure

 Strong brand image. (S)

 Innovative and technical experts. (S)

 Vertical integration. (S)

 Strong financial position. (S)

 Committed workforce. (S)

 Autocratic management style. (W)

 High fixed costs. (W)

 Competition. (W)

B. Corporate Culture
 Strong focus on customer service. (S)
 High employee morale. (S)
 Entrepreneurial spirit. (S)

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  Customer Focus. (S)
 Teamwork and Collaboration. (S)
 Resistance to Change. (W)
 Poor Communication. (W)
 Lack of transparency. (W)
 Work-life balance. (W)

C. Corporate Resources
1. Marketing
 Strong brand image. (S)
 Innovative marketing campaigns. (S)
 Strong social media presence. (S)
 Wide distribution network. (S)
 Weak Competitive Analysis. (W)
 Inadequate Digital Presence. (W)
 Inconsistent Marketing. (W)
2. Finance
 Strong financial position. (S)
 Experienced management team. (S)
 Effective risk management. (S)
 Innovative financial solutions. (S)
 Lack of transparency. (W)
 Overly centralized. (W)
 Lack of focus on long-term growth. (W)
 Inadequate risk management. (W)

3. R&D
 Strong track record of innovation. (S)
 Well-funded R&D budget. (S)
 International partnerships. (S)

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  Lack of focus. (W)
 Slow product development process. (W)
 Lack of market research. (W)
4. Operations

 Strong manufacturing capabilities. (S)

 Vertical Integration. (S)

 Wide Supply Chain Management. (S)

 Continuous Improvement. (S)

 Weaknesses:

 Lack of Scalability. (W)

 Dependence on Single Suppliers. (W).

 Inefficient Processes. (W)

 Quality Control Challenges. (W)

5. Human Resources
 Strong focus on training and development. (S)
 High employee morale. (S)
 Strong company culture. (S)
 Well-defined HR policies and procedures. (S)
 Lack of diversity. (W)
 Centralized HR function. (W)
 Lack of investment in HR technology. (W)
 High employee turnover. (W)

6. Information Systems
 Integrated systems. (S)

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  Data analytics. (S)
 E-commerce. (S)
 Customer service. (S)
 Security. (W)
 Cost and Legacy systems. (W)
 Lack of training. (W)

IFAS Table for Walton 2023

External Factors Weight Rating Weighted Score Comments

Strengths

• Diversified Business 0.25 3.4 1.65 Resilient to changes in the

Portfolio market.

• Innovative products 0.15 2.1 0.315 Competitive advantage in the

market.
• Market leadership as 0.05 1.5 0.075 Leading local brand
local brand

• Financial position 0.15 2.7 0.405 Ensure its long-term growth.

Weaknesses

•Limited International 0.25 2.6 0.65 Difficult to maintain profitability.

Presence

•Dependence on 0.05 1.1 0.55 Raw materials and

Import components.

•Limited Technological 0.05 1.7 0.85 Relies on foreign companies for

new technologies.
Innovation

•Governance and 0.05 1.3 0.065 Difficult for the company to

Transparency attract investors.
Total Score 3.3

Table: IFAS Table for Walton 2023

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V. Analysis of Strategic Factors:
A. Situational Analysis
1. Strengths
 Diversified Business Portfolio
 Financial position
 Market leadership as local brand
 Innovative products
2. Weaknesses
 Limited International Presence
 Dependence on Import
 Limited Technological Innovation
 Governance and Transparency
3. Opportunities
 International expansion
 Growing middle class
 Developing new products
 Technological Advancements
 E-commerce Growth
4. Threats
 Intense Competition
 Economic Volatility
 Technological Disruption
 Regulatory Environment
 Economic slowdown
 New entrants
 Changing consumer preferences

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 B. Review of Current Mission and Objectives

Based on the SWOT analysis provided, here is a review of Walton's current mission
and objectives:

Mission: Walton's mission is to "provide high-quality products and services to the

people of Bangladesh." This mission is clear and concise, and it reflects the company's
focus on quality and customer satisfaction.

Objectives: Walton's objectives could be improved by making them more specific

about the timeframes for achieving them. For example, the objective of becoming the
leading electronics company in Bangladesh could be changed to "become the leading
electronics company in Bangladesh by 2030."

 Become the leading electronics company in Bangladesh.

 Expand into new markets, such as India and Southeast Asia.
 Develop new products, such as electric vehicles and smart home appliances.
 Maintain a strong financial position.

VI. Strategic Alternatives and Recommended Strategy

A. Strategic Alternatives

1. Market Expansion: Walton can explore opportunities for market expansion by

entering new geographic regions or target segments, either domestically or
internationally.

2. Product Diversification: Walton can consider diversifying its product offerings by

expanding into new product categories or introducing innovative products that cater
to changing customer needs.

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 3. Vertical Integration: Further vertical integration within the value chain can be
explored by acquiring or partnering with suppliers or distributors to gain better
control and reduce costs.

4. Strategic Partnerships and Alliances: Walton can pursue strategic partnerships or

alliances with complementary companies to leverage each other's strengths and
gain a competitive edge.

5. Technological Advancement: Investing in research and development (R&D) and

embracing technological advancements can help Walton introduce innovative
products and processes, improving its competitive position.

6. Expand distribution channels: Walton could expand its distribution channels in its
current markets. This could include opening new retail stores, selling online, or
partnering with other retailers.

B. Recommended Strategy

1. Enhancing Customer Value: Focus on understanding and meeting customer needs

by delivering high-quality products, exceptional customer service, and personalized
experiences.

2. Digital Transformation: Embrace digital technologies and invest in e-commerce

capabilities to expand online presence, reach a wider customer base, and improve
overall customer experience.

3. Innovation and R&D: Continuously invest in research and development to foster

product innovation, stay ahead of market trends, and differentiate from competitors.

4. Sustainable Practices: Integrate sustainable practices throughout the organization,

such as eco-friendly manufacturing processes, responsible sourcing, and social
responsibility initiatives, to meet the increasing demand for environmentally
conscious products.

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 5. Operational Excellence: Strive for operational efficiency and continuous
improvement by streamlining processes, optimizing the supply chain, and adopting
best practices to reduce costs and improve overall productivity.

6. Joint ventures: Walton could form joint ventures with other companies in order to
enter new markets or develop new products. This would allow the company to
share the risks and costs of expansion.

7. Acquisitions: Walton could acquire other companies in order to expand its

product offerings or enter new markets. This would allow the company to grow
quickly and gain access to new technologies or brands.

It is important to note that these strategic alternatives and the recommended strategy are
provided based on general principles and may not reflect the specific needs or
circumstances of Walton. Conducting a comprehensive analysis and considering the
company's current situation, market dynamics, and available resources is crucial for
developing an effective and tailored strategy for Walton.

VII. Implementation

Identify opportunities to expand into new markets, either domestically or internationally,

by targeting untapped customer segments or geographic regions. Evaluate and optimize
pricing strategies to ensure products are priced competitively while maintaining
profitability. Consider factors such as market demand, competitor pricing, customer value
perception, and cost structures to determine optimal pricing levels. Streamline internal
processes and operations to improve efficiency and reduce costs. Identify areas where
productivity can be enhanced, eliminate wasteful practices, and implement lean
management principles to increase operational efficiency. Optimize the supply chain by
improving procurement processes, negotiating favorable terms with suppliers, and
implementing inventory management strategies to minimize costs associated with
sourcing, transportation, and inventory holding. Focus on building long-term customer

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relationships and enhancing customer loyalty. Implement customer retention strategies
such as loyalty programs, personalized marketing, and exceptional customer service.
Upselling and cross-selling to existing customers can also increase average transaction
values and overall profitability. Invest in effective marketing and branding initiatives to
enhance brand awareness, reach a wider audience, and increase customer acquisition.
Collaborations can result in shared resources, increased distribution channels, and cost-
sharing opportunities. Utilize data analytics and business intelligence tools to gain insights
into customer behavior, market trends, and operational performance. Make data-driven
decisions to optimize processes, identify growth opportunities, and maximize profitability.

Walton should recruit board members with more global business experience. As a leading
electronics company in Bangladesh, Walton is expanding its operations into new markets.
Having board members with global business experience will help Walton to navigate these
new markets and to make decisions that are in the best interests of the company. Board
members with global business experience can provide a broader perspective on industry
trends, emerging markets, and international business practices. Their insights can help
Walton navigate global challenges, identify new growth opportunities, and adapt to
changing market dynamics. Global business experience often includes dealing with
complex regulatory frameworks, compliance issues, and risk management in various
jurisdictions. Board members with such expertise can contribute to effective risk
assessment and mitigation strategies, ensuring Walton operates in accordance with local
and international laws and regulations. It's also essential to ensure a balance between global
business experience and a deep understanding of Walton's specific operations, markets,
and challenges. The ideal board composition will consist of individuals who can bring a
global outlook while also understanding the nuances of Walton's business and the local
market dynamics.

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VIII. Evaluation and Control

Identify and establish specific KPIs that align with Walton's strategic objectives. These
indicators should be measurable, time-bound, and directly related to the company's desired
outcomes. Examples may include revenue growth, market share, customer satisfaction
scores, profitability ratios, and operational efficiency metrics. Continuously monitor the
performance of Walton against the established KPIs. This can be done through regular
reporting, data analysis, and review meetings. It's essential to compare actual performance
against targets and track progress over time to identify any gaps or areas needing
improvement. Hold periodic strategy review meetings involving key stakeholders,
including senior management and the board of directors. During these meetings, assess the
progress of strategic initiatives, review performance against objectives, and discuss any
challenges or opportunities. This ensures ongoing engagement, alignment, and course
correction as needed. The final step is to implement the recommendations. This will
involve taking steps to improve the company's performance. The implementation of the
recommendations should be monitored to ensure that they are effective.

Some specific questions that Walton could ask to evaluate and control the strategic audit:

 Did the audit achieve its goals and objectives?

 Was the data collected relevant and accurate?
 Was the analysis of the data thorough and objective?
 Were the recommendations specific, measurable, achievable, relevant, and time-
bound?
 Have the recommendations been implemented and are they effective?

By asking these questions, Walton can ensure that the strategic audit is effective and that
the company is making progress towards its goals.

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