SWOT Analysis of Walmart
SWOT Analysis of Walmart
Strengths
4. Summary
5. This report is mainly a case study about Wal-Mart Stores, Inc.
(branded as Walmart), and also includes a comprehensive analysis
for the retail giant.
6. Firstly, there will be an analysis concerning values and philosophy of
business, logistic system, and information technology. Secondly, an
external environment examination will be given. It would be
discussed by market segmentation, Porter's Five Forces Framework,
because of the business philosophy of Wal-Mart, it would mainly
focus on the buying power and competitors of retail industry, there is
also one analysis regarding PESTLE follows. After that, a prospect of
future development of Wal-Mart would be given. To summary the
analysis above, it is a SWOT result of Wal-Mart.
7. In the next section, Wal-Mart's strategy for China market would be
mainly described. Because China market will be one part of the most
important market in Wal-Mart' Asia strategies, the recommendation
both on strategic level and business level would be made based on
all kinds of analysis for China market. Finally, there will be a
conclusion which will be a brief summary combined all analyzing
results and recommendations, and it is the end of this report.
8. SWOT analysis
9. Values and philosophy
10. The culture of Wal-Mart is simple but difficult to achieve - keep
price low to customers everyday, According to Sam Walton's belief,
there is only one boss: the customer, As a result, Wal-Mart earns the
sales, customers' unshakable loyalty, and I noticed a detail, which
showed the most vital advertising way of Wal-Mart is the world of
mouth communication of customers but not the regular ways. In
addition, because of the low price everyday, the price is quite stable
which can help easily predict the sales, therefore, the possibility of
out of stock and overstock is reduced. Sam Walton, he advocated
thrift, not only his personal life, but also the principle he did business.
Even he passed away, his spirit of questioning the cost of every
single item of expenditure had been deeply planted in the Wal-Mart,
and it became a culture.
11.Wal-Mart as a major retail business, knows the value of the customer
is not buying the amount of his time but his life will bring the total
spending of goods, including his own family and friends and word of
mouth effect. Customer satisfaction and corporate profits there is a
linear causal relationship, but also loyal customers and corporate
profits a positive relationship exists between the. Practice shows that,
for more than 90% of the firms, its source of profit for 1 / 10 brought
about by the general customers, 3 / 10 brought about by customer
satisfaction, while 6 / 10 brought about by the loyal customers.
Therefore, the enterprise has brought an important revelation,
bringing customers the greatest satisfaction, and then to win
customers.
12. So, Wal-Mart's service strategy, customer satisfaction is the
most important strategy. Customer satisfaction strategy is simple and
that is the need to stand in the position of consumer users, rather
than stand on the position of producers and consumers to consider
and deal with problems. And this customer first, always put the
customer first philosophy at the Wal-Mart from procurement to final
sales of goods as a whole.
13. For after-sales service, Wal-Mart has also done very well. In
the Wal-Mart store, a shopping more than a certain limit, you can
enjoy the delivery service. Wal-Mart customers in any store to buy
any commodity that can be returned to stores within a month, and
take back all the money. In comparison, for large retail stores with
Carrefour in Return the score is far lower than Wal-Mart. Carrefour
often adorned the walls of "promotional goods will not be refunded,"
the interests of consumers, which do not comply with provisions of
the law, even if it is normal product's return, in the Carrefour also
need a number of persons signature.
14. Wal-Mart to provide customers with "high-quality services" and
"unconditional refund" commitment is by no means nice slogan. In
the United States, Wal-Mart not hesitate to refund policies which will
ensure that every customer no worry. Wal-Mart has four refund
principles:
15. (1) If the customer is not a receipt - a smile to the customer
returns or refunds.
16. (2) If you are not sure whether Wal-Mart to sell such a
commodity - a smile to the customer returns or refunds.
17. (3) If the goods sold in more than a month - smiling, to the
customer returns or refunds.
18. (4) If you suspect that goods have been improperly used - a
smile to the customer returns or refunds.
58. Weaknesses
59. Wal-Mart is one international organisation; however its main
market is still within U.S, its oversea market share is not satisfactory,
for example, it encountered ALDI and Carrefour in Europe and
suffered big loss.
60. Although it acquired ASDA in UK and it seems the only success
in Europe market, ASDA still need to face a lot of other UK retailer
giants like Tesco and Sainsbury.
61. The history of oversea development is quite short.
62. Wal-Mart only covers a few countries in the world.
63. Opportunities
64. Oversea market is still the priority consideration for Wal-Mart,
like China (get more area coverage), East Europe, and South Africa.
65. If Wal-Mart can understand the characteristics of government
regulars and market running situation of potential market, it would be
helpful for Wal-Mart to enter new market.
66. Threats
67. All industries suffered from the financial criss and recession.
68. Wal-Mart is the No.1 Retailer in the world, which means all
other retailers are its competitors.
69. Wal-Mart's leading position would force other retailers form
alliances, which would make Wal-Mart new threatening rivals.
70. Wal-Mart encountered more and more critics concerning its
squeezing employees and suppliers
Weakness
Opportunities
1. To take over, merge with, or form strategic alliances with other
global retailers, focusing on specific markets. Example
bharti-walmart in India.
Threats
3 .
intaining its promise to customers of everyday low prices, Wal-Mart has
injured many of its
4. competitors. A new
Wal-Mart SuperCenter
opens up about every
38 hours (McNally,
2005). Although
5. Wal-Mart, like any
other firm,
experiences problems
and challenges in the
workforce, it continues
to
6. thrive because they
learn from their
experiences and
change or adapt
accordingly. Wal-Mart,
in 1962, opened its
first
7. Wal-Mart Discount
City and now it sells
more toys than Toys
R Us, more clothes
than the Gap and
Limited, and
8. more food than
Kroger and a few other
supermarkets
combined (Upbin,
2004). If Wal-Mart was
its own economy, it
th
9. would rank 30 right
next to Saudi Arabia
while growing at the
rate of about 11%
each year. The Wal-
Martization
10. of the world is
bringing about good
and bad changes to
commerce around the
globe. Wal-Mart is
expected to be the
11. first trillion dollar
retailer in the world.
12.
13.U
1 4 .
With annual sales of about $300 billion, around 68% of the sales come
from Wal-Mart Stores, 19% from its
15. international
operations, and 13%
from its Sams Club.
Wal-Marts annual
profits are about $10
billion and they have
16. a market value of
over $250 with assets
worth over $105
billion. As of April
2005, in addition to its
approximately
17. 4,000 stores in the
United States, Wal-
Mart had over 815
stores in Mexico, 393
stores in Japan, 322
stores in United
18. Kingdom, 278
stores in Canada, 85
stores in Germany, 54
in Puerto Rico, 60 in
China, 293 in Brazil, 16
in South
19. Korea, and 12
stores in Argentina
while expanding into
these countries on a
continuous basis.
Currently, it employs
20. over one million
people in the United
States and nearly half
a million individuals
internationally; it is the
largest
21. private employer
worldwide.
Furthermore, it ranked
th
10 on Forbes Leading
2000 Companies in the
World based on
22. composite scores
for sales, profits,
assets, and overall
market value. As a
matter-of-fact, Wal-
Mart ranked first in
sales,
23. ranked sixth in
total market value, and
they ranked eight in
overall profits through
Forbes ranking of
Worlds 2000
24. Leading
Companies in Forbes
April 12, 2004 issue.
25.
26. To capitalize on the
global opportunities,
Wal-Marts
international division
will need to take action
on several
27. different fronts,
ranging from
enhancing its global
procurement
capabilities to entering
new countries. Despite
the
28. challenges, Wal-
Mart will undoubtedly
emerge as a truly
global retailer. That
should mean leading
market positions in
29. Europe, Japan, and
emerging markets -
places where Wal-
Marts presence is
limited today.
Competitors and
suppliers
30. around the world
will need to prepare to
compete in markets
that will be shaken and
remade by Wal-Marts
global
31. expansion (Wal-
Mart International: The
Challenge Abroad,
2006)
Walmarts SWOT analysis gives insights on the internal and external
forces significant in the companys strategy development in the retail
industry. While these factors vary over time, Walmarts growth depends
on the firms ability to capitalize on its strengths. Also, in spite of the
companys weaknesses, its strengths are far more significant
considerations. Walmart can use these strengths to exploit its
opportunities in the retail market. The firm can also use its strengths to
counteract the threats to its business. These are important factors in
ensuring Walmarts continued leadership as the biggest retailer in the
world.
1. Aggressive competition
2. Healthy lifestyle trend
3. Small-scale/individual online selling
The healthy lifestyle trend is a threat and an opportunity. It threatens
Walmarts business because many of the companys goods are not
healthful, organic or natural. It is an opportunity for Walmart to improve
its quality standards. However, this factor is more of a threat because the
firm currently does not prioritize healthful products in its stores.
Aggressive competition is a threat because other large retailers could
use aggressive marketing and strategies to capture some of Walmarts
customers. Small-scale or individual online selling is a threat against the
companys retail business. Because of the Internet, small sellers or
individuals can bypass Walmart and use their own websites to sell
products to online consumers.