Walmart is the world’s leading retail company. It markets and operates as a discount chain. The firm was Sam Walton founded firm and he had an approach of selling products at the cheapest price in the market, thus cutting down his profit margin, but chose to depend on large sales volume to make good profits. The firm began its operations in early 1960s when it opened its first outlet in Arkansas, United States. Currently, Wal-Mart, Inc. owns more than 5000 stores globally, with around 3200 stores located in the U.S. The company owns 900 stores in the Americas excluding the United States, 350 across Europe, and 440 in the Asian region. In this case, the paper looks forth to the SWOT analysis of Wart, touching on its strengths, weaknesses, opportunities and threats.
Strengths
Babu (2012), highlights the following as the strengths of Wal-mart:
The company has an established brand name which is popular for cheap prices in retail business.
It is the preferred destination for many individuals when low on budget and still want to meet their shopping wish.
The firm has a broad network of outlet, thus it is accessible to all classes of people; upper, middle and lower.
The company can purchase in bulk, thus it possesses a huge bargaining power hence benefitting from large discounts which are not available to other enterprises. Therefore, it can pass these discounts and pricing advantage to customers, and finally cementing its reputation as a bargain outlet.
The entity deals with all types of merchandize from electrical appliances, clothes, jewelry, garden machines and equipment, hence taking care of needs of many people.
Weaknesses
Additionally, Babu (2012) espoused the following as the weaknesses which hinder Wal-Mart:
The past few years has witnessed the firm face a lot of litigation from its workers accusing its management of unfair employment practices particularly women employees, thus giving the firm a bad reputation as an employer.
The enterprise has a earned a lot of negative publicity from its strong-arming strategies and squeezing of vendors of profit margins by threating to work with different suppliers.
The goods supplied by Chinese companies and sold by Walmart have been marred with issues of safety and health hazards.
The Chinese outlets of the company have had challenges establishing themselves in the country because of several limiting government policies.
The company has had a lot of legal issues because of the court cases challenging its efforts of barring its workers from joining trade unions.
Opportunities
According to Cousins, English & Meng (2015), the following are some opportunities at Wal-Mart’s disposal:
The economic crisis reduced the disposable income of many people, and thus compelled individuals and households to lessen their expectations and look for bargains, thus making Wal-Mart a destination of choice.
The inflation rates in the economy is reducing and economies of various regions are on the brink of recovery, thus Wal-Mart stands a chance of giving more bargains, thus increasing its customer base.
Many retail enterprises are quitting the market because of reduced disposable income. In such a situation Wal-Mart stands a chance to benefit because of increased customer base.
The ability to purchase goods from suppliers at cheap rates, makes Wal-Mart capable of offering customers large bargains to encourage them make their purchases.
Increased internet connectivity means that Wal-Mart can increase its reach to many people through its online platform, thus it needs to diversify in this line of business.
The company need to consider expanding its operations to the African continent to take advantage of the large population and cheap labor thus increases its profits further.
The firm needs to improve on the human resource issues.
Improvement in quality standards is another area which presents an opportunity to Wal-Mart.
It has an opportunity of partnering with local companies in developing economies.
There are opportunities to continue operating in large superstores.
Threats
Hassan Sistani & Raju (2014), discuss the following as the threats which Wal-Mart face in the market.
The big retailers such as M&S are giving massive discounts such 50% off sales. This a challenge for Wal-Mart because it has very small profit margins on every product.
The decline in disposable income of clients and fears of job losses has compelled individuals to reduce their shopping habits. Such turn of events is a threat to Wal-Mart because the company depends on consumer expenditure to run its businesses.
Individual/small-scale online business.
Many people are opting to lead a healthy lifestyle.
There is aggressive competition from other retailers in the market.
The stronger dollar in the internationally hinders profits.
Chinese regulations are a threat to Wal-Mart because there are a lot of difficulties in opening and expanding foreign business in the country.
The several legal issues which has been facing the company especially from its employees is a big threat because it taints its reputation, and therefore may compel some buyers to shun off from shopping from Wal-Mart stores.
Technology is a big threat because several electronic products are becoming obsolete very quickly in the current setup. The technological issue can make the company make a lot of losses even some electronic products which do not sell fast are deemed not of good quality and yet they are already stocked in the company’s premises.
The competitive salaries paid by competitors may make many current and potential employees to choose rivals as preferred place of work thus make it difficult for Wal-Mart to get employees who can work in outlets globally.
Conclusion
The SWOT analysis reveals that Wal-Mart need to exploit its strengths to take advantage of the opportunities at its disposal on the global scale. The company’s threats and weaknesses should come second in priority. Additionally, Wal-Mart should improve its human resources practices to better its corporate performance. Further, the firm should consider expanding its operations in developing countries to tap economic opportunities in these regions.
References
Babu, H. S. (2012). SWOT analysis for opening of FDI in Indian Retailing. European Journal of Business and Management, 4(3), 55-65.
Cousins, T., English, J., & Meng, Y. (2015). Burleson County State of the Community Report. Texas A&M University.
Hassan, S. M., Sistani, A. J., & Raju, R. S. (2014). Top Online Shopping E-companies and their Strength and Weakness (SWOT). Research Journal of Recent Sciences
