Introduction
Walmart Corporation is an American multinational retail corporation that operates in a chain of departmental stores, grocery, and hypermarkets. The company is currently the largest retail store in the world ( Chekwa, Martin & Wells, 2014 ). The company was first founded by Sam Walton in 1962 with a single store but later expanded to areas outside Arkansas and to the rest of the southern parts of the United States. Other than the United States, the company operates in other countries such as Canada, Mexico, and the United Kingdom and many other nations totaling 200. The major products are electronic, groceries, health and beauty, home and furniture, clothing and footwear among many other products. Some of the major competitors of Walmart are Amazon, Target, Best Buy, and Costco companies.
SWOT Analysis
Strengths
Walmart has established itself as a brand name all over the world. Due to its brand name, many people identify with it and prefer to purchase from Walmart. Due to the brand name, the company has dominated the industry for years, maintaining a competitive advantage over the other rivals ( Stankevičiūtė, Grunda & Bartkus, 2012 ). The recognized brand name has provided the company with the opportunity to penetrate all the markets and increase their revenue generation and maximize their profitability. The global size of the company is also a strength to Walmart. Due to its larger size with operations in many countries, the company has dominated most customers across the world compared to its competitors who have minimal global reach. Its large size also means it has a strong financial base to fund the growth and expansion to many other regions across the world. A third strength of Walmart is its technologically advanced information system for tracking inventory, sales and customer relationship thus making it easy for the firm to manage its many operations in different countries across the world. The technologically advanced information system ensures that the effective and timely decisions are made on time to maximize the sales and prevent overstocking. The company has also formed a large customer base over the years making it dominate the market and an increase in its revenue generation. Its excellent infrastructure has ensured that the company records a sharp growth in recent years thus increasing its stand in the market and improving its competitive advantage over the rival firms within the industry.
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Weaknesses
Walmart has a weak HR record. The company has been experiencing a lot of lawsuits emerging from its mistreatment of the employees and failing to follow the employment laws. These lawsuits are a cost to the company due to fines and other charges that come with the legal presentation in the courts. There are a lot of complaints from the employees on the claims of unequal wages, unpaid overtime, poor benefits, and poor working environment. These tend to tarnish the name and brand image of the company to its customers and could result in some customers shifting to the competitors who fairly handle workers. Another weakness of Walmart is its thin profit margin. The company relies on the cost leadership strategy by minimizing its selling price and relying on the sales volume to make profits ( Horst, Raj &Brinkley, 2016 ). This makes the company have a thin profit margin compared to its rivals within the industry. As a result, the company sometimes experience low profits when sales are low and then try to compensate by paying its employees less. This has led to the damage of the reputation of the firm against its customers.
Opportunities
Walmart has an opportunity to improve its HR policies which have been giving it many challenges and tarnishing its brand image. There is a growing concern for the businesses to have HR policies that respect the rights of employees as well as the labor laws. Businesses which will not have better HR policies in the future may risk losing to rivals. This is an opportunity that Walmart can focus on to ensure that it has better policies that will motivate employees to perform to their level best. Walmart also has an opportunity to expand into the merging Asian markets as well as markets in the developing countries ( Michelson, 2013 ). Business competition is increasing, and therefore Walmart can take advantage of its brand image to penetrate other regions where it has not reached. Asian markets and markets in the developing countries are excellent opportunities for Walmart to increase its revenue and add more customers. The company can also form a strategic alliance with other global companies from other regions and focus on a specific market to increase its market coverage. The strategic alliance is becoming one of the business strategies that firms use to reach specific markets and increase their sales volume.
Threats
There is an ongoing stiff competition within the retail store sector as many new firms join annually. These new firms are coming with better offers for the customers, and in the future, Walmart could face serious competition from its rivals in the industry, something that could affect its sales volume and reduce profitability. Competition poses a major threat to Walmart especially from other giant rivals such as Amazon and Costco ( Merriman et al., 2012). Another threat that Walmart faces is the political instability in the countries where it operates, and this could affect the profitability in the future. The rising political tension in these countries threaten the operations and slows down growth. Also, the dollar has constantly grown stronger against other currencies, and this could affect the profitability of the company in the international divisions.
References
Chekwa, E., Martin, J., & Wells, K. (2014). Riding on the waves of sustained competitive advantage: consumers’ perspectives on Walmart Corporation. International Journal of the Academic Business World , 8 (2), 13-25.
Horst, M., Raj, S., & Brinkley, C. (2016). Getting Outside the Supermarket Box: Alternatives to" Food Deserts". Progressive Planning , (207).
Merriman, D., Persky, J., Davis, J., & Baiman, R. (2012). The impact of an urban WalMart store on area businesses: The Chicago case. Economic Development Quarterly , 26 (4), 321-333.
Michelson, H. C. (2013). Small farmers, NGOs, and a Walmart world: Welfare effects of supermarkets operating in Nicaragua. American Journal of Agricultural Economics , 95 (3), 628-649.
Stankevičiūtė, E., Grunda, R., & Bartkus, E. V. (2012). Pursuing a cost leadership strategy and business sustainability objectives: Walmart case study. Economics and Management , 17 (3), 1200-1206.
