Section One
Walmart Inc. is among the numerous multinational retail corporations founded in America operating chain stores. Sam Walton founded the company in 1962 later spreading its operations to other countries in the world. The company prides itself in being the largest company in the world by revenue as well as being the leading private employer globally ( Panmore Institute, 2017) . The multinational corporation’s mission statement stands out as working “to save people money so they can live better”. According to the mission statement, it can be argued that the company employs business strategies revolving around pricing such as having low prices in order to achieve competitiveness.
It is worth noting that the corporation largely embeds its operations in a cost leadership generic strategy. Additionally, Walmart is enabling the access of its products through eCommerce in efforts to connect better with customer subsequently providing exciting ways for shopping ( Panmore Institute, 2018) . The mission statement of the multinational organizations is seen to be in tandem with the cost leadership strategy noting that it strives to reduce costs with the ultimate objective of achieving financial advantage ( Bhasin, 2018) . Subsequently, the company rides on the mission statement to attract the target customers who find Walmart as their preferred shopping destination due to the low pricing.
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Section two
Opportunities
In the business world, opportunities for growth are critical to enhancing financial success for companies ( Lasserre, 2017) . The business environment in which Walmart operates has numerous opportunities for growth. Walmart Corporation has opportunities which are mainly focused on improving business practices in addition to an expansion of the organization. One of the most notable opportunities for the corporate giant is expanding operations in developing countries ( Panmore Institute, 2017) . Developing countries have high-growth economic conditions that Walmart can tap into to earn more revenue. Under the global expansion, the multinational corporation is better positioned to expand given that it has to a great extent saturated domestic markets. Furthermore, studies have shown that the American population is only four percent of the global population, therefore, expanding to other markets provides an opportunity to reach out to the remaining ninety-six percent of the world’s population.
Another significant opportunity in Walmart’s business environment is in the improvement of quality standards for products ( Panmore Institute, 2018) . According to recent studies, customers are increasingly becoming sensitive to what they are consuming. There is an increasing need to be assured of the safety of the products as well as the ingredients used in making those products. In light of this, Walmart Inc. is working towards offering more information about products to consumers with the ultimate objective of rendering the decision-making process easy and transparent for customers. Opportunities to work with government agencies, as well as other industrial players, will work to improve competitiveness for the company noting that more customers will be attracted subsequently raising financial returns.
Threats
Continuous studies have shown that Walmart like any other business is being faced by threats. One of the significant threats facing the multinational company according to Bhasin (2018) is aggressive competition especially from larger retailers such as Amazon. As a matter of fact, Amazon has ensured competitiveness through low pricing as well as convenience noting that Amazon uses user-friendly website making customers make purchases even from third parties. Additionally, according to Panmore Institute (2018), Alibaba Company has expanded into the eCommerce both in wholesale and retail consequently providing imminent competition to Walmart Inc. Amazon and Alibaba companies have invested heavily in online marketing and purchasing posing as a great threat to Walmart.
Furthermore, an emerging healthy lifestyle trend is working to threaten the operations of Walmart Inc. Numerous studies have determined that a considerable percentage of products sold by Walmart are not organic, healthful, or natural. Most notably, the company has not prioritized the sale of high-quality products. As many customers demand quality products, corporate organizations that are not keen on offering quality are increasing losing customers ( FitzRoy, Hulbert & O'Shannassy, 2016) . By failing to offer quality products, Walmart is bound to lose brand loyalty from customers as well as declining returns on investments.
Section three
SWOT chart
| Strength | Weakness | Opportunities | Threats |
|
Walmart’s global organizational size. Effective supply chain. |
Thin profit margins. Business models can be easily copied. |
Expanding operations in developing countries. Improvement of quality standards for products. |
Aggressive competition. Emerging healthy lifestyle trend. |
Strengths
Studies by FitzRoy et al., (2016) indicate that business strengths are critical in ensuring business success and profitability. Walmart Company has a variety of strengths that are useful in enhancing the organization to withstand possible threats within the environment in spite of the weaknesses that the company possesses. Research into the corporate organization has pointed out that Walmart's global organizational size is among the significant strengths that the company has ( Panmore Institute, 2018) .
The size of Walmart is proving useful in making it possible for the multinational company to fund expansion and growth. The fact that the company is significantly profitable makes sure it has "deep pockets" to assist the organization to roll out expansions without stretching on a financial basis. The ability to fund expansion and growth has a significant impact on other companies noting that they might not be in a position to keep up with the company’s financial muscle to counter growth into new markets ( Lasserre, 2017) .
Another notable strength at the disposal of Walmart is its supply chain that stands out as highly efficient. Numerous studies allude to Walmart having an excellent supply chain with the company building distribution centers that are strategically positioned to meet online shopping demands ( Marshall, 2017) . Despite the organization maintaining traditional supply chain management, there has been growth and improvement of the supply chain with the ultimate objective of sustaining the company’s supply chain. To ensure that the supply chain is efficient, Walmart is investing heavily in technology as a way of managing the company’s supply chain. Efficient supply chain management has a lasting impact on Walmart by creating customer loyalty since consumer products will always be available. Companies such as Amazon and IKEA are bound to feel the impact of Walmart’s effective supply chain.
Weaknesses
Business weaknesses create challenges for corporate organizations making it challenging to withstand threats ( Marshall, 2017) . A notable weakness that Walmart faces is thin profit margins. As noted earlier, Walmart has primarily adopted cost leadership as a pivotal strategy for its operations. Having minimized selling prices makes Walmart Inc. depend more on having high sales volume to ensure profitability which has an adverse effect of minimizing profit margins. Cutting down prices has been advised by the competition from discounters that include Aldi Inc. and Lidl companies from Germany that is quickly expanding in the American market ( Bhasin, 2018 ). Moreover, thin profit margins can be argued to emanate from intense investments in the e-commerce platforms. Thin profit margins at Walmart have led to the company’s shares falling by more than two percent. Falling share values are seeing investors shrugging off posing more danger to the long term operations of the organization ( Bose, 2017) .
Walmart’s business models can be easily copied noting that the organization lacks competitive differentiators. Upcoming wholesale and retail outlets are copying Walmart’s business model threatening the long term success that the company has had over the years. Additionally, the adopted cost leadership strategy is easy to copy rendering the company prone to price wars from other retail and wholesale outlets. Corporate organizations such as Trader Joe’s and Costco have crowded Walmart’s space making the multinational company prone to aggressive competition.
Section four
Leveraging on strengths
Walmart Inc. can leverage its strengths to ensure that it remains on the path to success over the long term ( Panmore Institute, 2017) . Walmart’s can make its global organizational size count through making strategic alliances with other international corporations. Additionally, according to Panmore Institute (2018), it is prudent and worthwhile for Walmart to be culturally sensitive when expanding to foreign markets in such a way that local customer base becomes content with making purchases from the multinational corporation.
Furthermore, working to maintain effective supply chain management can be improved further. Business experts confirm that undertaking forward and backward linkages in the supply chain is a crucial strategy for controlling the supply chain ( FitzRoy et al., 2016) . Making acquisitions with companies that supply Walmart with products for sale can be integral in maintaining the effective supply chain. Additionally, the multinational company can start operations to produce some of the products for sale.
Solutions for company weakness
As noted earlier, Walmart has been suffering thin profit margins. Remedying the reducing profit margins can be a tedious process especially with the increasing competition ( FitzRoy et al., 2016) . Subsequently, Walmart would be better placed to recover from reducing profit margins by creating economies of scale. Achieving this objective will require that the organization observes, analyzes, and evaluates its system to determine various areas whose processes can be consolidated as a way of saving money and time. By consolidating processes, an organization is able to generate revenue from production improvements ( Lasserre, 2017) . Moreover, the organization can trim the wastage of resources in the business operations such that the lowest costs of production are achieved.
Efforts to differentiate Walmart’s business model would come in handy to overcome the weakness. One of the significant ways to differentiate business models is undertaking a relationship differentiation ( Bose, 2017) . The differentiation enables companies to create a customer interface that demonstrates efficiency, courtesy, competence, responsiveness, and credibility. Customers experiencing the relationship differentiation are bound to become loyal to an organization. Moreover, the organization can adopt a service differentiation noting that the services offered in a Walmart store situated in Georgia are similar to services from a store in Texas. Therefore, the organization can invest in differentiating services through customer service, delivery of products as well as other business supporting elements that may include ease of ordering and installation.
References
Walmart SWOT Analysis & Recommendations - Panmore Institute. (2017, January 16). Retrieved from http://panmore.com/walmart-swot-analysis-recommendations-case-study
Walmart's Mission Statement & Vision Statement, Generic & Intensive Strategies - Panmore Institute. (2018, August 22). Retrieved from http://panmore.com/walmart-vision-mission-statement-intensive-generic-strategies
Bhasin, H. (2018, June 14). Top 19 Walmart Competitors - Competitor analysis of Walmart. Retrieved from https://www.marketing91.com/walmart-competitors/
Bose, N. (2017, August 17). Wal-Mart's profit margins fall; quarterly outlook disappoints. Retrieved from https://www.reuters.com/article/us-walmart-results-idUSKCN1AX172
FitzRoy, P., Hulbert, J. M., & O'Shannassy, T. (2016). Strategic Management: The Challenge of Creating Value . Routledge.
Lasserre, P. (2017). Global Strategic Management . Macmillan International Higher Education.
Marshall, K. J. (2017). Good Stocks Cheap: Value Investing with Confidence for a Lifetime of Stock Market Outperformance . New York, NY: McGraw Hill Professional.
