SWOT Analysis of Walmart Corporation

 

Description of Walmart Corporation

Walmart Corporation is an American multinational retail company, which is headquartered in Bentonville, Arkansas. Sam Walton founded the company in 1962 before overseeing its incorporation in 1969. It operates in 27 countries and runs over 11,000 stores in these countries (Copeland and Labuski 22). The company is guided by the mission ‘saving people money so they can live better.’ The vision of Walmart Corporation is to become the best retailer all over the world. The company’s key values include responsibility, integrity, purpose, community, and opportunity. It is worth noting that Walmart is the largest public corporation around the world and the largest employer with an estimated two million employees. It is a family owned business that has continued to grow over the years since first trading on the New York Stock Exchange in 1972.

The current paper describes strengths, weaknesses, opportunities and threats facing Walmart Corporation.

Strengths

  • The company has a wide range of products that are offered at competitive and affordable prices to consumers. It has the capacity to offer its consumers a one-stop purchases experience because of the diversity of products ranging from electronics, grocery, home needs, and other required products (Massengill 36).
  • It is financially stable because of its international operations. The company receives large sums of cash in terms of sales from its stores including Sam’s Club, Walmart Supercenter, Walmart International, and Walmart Express. For instance, it generated $153 billion from international branches in 2013 (Copeland and Labuski 37).
  • Walmart Corporation has reliable information systems. Competent information systems at Walmart Corporation have been vital in ensuring that it saves costs as order taking, inventory control, and sales are done automatically. It enhances its prosperity.
  • It operates on large scale hence enjoying benefits relating to economies of scale. Accordingly, Walmart enjoys economies of benefit because of its large scale operations with more than 11,000 stores across 27 countries.

Weaknesses

  • The company has a poor track record relating to the treatment of employees and suppliers. Walmart Corporation has had to face several law suits relating to the mistreatment of its employees. This leads to losses because of high legal costs associated with such cases (Kipple 44).
  • Walmart Corporation experiences high employee turnover that negates its operations. The company has a high rate of employee turn-over that makes the company incur extra costs in the hiring of new employees. High employee turnover emanates from poor pay at the company.
  • The company has minimal differentiation that makes it difficult to compete effectively. Walmart’s differentiation is extremely little and cannot be compared to competitors such as Target (Copeland and Labuski 74). As a result it affects its competitive advantage in the retail market.
  • The company suffers from negative publicity as people question its activities such as widespread bribery and unethical treatment of employees. The company’s structures tend to attract negative publicity because of their tendency to encourage unethical activities.

Opportunities

  • The company has an opportunity for international growth. It is worth acknowledging that the company has continued to be exposed to new retail markets that indicate its growth. For instance, markets have continued to open up in Asia and Africa as growing economies pick up (Kipple 53).
  • Emerging technology offers opportunities for the growth of the company and adoption of cost-saving activities. Continuing global technological developments are opportunities because they would enable the company to manage its employees and inventory in the easiest manner possible. For instance, employee portals brought about by technology would make it easier for the company to manage employees.
  • There are opportunities for partnerships with companies from other industries hence boosting its operations and reputation (Massengill 65). The company has an access to partnerships with other popular companies. For example, the company has joined hands with Apple Incorporation and this has boosted its activities.
  • The company has an access to a large consumer base. Consumers have continued to grow over the years as the company intensifies its marketing activities. It is a positive sign because of the profits that await Walmart Corporation.

Threats

  • Walmart experiences the threat of increased competition from other established retailers. Other large retailers such as Target, Costco, Tesco, and Amazon have offered Walmart stiff competition hence negating its growth potential and profitability (Kipple 81).
  • Economic downturns have continued posing a threat to the company’s growth. Economic recessions, such as the one that occurred in 2008, have made it difficult for the company to continue with its expansion strategies. Consequently, it leads to a drop in sales across international branches.
  • There is a threat of a rise in the cost of supplies and other inputs that are vital for Walmart’s business operations. It negates its ability to realize profits.
  • The company also faces the threat of resistance from local communities (Massengill 66). There is a high potential of resistance because of the company’s activities relating to bribery and inadequate corporate responsibility.

Summary

In tandem with the above discussion, it can be noted that Walmart Corporation has numerous strengths, weaknesses, opportunities, and threats that affect its performance in different ways. However, the strengths and opportunities available at the company could be used to the advantage of the company to ensure it remains ahead of all other competitors. Opportunities relating to growth in market in developing countries offer the company a perfect ground for effective performance. Weaknesses and threats have also continued to affect the company’s growth agenda and the level of profitability that could be achieved in its retail activities. Walmart’s management should have a clear understanding of each of these aspects to succeed in its operations.

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