SWOT Analysis Wal-Mart

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Strengths

Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience
and a wide range of products all in one store.

Wal-Mart has grown substantially over recent years, and has experienced global
expansion (for example its purchase of the United Kingdom based retailer ASDA).

Opportunities

To take over, merge with, or form strategic alliances with other global retailers, focusing
on specific markets such as Europe or the Greater China Region.

The stores are currently only trade in a relatively small number of countries. Therefore
there are tremendous opportunities for future business in expanding consumer markets,
such as China and India.

New locations and store types offer Wal-Mart opportunities to exploit market
development. They diversified from large super centres, to local and mall-based sites.

Opportunities exist for Wal-Mart to continue with its current strategy of large, super
centres.

Threats

Being number one means that you are the target of competition, locally and globally.

Being a global retailer means that you are exposed to political problems in the countries
that you operate in.

The cost of producing many consumer products tends to have fallen because of lower
manufacturing costs. Manufacturing cost have fallen due to outsourcing to low-cost
regions of the World. This has lead to price competition, resulting in price deflation in
some ranges. Intense price competition is a threat.

Wal-Mart Stores, Inc. is the worlds largest retailer, with $256.3 billion in sales in the fiscal year
ending Jan. 31, 2004. The company employs 1.6 million associates worldwide through more than
3,600 facilities in the United States and more than 1,570 units. Read more

Disclaimer:
This case study has been compiled from information freely available from public sources. It is
merely intended to be used for educational purposes only.

The company has a core competence involving its use of information technology to
support its international logistics system. For example, it can see how individual products
are performing country-wide, store-by-store at a glance. IT also supports Wal-Marts
efficient procurement.

A focused strategy is in place for human resource management and development. People
are key to Wal-Marts business and it invests time and money in training people, and
retaining a developing them.

Weaknesses

Wal-Mart is the Worlds largest grocery retailer and control of its empire, despite its IT
advantages, could leave it weak in some areas due to the huge span of control.

Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary),
it may not have the flexibility of some of its more focused competitors.

The company is global, but has has a presence in relatively few countries Worldwide.

Posted in SWOT Analysis

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Raymond Catala
Communication, Cooperation, Collaboration

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Wal-Mart SWOT Analysis

Wal-Mart SWOT Analysis

An analysis of Wal-Marts strengths, weaknesses, opportunities, and threats, also known as a

SWOT Analysis, is imperative in order to understand Wal-Marts strategy. Wal-Mart Stores
operated retail stores in various formats across the world. In the United States, the retail formats
operated by Wal-Mart include discount stores, supercenters, neighborhood markets, marketside,

and Sams Club. The company is the largest retailer with unprecedented scale and clout which
will enable it to maintain its market position and continue to gain market share from competitors.
However, with over two million employees, rising labor and healthcare costs will significantly
affect Wal-Marts profitability. (IBIS World) Wal-Mart Stores operates numerous retail store
formats in the following countries: Argentina, Brazil, Canada, Chile, China, Costa Rica, El
Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, and the UK.
The company recorded revenues of $408,214 million during the financial year ended January
2010, an increase of 0.9% over 2009. The operating profit of the company was $23,950 million
in 2010, and increase of 5.1% over 2009. The net profit was $14,335 million in 2010, an increase
of 7% over 2009. (IBIS World)
The SWOT analysis provided below will demonstrate the numerous strengths, weaknesses,
opportunities, and threats that Wal-Mart currently recognizes:
Strengths

A market leader with unprecedented scale gives a competitive advantage:Largest retailer in

More than $400 billion in revenue, $24 billion in operating income, 8,500 stores, and nearly
There is no competitor of comparable size.

Low cost leadership enabling Wal-Mart to offer products at low price points: The company o
prices about 12% lower than the market. Wal-Mart constantly flexes its bargaining muscle t
ensures a steady, recurring stream of customers for its goods, making Wal-Mart synonymou
keeps constant pressure on competitors.

Internationalization strategy a strong foundation for growth as the US market matures: Th

units in 14 countries. Wal-Mart opened its first international store in Mexico in 1991 and has
acquisitions and its own innovation. The company has nine international store formats. It op
banners. Wal-Mart has reached $100 billion net sales mark for 2010. In FY2010, Wal-Mart ad
from organic growth. International segment revenue (35% of total) grew 9% on a currency-a

Opportunities

Out-performance of the retail sectors in emerging markets: Asias retail sales are estimated
the growth. Chinas retail sales are estimated to grow at 16% in 2010. Chinas retail rose 17
trillion ($366.9 billion) in January and February of 2010, according to the National Bureau of
estimated to make up just 5% of the market but is growing at 30% a year.

Concentration on grocery and food will benefit as eating at home, health and wellness trend
economic downturn, the perception that home-prepared foods are much healthier- a view h
according to an industry study- and an unmet desire to enjoy affordable, restaurant-type foo
marketers the opportunity to recapture mealtime. With 84% of food shoppers cooking more
planning to do so more often. Household deli spending for the year ending September 2009
bakery, up 3%; fish meat/seafood, up 4%; and produce, up 3%. Sales of frozen foods are es

projected to reach $65 billion by 2013. Also, sales of food carrying a natural claim reached $
April 2009, up 6.6%.

Growth in Internet retailing to serve larger market: The US market, by 2014 is expected to r
which represents an increase of almost 75% compared with levels in 2009, according to ind
share of grocery in the total online sales is estimated to be 2%, the higher growth market g
reach out to wider audience and increase customer base. Walmart.coms traffic exceeded o
more than 15% over the previous year through Site-to-Store and home delivery.

It is evident that Wal-Mart is a global low-cost retailer, enabling Wal-Mart to systematically

reduce costs due to its large scale of operations. Also, external opportunities, such as the
economic recession that has been experienced world-wide gives Wal-Mart countless
opportunities to identify new customers who demand low retail prices in order to maximize their
budgets. Utilizing state-of-the-art technology has allowed Wal-Mart to maximize efficiency
while minimize costs, resulting in low prices for their customers. With the use of such
technology, Wal-Mart has been able to closely monitor grocery prices in order to reduce risks
associated with inflation and rising food prices. This has strategically positioned Wal-Mart to
expand its operations both domestically and internationally. In the coming years, Wal-Mart will
continue to expand abroad due to its international opportunities and time-tested strategies.
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IntroductionWal-Mart is an international store that offers working families with the items they requireat prices
which are quite competitive. In each of their worldwide markets, they make use of their strengths as a worldwide
corporation to meet the regional needs of their consumers, and offer assistance to communities through their
corporate social responsibility drives. The PEST(political, economic, social and technological) and SWOT
(strength, weakness, opportunity andthreat) analysis of Wal-Mart store forms the basis of this
discussion.StrengthWal-Mart is the largest wholesaler in the globe. It was ranked number one in 2011 byFortune
500, among the largest companies in America (DATAMONITOR, 2011). The wide spreadof its operations is
exceptional and there is no comparable competitor of such size. It has beenincreasing its influence in international
operations. By it being a market leader, it is capable of replicating its best strategies regularly on an unrivaled scale
across the globe.Wal-Marts market dominance leads to advantageous terms on everything ranging from thegoods
on its shelves to stock leases. This competitive advantage has generated its positiveeconomic proceeds and market
share advantages.On the other hand, Wal-Mart stores provide a large variety of generally known
products.Additionally, it provides personal label retail across a number of categories, which comprise
of entertainment, grocery, home wares and apparel.Moreover, its dominant position and the variety of products
that it offers permit it toquickly vary its products. This enables it reap the benefits of economies of scale. For
instance, byshifting floor space share, Wal-Mart can gain from low-income customers growing wish for

3
consumable staples as an alternative of discretionary items. This sort of flexibility and influenceenables it to
maintain its marketplace position.WeaknessesWal-Mart is a big box vendor and runs supercenters which
necessitate large area for everynew stock. This limits its expansion in urban places where the space available is
limited. Studiesshow that store sales at Wal-Mart in America have reduced for eight repeated quarters due to
itsmarket place space limitations and costs. Thus, it has become more crucial for Wal-Mart to comeup with a new
set up that accommodates its limitations and which is more apt to the urban areas.This is because its competitors
like Costco and Tesco are also aiming to come up with newworkable setups. Therefore, if they manage to be
successful then Wal-Mart will have a competitivedisadvantage.OpportunitiesWal-Mart has been increasing its
existence in a number of developing economies likeMexico, South Africa and Brazil. These economies have been
described as some of the fastinggrowing economies in the globe. By establishing in these places, thus, Wal-Mart is
guarantee onincreased volume of sales as time progresses.ThreatsThere has been a high increase of employees
which indicates a possibility of increase in payroll expense and health care benefit expenses. The labor
expenses for corporations in theUnited States have been increasing as the health care charges and wages rose
in the recent times.According to business estimates, health care prices for the US workers are estimated to rise by
8 percent in 2010 and 8.5 percent in 2012. The rise in medical charges continues to outdo
inflationand pay rise (Big Lots, 2008).

4
One of the basic drivers that are likely to cause the rise in medical charges in 2012 is that, employees are worried
about losing their positions and possibly their health cover. Thus, they make use of their health care excessively
while they still contain it.PEST Analysis for Walmart analysis presents an evaluation of macroeconomic

framework that affects a particular industry or firm.Currently, the understanding of continuously changing
environment, technology, andcompetition compels Wal-Mart to think strategically and to decide pretty fast. Its
strategic planstake the place of long term plans.Wal-Mart has been at times subjected to political actions and law
suits. For instance, it has been subjected to the law suit for gender and racial discrimination.In the
economic side of it, the US has its plan to moderate the increase of supercenters inorder to leverage capital assets
through a plan which is designed to increase returns and sales inU.S. stores. On the part of social analysis,
consumers in US who want one stop service go to Wal-Mart as their first choice.Wal-Mart retail uses modern
technologies for the core purpose of marketing. This is because in the recent business situations adopting
the modern marketing strategies is essential. For instance, reliance on the internet and social media for
advertising and selling is vital for thecompanys development. Similarly, technology is among the foremost
concerns on the agenda of marketing in Wal-Mart as this leads to productivity, creativity, and sustainability.In
conclusion, this paper has discussed more about the SWOT and PEST analysis of Wal-Mart Company. Under the
SWOT analysis the strengths, weakness, opportunities and threats have.
http://www.scribd.com/doc/101816574/SWOT-and-PEST-Analysis-Of-Walmart
Strengths
It is the world largest company in term of revenues.

It is well known for lowest cost products.

Wal-mart has the largest employee base.

The company covered most of the US market and having a huge market share.

Walmart offers variety of products in their stores.

Walmart is operating in 14 countries with 2,980 stores.

It sells 40% of private brands which are produced through contracts with manufactures.

High customer satisfaction.

The SAMs Club customers are able to buy the products in bulk quantity and getting the
advantage of low prices.

A Wal-Mart super store offers non stop shopping for their customers.

Satisfaction guaranteed programs promoting customer goodwill

Buy from local merchants when possible

Stock ownership and profit-sharing with employees

Weaknesses
The Corporation is huge but still has presence in 14 countries.

Customers sometimes are curious about the quality of products.

Keep poor performance employees on hand.

The market share is low outside the US market.

Supplier profit margin is very low.

Opportunities
Most of the International Market are untapped specially the Asian Countries.

Joint ventures to increase market share in international market.

The inflation in US market diverts the customer from buying expensive products towards
cheap products.
A lot of retail organizations are leaving out of business due to the drop in disposable incomes.
This can help Walmart by growing its customer base due to the bargains that it can provide its
customers.
Due to the cheap rate that the organization is able to buy its products from suppliers, it is able
to provide customers with even better bargains to give confidence them to shop at Walmart.
Threats
Regulation of Wal-Mart pharmacies

Small towns do not want entry of Wal-Mart

Bad media exposure for Kathie Lee Brand

Variety of competition nationally, regionally and locally

Substitute products more easily because of intense competition

Wal-Mart is criticized several times by community groups.

The competitors are gaining control over International Market.

Being a worldwide retailer means that you are uncovered to political troubles in the countries
that you operate in.

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SWOT Analysis of Walmart

Strengths - Walmart has become the largest retailer in the US, and perhaps the
world. It's huge buying volumes and negotiating style keeps its cost low, which
allow them to keep their prices low. People will travel a pretty long distance to shop
there. It has invested heavily in software technology to keep tight controls on its
operations.

Weaknesses - Small local businesses often can't compete with Walmart, and go out of business,
which often alienates the small local business community. Walmart has been sued for unfair
labor practices as well. These and other issues tarnish Walmart's image, especially for those who
are directly impacted.
Opportunities - Growing markets outside the US offers a great opportunity to continue its
growth.
Threats - Being number one in its market, some of Walmart's proven strategies are being
imitated, to various degrees, by other la
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