SWOT Analysis of Walmart Group

Walmart SWOT Analysis

by Shamsul
SWOT Analysis of Walmart
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SWOT Analysis of Walmart Group

You have certainly been aware of the SWOT Matrix or SWOT Analysis before. It is widely used in the field of marketing for competitive analysis. Here, you will learn about the SWOT Analysis of Walmart Group.

Founded: July 2, 1962, Rogers, Arkansas, USA

Founder: Sam Walton

Headquarters: Bentonville, Arkansas, United States

Industry: Retail

CEO: Doug McMillon (Feb 1, 2014–)

Area Served: Worldwide

Products: Supermarket, Hypermarket, Superstore, Convenience shop

Divisions: Walmart U.S., Walmart International, Sam’s Club, Global eCommerce

Number of Employees: 2,300,000

Revenue: $559.2 Billion (2021)

Net Profit: US$13.70 billion (2021)

Introduction:

Sam Walton was a businessman who was working in 1945 for J.C Penney. He came with the idea of buying small stores branches and selling different products at low prices, and he decided to do so. He started selling a high volume of products at lower prices than all other stores, and the generated profit margin was low. His company started earning money and then in 1962; he opened the Walmart store firstly in Arkansas. Later on, there were branches of this store in Oklahoma and Missouri too.

The name of the store went through changes. In 1962, the first store was named Walmart Discount City Store. In 1969, the name was changed to Wal-Mart, Inc. During 1979, the company took Wal-Mart Store Inc. it went public. In 5 more years, the company branches were present in six-plus states and the total numbers of stores were 125. The sale was 340.3 million USD which is very huge. The 1980s, 90s, and 2000s were beneficial years for company growth. The company’s founder Sam Walton left the CEO position in the 1980s and he was passed away in 1992. He is counted into the 100 influencing people list of the 20th century. There are 11500 plus Walmart stores worldwide and it is the largest employer almost in twenty-two states in the US. It is the biggest retailer and the largest 19th public company in the world.

Walmart’s Mission

The mission of Walmart is to create convenience in the shopping experience for people and it guarantees satisfaction. They offer you quality products at lower prices than that of the market. According to the founder, a retailing business can be successful when you offer those things to customers that they want.

They introduced a slogan of saving money for a better life. This slogan shows the mission of the founder so that people can do shopping easily.

Walmart’s Vision:

The company’s main focus is to allow its customers to save money so that they can live better lives. This company has a wish that everyday shopping should be easy for busy families. Their customers should know how to save money no matter what the situation is. Customers can do shopping at low prices whether they are buying from stores or online. The customers can buy more stuff for daily use here on less budget.

Strengths of Walmart – SWOT Analysis of Walmart

A Legend in Retail

Everyone knows about Walmart in the US. There are 4756 plus stores in almost 50 American states and it is a huge success. Americans visit this store in millions and buy the stuff for their daily lives. This retail store is well known throughout the world and nothing can beat its level. This company is a legend because of its old history and power to provide people with the best things.

Scale of Operations

There are almost 60 million of their products in stores and this amount is increasing every year. Their products are unique and different from all. That is why they are famous among all and their prices attract the people towards them. The product ratio is directly proportional to the store number. So, the products will increase as the store number will increase. Walmart is not nationally famous, but it is an international store brand that is present in every state. They are trying their best to operate around the map to open up their stores in different continents like Africa, Europe, North America, and South America.

The Business Strategy

Walmart uses a business model which is called economies of scale. It is defined as advantages caused by increasing production and decreasing the prices. Walmart’s operation is very expansive and big throughout the world that the production cost is divided among all goods. That is why they try to keep the prices low. The volume output is incredibly high which can keep fixed costs for many products. Do most people ask that why they don’t raise the prices to get more profit? It is a valid and easy question. But the answer is Walmart is Super Saving Mart, and that is because of low prices. Its low-priced products with excellent quality attracted people and that is why it became that much famous among people. If the prices are high, then customers are not attracted. Any other store can challenge the price if Walmart increases the rates. So, they keep prices low because they don’t want to lose customers.

Efficient Supply Chain

One of the best things about Walmart is that they have a very reliable supply chain. If so many people provide quality products at less price, then it can be an issue. But they are the only ones who are offering such good products at this price. They are good at maintaining everything because they keep track of every single product manufactured, sold, packed, etc. they are putting their money, effort, time, and care for people so that people can get the best of things. They are serving people easily because of advanced technologies.

The records are monitored perfectly and you’ll never see any shelve empty in the Walmart store. There is always stock of every product and you can have it on time. There is no one other like Walmart and there is so many companies who have tried to copy the Walmart structure but they were not successful.

A Wide Range of Products

There is everything present in the Walmart store. You can find products of every brand. There are cheaper options too. They have private labels for a wide range of Walmart products. The selection team keeps the customer’s demands in mind and ensures that everything should be present at every store. There is strong coordination between Walmart’s management and workers. That is why it is running successfully.

Weaknesses of Walmart – SWOT Analysis of Walmart

The Healthcare Situation

The healthcare system and options are very less and weak in the united states. You can say the health system is non-existent. The largest store in America cannot provide the proper healthcare services to 1.5 million employees. Former employees were used to saying that Walmart offers you the best healthcare plan because they deduct a minute amount from your paychecks and give you the best health services. It is the biggest company in the United State of America and it needs to provide health services to more employees.

The Working Conditions

Walmart is a store where there are no empty shelves and you can always find anything here. The employees have to work really hard to maintain the store level. They have to keep their eyes on everything so that customers face no difficulty. Sometimes, they have to work without days off and on leaves too. They have to go different places when someone is on-off. Employees have to work on shifts and if you make a mistake, you’ll be fired.

Raises, Promotions, and Firings

Employees have to work all day as the last day because you don’t know when you’ll be fired for any of your little mistakes. It would help if you got good with managers so that you can have increments. There are chances that you are doing everything right at the time, but you’ll still have no raises. It is very hard to get a promotion here, and the situation becomes much more difficult when it comes to female employees.

Gender Discrimination

Six female employees filed lawsuits against Walmart in 2001. They said that they underwent discrimination in the case of promotions and bonuses. The women were able to get promotions and high pays but they were never chosen. A few times, they were never delivered with their things. Almost 1.5 million female workers are working there and it is the biggest example of gender discrimination. The women discrimination cases are still going on.

Product Placement as Customer Pressure

You can find the special products just on corridors, corners and sometimes on entrances because these products are highly demanding. It seems like its stores are the products placement or showcase on discounted price.

These specific products are chosen from the system statistics or data which is gathered from logistics. They want customers to have the products which offer the best profit to them. The things which don’t make much profit such as medicines, toilet papers, food, etc. are kept at the back of the store.

The Cost Leadership Strategy

The complete business is based on this strategy. The strategy shows the low cost for each product which is sold most. The selling price is minimized and thus the profit margin is also minimal. They are known because of their thin margins of profit. This strategy has been winning because the business is running really well.

Opportunities for Walmart – SWOT Analysis of Walmart

Possible expansion to foreign Markets

No doubt Walmart is a huge company, but it needs to venture into new things or other countries. For example, Walmart is still not present in most of Europe, Russia, Africa, or Australia’s continent. Walmart is known as the biggest retailer in India, the United Kingdom, etc. These expansions are appreciable but still, they need to enter into new countries.

Human Resources Developments

Walmart has gone through so many criticisms, lawsuits or controversies because of its way to treat employees. In the pandemic season, it increased the hourly rate and gave raises to almost 1.5 lac people. It is very important to give funds and raises to employees so that they can work with more eagerness. So many people will prefer to work in Walmart stores if they raise their wages and salaries.

It can easily avoid controversies and lawsuits if it continues to develop at the same rate.

Raising the Quality in Products

Walmart offers a wide range of products but still, there are some lacks as it needs to improve its quality in some things. The low quality of clothes urges health concerns so they need to upgrade the cloth quality by keeping customers’ health in mind. Walmart can prove themselves as best by improving the quality and they can see the clothes of good quality too.

Additional Food Sections

Walmart sells only packaged or canned products. It can improve its business if it starts selling fresh food like in grocery stores. It can help it to beat many competitors. Certainly, it will be time-consuming to add such things in store as a physical section, but Walmart’s management has already proved that they can handle all things in a good way. It can easily deal with the fresh food portion too. If it remains successful in doing so, then it can also introduce the sections of gluten-free or vegan options.

Home Delivery Improvements

Walmart offers home delivery services too it is not the first name that hits your mind while you want to order something. Amazon is the biggest competitor of Walmart and its home delivery services are much better than that of Walmart. Home delivery options are increasing day by day and people love to rely on them as they don’t need to go somewhere and they get their desired products. Time or money are the things which should be used where required. In COVID, people were used to ordering things at home, and at that time, home delivery was much required to be fastened. Walmart needs to have some improvements in its online stores.

More Acquisitions and Collaborations

Walmart is present in most places but still, it needs to get into developed countries. It can invest something into the retails of other countries and can easily collaborate with them.

Threats to Walmart – SWOT Analysis of Walmart

Political Controversies and Sensitive Issues

Walmart has been criticized because of its wide range of products and it has become part of so many controversies too. Let’s have a look.

Political Controversies

IN 2018, supporters of Donald Trump started a campaign against Walmart. Walmart has put some clothes or baby dresses with the prints of Impeach 45 or Impeach Trump. Trump was the 45th president of America and his supporters have displayed rage and other bad behavior on Twitter. Even some of the republicans mentioned the dead founder of the company. Walmart has so many shirts with the trump pictures or logo too. It is not an anti-trump company as it made shirts just to earn money, not to earn stance. Walmart has also sold some t-shirts which have written against journalism. It has been criticized for urging violence too.

Bribery Investigation

Walmart has also faced allegations of bribery. In 2011, it was not a piece of big news as the other corporations had. Several investigations had been done to accomplish the case but there was no final result. The repute was harmed to some extent and bribery allegations were published in NYT. An internal investigation was expanded to other countries like India, China, etc. The company had paid millions of dollars to securities.

Copies of Strategy and Business Model

There are so many retailers who have followed the models of Walmart. There are so many big companies who have followed the strategies of Carrefour. Though Walmart is on the top of the list, there are still some companies in competition. The comparison of prices in America and the United States can hurt Walmart Sales.

Tax Avoidances and Subsidies Issues

It is not a surprise because there are so many big corporations that don’t pay taxes. There are always issues of taxpaying, tax reduction, and avoidances. Walmart has the Government’s financial support. This can help the company to get profit and save money but at the same time, it attracts critics too. This benefitting taxpayer is full of criticism.

The Modern Nemesis: Amazon

Maybe Walmart’s store is the biggest physical store but when it comes to the online stores, then nothing can beat the level of Amazon. Amazon is still the best company that can deliver food to your homes at any time. Walmart needs to improve its online store so that it can earn more profit easily. The Walmart store’s website is a bit slow and that is why people tend to move to Amazon which is comparatively faster and the delivery time is very short. The way of shopping is very efficient on Amazon while that of Walmart is ancient. Due to the ongoing pandemic, people are going more with online stores. Amazon is modern and can be a threat to Walmart.

ConclusionSWOT Analysis of Walmart

Every business is facing some kinds of threats and there is no way to get rid of them but for Walmart, these are quite a few. It is possible to reduce these threats, but it is completely impossible to remove these threats. No business can be perfect but they can try to be better than all others. It is very difficult to have a look at each and every step or category of all. So, by using SWOT analysis, this purpose can be met easily while saving time and effort. You can complete the SWOT analysis in a much easier way if you don’t know how to do it because this technique is very easy and consumes very little time. According to the SWOT analysis of Walmart, it can be a further leading brand if it only improves its online store services.

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