Introduction
The biggest retail company globally, Walmart, offers goods from foodstuffs to musical equipment. In 1962, a single little discount shop called Walmart opened its doors in Arkansas (Phillips & Rozworski, 2019). With more than 11,000 nations across 26 nations and internet sites (e-commerce) in 11 countries, Walmart has developed to become the leading retailer over the past fifty years (Hunt et al., 2018).
Doug McMillon is Walmart’s current Chief Executive Officer. Under his direction, the corporation is easing the burden on busy households and fostering consumer loyalty by making significant investments in associate salaries, benefits, and training (Phillips & Rozworski, 2019). Many factors make Walmart the leading retailer globally, and this essay analyses the strengths, weaknesses, opportunities, and threats influencing the organization.
SWOT Analysis Diagram
Table 1 – Walmart’s SWOT Analysis
Internal Factors Promoting Walmart’s Competitive Advantage
Strengths
Walmart is the most well-known retail company on the planet, with thousands of shoppers visiting it daily. Walmart’s online shop offers a variety of products and uses its trademark to protect its brand identity. With a staggering $525.10 billion in earnings for the financial year 2020, Walmart is financially strong, giving the company a competitive advantage (Saraswathy, 2019).
Since 1% of the employed population in America works for Walmart, its workforce remains the company’s most valuable asset as it invests much in its growth and management (Hunt et al., 2018). This extensive human resource gives Walmart a competitive advantage in efficiently meeting its objectives of service delivery. Walmart is equipped to exert market influence over suppliers and rivals due to its massive corporate structure and worldwide presence.
Weaknesses
Walmart has been subject to various complaints and legal actions concerning its staff. A number of the concerns have received public criticism because of the poor employee programs in the company. For example, during the COVID-19 disaster, Walmart was accused of ignoring safety precautions and is now facing legal action for the death of two workers (Ajami, 2020).
Walmart concentrates on a cost-dominance approach, which causes the corporation to have narrow profit margins and hinders its growth. Walmart uses cotton in its apparel fabric products; however, access to natural resources is challenging (Hunt et al., 2018). Given Walmart lacks any distinct competitive advantage over its rivals outside of its enormous size, its business model is prone to copyright infringement (Hunt et al., 2018). Walmart’s competitors may profit and seize its international markets as a result of its overreliance on the U.S. consumer.
External Factors Promoting Walmart’s Competitive Advantage
Opportunities
Walmart can profit by extending its market reach to untapped regions, including the Middle East and South America. The business has the potential to join forces with various significant corporations or merge with similar major international merchants. In 2020, Walmart declared that it would spearhead a $1.3 billion investment in Flipkart, an Indian e-commerce company, boosting online sales, which gives the company a competitive advantage (Saraswathy, 2019). Walmart has a critical chance to innovate its human resource management because it depends heavily on its employees.
Additionally, the business should increase its healthcare offerings to take advantage of industry needs. Walmart has the chance to raise the benchmarks of its goods to ease consumer worries about their health, as low-cost goods can occasionally be of inferior quality.
Threats
Walmart is subject to political issues in the nations where it is now doing business because it is a worldwide retailer. Since it is a multinational corporation, Walmart is subject to political disputes and may be affected by US-China tariff regulations on goods (Chang & Hu, 2020). Walmart recently made headlines for the “Impeach 45” controversy, suggesting that violence was being promoted (Hunt et al., 2018).
Furthermore, Walmart is highly vulnerable to an economic slump that will impact sales due to the current economic uncertainties, particularly in the post-coronavirus period. The unpredictability of economic trends puts the convenience of running a business in danger and could force Walmart out of existence in certain nations. Demographics have frequently claimed that Walmart’s website has some technological issues. The website is slow to load and does not provide an orderly list of the products. Competitors have capitalized and have quick, efficient, and well-organized websites, which provide clients with a great online purchasing experience.
Conclusion
In conclusion, Walmart’s dominance is primarily a result of its pricing strategy. To draw clients, the business offers the lowest pricing possible and emphasizes making many sales more than a few. This SWOT analysis demonstrates that Walmart does have the strategic strengths to boost advancement through foreign activities and the rise of e-commerce, which are prospects in the international retail sector.
Additionally, the SWOT assessment reveals that the company must implement new strategies to combat threats to its retail operation, such as competition and website technical problems, as well as its vulnerabilities, like low profit margins. Strengthening Walmart’s e-commerce business is a suitable proposition based on these strategic internal and external variables. Furthermore, it is advised that the company create a market balance and avoid being overly dependent on the American consumer.
References
Ajami, R. (2020). Globalization, the challenge of COVID-19 and oil price uncertainty. Journal of Asia-Pacific Business, 21(2), 77-79. Web.
Chang, Y., & Hu, J. (2020). Analysis on the mode of multinational retail enterprises entering Chinese market. Modern Economy, 11(1), 4-8. Web.
Hunt, A., Watts, A., & Bryant, S. K. (2018). Walmart’s international expansion: Success and miscalculations. Journal of Business Strategy, 39(2), 131-145.
Phillips, L., & Rozworski, M. (2019). People’s republic of Walmart: How the world’s biggest corporations are laying the foundation for socialism (1st ed.). Verso.
Saraswathy, B. (2019). The Flipkart-Walmart deal in India: A look into competition and other related issues. SAGE Journal, 64(1), 67-87. Web.
