Walmart SWOT Analysis 2013

1.      SWOT Analysis of Walmart

1.1.            Strength of Walmart

Walmart is the world’s largest wholesaler. Walmart offers a huge selection of products at its store at very competitive price. Walmart because of its economies of scale can get discounts in its supplies. Walmart produces its own product and uses local suppliers to establish good supply chain.

Walmart’s strength is in its higher buying power. Walmart has exceptional operational capabilities, that is why it has unequalled sales and profitability across the globe. Walmart has a wide range of products with cosy leadership that attracts more customers. Walmart’s no frill strategy gives it competitive advantage. (Nyakreal, 2013)

Walmart has state of art information logistics which enables it to monitor and control the stock level and supplier relation giving it competitive advantage over its competitors. Walmart is also the largest employer of the world hiring more than 2.2 million employees. Walmart’s strength is also in the wide spread international operations. In 2013, Walmart earned $135 billion from its international operations.

1.2.            Weaknesses of Walmart

Walmart has faced numerous legal lawsuits related to unhealthy labour practices. The lawsuit has cost the company millions of dollar. This has reduced the corporate reputation of the company.

Walmart also has a very limited differentiation in its products compared to the competitors. Having no differentiation might impact Walmart’s future position and leadership in the market. If the no frills won’t attract customers then Walmart’s business will erode. In the recent years Walmart has faced serious negative publicity about the ethical consideration in sweat shops with low wages, unpaid overtime worker, discrimination and unhealthy work condition in countries like Bangladesh. The negative publicity leads to the damage of its image.

1.3.            Opportunities of Walmart

Walmart has the opportunity in the growing and emerging market. In the mid-2013, the retail market grew by 5% which might help in increasing its organizational revenue. Walmart has growing opportunities in BRIC countries. Walmart must make sure that it would gain future growth in these emerging countries.

Walmart’s, own products has grown its rising acceptance over 40% in the last decade. This means that the future would see growing acceptance of its product as national product of US. Walmart has further opportunities to increase its private label products and earn higher margin. Customers has growing trend of eating healthier food product which would increase the opportunity of gaining higher demand. Walmart has future opportunities in online retailing. This can increase customers flow in Walmart and increase the organizational revenue.

1.4.            Threats of Walmart

The increasing competition from online and brick and mortar companies such as Amazon, Costco, and Target. These companies offers higher differentiation that Walmart doesn’t. This might lead to decrease in the organizational customers. The increasing threats from local communities has negative impact on the organizational sustainability. The decrease in the local stores because of Walmart has increased the local community’s resistance to Walmart.

The increase in the cost of resources and commodity price has the danger of decreasing the Walmart’s profit and decrease in the organizational competitive advantage because of no frills strategy. As the price goes up, the profitability decreases.