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Tuesday, 12 June 2012

SWOT Analysis of Walmart

Wal-mart is the world’s largest retailer and also the world’s largest private employer having over 2 million employees. It has more than 8,500 stores in 15 different countries, with 55 different names. It also operates in 50 states of U.S under its own name. According to the Global 500 and Fortune’s 500 lists, Wal-Mart Stores sustain its top position for two consecutive years. And it makes Wal-mart one of the largest company in the world.
                                          
Strengths                                                     

State-of-the-art information system gives edge to the Wal-mart to control and monitor supplier relations and inventories more competently than its competitors; it ultimately gives Wal-mart a price advantage.

According to the Global 500 and Fortune’s 500 lists, Wal-Mart Stores sustain its top position for two consecutive years. And it makes Wal-mart one of the largest company in the world.

Wal-mart is the world’s largest retailer and also the world’s largest private employer having over 2 million employees.

In the U.S it is the biggest grocery retailer.  In 2009, it generated 51 percent of its revenue in the United States from grocery business.

It has more than 8,500 stores in 15 different countries, with 55 different names. It also operates in 50 states of U.S under its own name.

In 2009 Wal-mart launched "Sustainability Index" to make transparent of information to its customers and also assume accountability for its products’ origins.

Performance of Wal-mart is superior and stable in all aspects (financial, organizational and otherwise). For the FY 2011, it achieved a net income of $15.4 billion with a 24.7% GPM.   

Wal-mart is developing new business, retailing concepts and rapidly expanding its operations. 

Wal-mart is superior at strategic management and it has higher profitability throughout the financial years.

Weaknesses     

Wal-mart has experienced a sales drop in United States; sales have dropped for 8 continuous quarters.

Wal-mart had Unsuccessful ventures in South Korea and Germany. In Germany its low price strategy not worked well.        

In Germany its corporate culture was viewed negatively among customers and employees. Particularly its "statement of ethics", limited relationships.

In 2006 Wal-mart withdraw its operation from Germany due to losses and sold out stores to the German based company. Alternatively its competitors gaining market share in Germany.  

In the past, it has been criticized of paying below minimum wage and locking night-shift workers and exposing employees to health hazards and sex discrimination is also found.
                                                      
Opportunities                                                

Wal-mart can pursue global opportunities by expanding operations in different markets such as Asia, Middle-East and etc.

Wal-mart can take positive measure to appeal to a more affluent demographic.

Opportunity to expanding by refurnishing its stores with wider aisles, a sushi bar, wood floors a sandwich/coffee shop with different free facilities and more expensive wines, electronics, and other goods.

1n 2011, Wal-mart announced to negotiate with suppliers and gave agenda with respect to improve the nutritional values of its products over the next 5 years, by reducing the amount of sugar and salt and eliminating trans-fat.

It also promised to reduce the prices of whole vegetables and foods with efforts to open new stores in low-income regions, where there are no supermarkets.

In 2011, Wal-mart tested its new home delivery system where customers will able to order things offered on its website for instance toiletries, household supplies and groceries.   

Threats

Since 1962 Kmart has battle for market dominance with Wal-mart. Prominent similarities such as: names, atmosphere, organizational purpose and market served.

In U.S Wal-mart is facing different critics about the effect of its stores on local communities, particularly small towns. Different research studies have been conducted on impact of Wal-mart on local business taxpayers and jobs. Result of the studies found that small business lost their half of the business and local community lost their jobs as the arrival of Wal-mart.

FY 2006 financial report of Wal-mart indicated that its customers are sensitive to higher gas prices and utility costs.

Target stores are more upscale and its new store has wider aisles, a sushi bar, wood floors a sandwich/coffee shop with free Wi-Fi internet facilities and more expensive wines, electronics, beers and other goods.

Wal-mart is getting tough competition from its primary competitors includes Target, Meijer, Kmart and ShopKo. 

Environmental groups, Christian organizations and Labor union have criticized Wal-Mart for its business practices and policies.

In gender discrimination suit Wal-mart is in the highlight concerning 1.5 million of its former and current female employees.

Dollar General and Family Dollar compete successfully against Wal-mart by finding a small niche market for home consumer products.

Average customer's income of US Wal-mart is under the national average income, and it is also predict that over (1/5) of them lack a bank account.

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