SWOT ANALYSIS ON WAL-MART

An study of internal and external cults

M.SIVA SHANKAR B.Com, A.C.S (inter)., 25,Velu nagar, vanniar palayam, cuddalore-607001. heartsofsiva@gmail.com +91-8056467696

SWOT ANALYSIS ON WAL-MART *M. Siva Shankar ABSTRACT This paper has made an attempt to encounter the SWOT on Walmart. Walmart, global giant in retailing, serves customers and members more than 200 million times per week at more than 10,130 retail units under 69 different banners in 28 countries. Walmart employs 2.2 million associates worldwide. It works on the strategy If we work together, well lower the cost of living for everyonewell give the world an opportunity to see what its like to save and have a better life. One of the best ways to look at a business is to objectively take a look at the entire operation. This begins by looking at their strengths, weaknesses, opportunities and threats or to conduct a SWOT analysis of Walmart. An Introduction "The secret of successful retailing is to give your customers what they want. And really, if you think about it from your point of view as a customer, you want everything: a wide assortment of good-quality merchandise; the lowest possible prices; guaranteed satisfaction with what you buy; friendly, knowledgeable service; convenient hours; free parking; a pleasant shopping experience." - Sam Walton When we actually take a look at Walmart we can see the thought behind the idea of the store and see that the founder had a brilliant concept. Sale the necessities that people need and use every day. Make these accessible and affordable for the middle class of America. This made Walmart to make a global mark. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, as well as the largest toy seller in the U.S. It also owns and operates the North American company of Sam's Club. Walmart operates in Mexico as Walmex, in the UK as ASDA, and in Japan as Seiyu. It has wholly-owned operations in Argentina, Brazil, Canada, Puerto Rico, and the UK.

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Wal-Mart's investments outside North America have had mixed results: its operations in South America and China are highly successful, while it was forced to pull out of Germany when its venture there was unsuccessful. SWOT analysis-an outlook: A scan of the internal and external environment is an important part of the strategic planning process. Environmental factors internal to the firm usually can be classified as follows Strengths(S), resources and capabilities used as a basis for developing a competitive advantage. Weakness (W), the absence of certain strengths may be viewed as a weakness. Opportunities (O), environmental analysis may reveal certain opportunities for profit. Threats (T), Changes in the external environmental also may present threats to the firm.

Walmart on eagle's eye: Type of operation Industry base Founded on Founder(s) Headquarters No. of locations Area served Key people Employees Subsidiaries : Public : Retailing : 1962 : Sam Walton : Bentonville, Arkansas, U.S. : 8,970 (2011) : Worldwide : Mike Duke (President & CEO), S. Robson Walton (Chairman) : Approx. 2.1 million (2011) : Asda, Sam's Club, Seiyu Group, Walmex.

INTERNAL FACTORS The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. What may represent strengths with respect to one objective may be weaknesses for another objective.

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Strength: These are the characteristics of the business, or project team that gives it an advantage over others, the strength of Walmart is listed below. The strength of Walmart is that they have developed a loyal customer and employee base. This base is extremely loyal. They achieved this loyalty with good customer service for their customers, great pricing for the products they sell and by moving to areas of the country that are often ignored by other retailers. The company has a core competence involving its use of information technology to support its international logistics system. A focused strategy is in place for human resource management and development. People are key to Wal-Mart's business and it invests time and money in training people, and retaining them. In one store they offer a huge selection of goods at very competitive, if not the best, prices in a one stop store. Because of their size they can get huge discounts from suppliers and so pass these savings on to the customers. They manufacture they own branded goods as well as supply goods from local suppliers and other major brands. Their size and buying power is a great strength. They also are frugal in their management style...very careful with how they spend their money and manage their resources. Wal-Mart has grown substantially over recent years, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA) Weakness: These are the are characteristics that place the team at a disadvantage relative to others Wal-Mart is the World's 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.
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The company is global, but has a presence in relatively few countries Worldwide. In some cases, a weakness may be the flip side of strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.

Just controlling such a huge organization is a huge undertaking and in particular managing the employees. Suppliers are always under pressure with regard to price and their ability to supply when required.

Because of the low prices customers often question and are concerned at the quality of the goods.

Often Walmart is criticized to be a gender biased as only Few women and minorities in top management. EXTERNAL FACTORS

The external factors may include macroeconomic matters, technological change, legislation, and socio-cultural changes, as well as changes in the marketplace or competitive position. The results are often presented in the form of a matrix. Opportunities: These are the external chances to improve performance (e.g. make greater profits) in the environment. 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 Walmart opportunities to exploit market development. They diversified from large super centers, to local and mall-based sites.
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Home delivery of orders placed through the internet is a big opportunity. Most stores are on the edge of town and as fuel costs rise people are less likely to want to travel. 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.

Expansion into other countries and forming partnerships to enter these countries is probably the main opportunity...employing 'more of the same' strategy. Taking over companies overseas is also possible. e.g. ASDA in the UK

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: These are the external elements in the environment that could cause trouble for the business or project Being number one means that it becomes the target of competition, locally and globally. Being a global retailer means that is exposed to political problems in the countries that operate in. The cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost has fallen due to outsourcing to low-cost regions of the World. This has led to price competition, resulting in price deflation in some ranges. Intense price competition is a threat. The cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost has fallen due to outsourcing to low-cost regions of the World. This has led to price competition, resulting in price deflation in some ranges. Intense price competition is a threat. Local competing vendors hate the possible arrival of Walmart and a lot opposition is likely. Also competition from local convenience stores is likely to increase as travel costs to Walmart increase.
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Although Walmart is huge, competition from similar companies is also likely. Being successful, they are open to attack on any ethical stance - low pay and poor work conditions, supply of goods from 'poor' cheap labour countries, and environmental issues.

Conclusion: All attributes in this earth has its own strength weakness, opportunities, threats Walmart is not an exception. This paper conscripted the SWOT of Walmart stores if all the strengths are focused and opportunities are taken to consideration with a investigation towards weakness and threats can still build Walmart itself a stronger smarter solider sector. On the whole the upcoming consumer demand has switched over retail industries. This will influence Walmart to reach new heights.

Bibliography: 1. Swot Analysis - Idea, Methodology and a Practical Approach, Nadine Pahl, Anne Richter.page 19-40. 2. The Impact of Wal-Mart on the British Retail Market, Axel Antoni page 37-53. 3. The Wal-Mart Success Story, Christian Kneer 4. Contemporary Marketing, 2013 Update, Louis E. Boone, David L. Kurtz

Webliography: 1. www.marketingteacher.com 2. www.rapid-business-intelligence-success.com 3. www.quality-assurance-solutions.com 4. www.wikiswot.com/SWOT/2_Retail/Wal-Mart.html 5. www.walmart.com

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