When we think of Walmart, various thoughts come to our mind- a shopping hub, a place to get all our groceries from, and much more. Ranging from groceries to clothes to electronics to furniture and many other products, this multinational public chain is very extensive, making them one of the largest retail corporations in the world. Let’s learn about ‘Walmart- A SWOT Analysis’.
Walmart- A SWOT Analysis
Founded by Sam Walton, it was first established in 1962 in Arkansas. It started as a small store, but today has established over 10,585 stores worldwide. The current CEO of Walmart is Doug McMillon.
Every organization in the world has its strengths, weaknesses, opportunities, and threats, and Walmart is not any different! Not that it is something to be pessimistic about, but it is a means to understand the working of an organization in a more suitable manner. SWOT analysis can help understand the deficiencies that adversely impact effective functioning and provide a base for developing solutions to the persisting issues.
SWOT Analysis of Walmart:
- Strengths, with favorable outcomes for Walmart
- Weaknesses, with unfavorable outcomes for Walmart
- Opportunities that can facilitate the growth of Walmart
- Threats that could hamper Walmart’s growth.
1) Walmart‘s STRENGTHS:
1. Global Recognition:
Walmart is one of the most reputed US-based retail companies worldwide. Over time, it has expanded its operations over 24 countries. Furthermore it has also formed a joint venture with India’sIndia’s most significant retail store-Bharti and is a stakeholder in the Flipkart group. This retail chain operates entirely in South Africa, Canada, and Chile.
2. Economies of Scale:
Walmart adheres to a particular model which emphasizes increased production and minimal prices for products. As the operations are spread worldwide, the cost of production can be divided accordingly.
3. Extensive Range of Products:
Walmart manufactures and sells a variety of products ranging from groceries, clothing, beauty, personal care, furniture, shoes, and the list goes on… So they offer a lot of variety that can appeal to the consumers. This factor helped them capture a prominent position in the marketplace.
4. Efficient Management of Resources:
Walmart has an excellent resource management system which includes handling information systems, supply chain, and distribution facilities. Effectively handling all these procedures gives them an increased advantage over other companies.
5. Human Resource Management:
Walmart truly gives importance to the skills and knowledge provided by skilled humans and considers them an essential asset to the organization. As of today, Walmart has employed around 2.3 million associates worldwide.
6. Online Retailing:
Although offline stores have generated big sales, the online stores have boosted them! The current trend of online ordering and shopping, especially with an established name, has been a significant breakthrough for the retail company.
2) Walmart‘s WEAKNESSES:
1. Profit Margins:
Walmart has a slimline of profit margins with a current focus on low price and cost leadership strategy. However, some changes are indeed required to improve the net profits!
2. Discrimination against Female Employees:
A claim of gender discrimination was made in 2001 by some female employees based on getting lower pay scales and promotions. A new lawsuit was filed in 2017 and is still ongoing.
3. Simple Business Model:
This is a significant flaw for the retail company as the model doesn’t have any differentiator, giving them any competitive edge over other corporations. In addition, the type of model that Walmart uses can be easily plagiarized by other organizations, which can have a negative outcome.
4. Poor Working Environment:
Another weakness that makes up an essential aspect of any organization is poor working conditions. Over the years, there have been complaints regarding safety issues, work overload, discrimination, etc., which curtails the employees’ credibility. Therefore, job satisfaction is essential to ensure smooth functioning and productivity. Without it, there can be potential damages such as turnovers, which are genuinely underestimated and can cause huge losses.
3) Opportunities for Walmart:
1. Escalating Online Sales:
Today, online markets make one of the most significant sources of income based on the current trends after COVID-19. Through the expansion of online stores, which can be made available globally, Walmart can reach a new peak level. This could be a trendsetter for other corporations as well!
2. Production of Quality Products:
Walmart has always produced goods at an affordable rate, but sometimes, the essence of quality gets ruined in the process. Being such a big name, Walmart has tremendous opportunities to improve the quality of its products.
3. Improving the Workplace Conditions:
There is always an opportunity for creating an employee-friendly environment by meliorating the workplace conditions, which can in turn increase job satisfaction, which is a booster for better functioning and productivity
4. Global Expansion:
Expansion to various developing countries such as India, China, Korea, and other boosting economies can be fruitful for Walmart. There is a scope of rising in sales and ensures cheaper costs of production and labor. This is an opportunity that Walmart can always take up with many benefits.
4) THREATS for Walmart:
1. High Level of Competition:
Even though Walmart is one of the largest retail corporations globally, it is not free of competition. Many emerging retailed companies like Primark and Costco can threaten Walmart! To maintain its position in the market, Walmart always needs to keep an eye on the market’s development and improve its working environment.
2. Controversies:
One of the significant threats to Walmart is the controversies that have taken place over the years. These were related to social justice or harming elements of society. They can generate excessive criticism, and credibility is lost as a result. Even if the controversies die over time, it gives the rival an edge to use it. And this is where the role of politics comes in and causes more trouble!
3. Server Issues:
Multiple complaints arise relating to the server, which frustrates the consumers. Many times, it gets crashed as a result of poor construction. Walmart, like a giant retail company, can face substantial potential losses. However, it is evitable as it is something that We can work upon.
CONCLUSION:
Now we have learnt ‘Walmart- A SWOT Analysis’, Hence, these are some of the critical aspects in Walmart’s SWOT analysis that we must take into account for better growth. Of course, many other factors influence the working of Walmart, but the ones mentioned here, are some of the pertinent ones that We should consider.
