The world’s largest company by revenue – over US$500 billion, Walmart is an American multinational retail chain that operates a chain of hypermarkets, discount department stores, and grocery stores and also the largest private employer in the world – employing 2.3 million employees.
Understand the SWOT Analysis of Walmart and learn as to what factors helped it in its growth and what factors can pose a problem for the company in the future.
SWOT Analysis of WALMART
Strengths describe the factors that which the organization is good at and what separates it from its competitors.
–GLOBAL PRESENCE: A world-recognized retail brand with over 11,200 retail units under 55 banners in 27 countries and eCommerce websites in 10 countries, Walmart’s global presence is one of its major strengths.
—LOYAL CUSTOMER BASE: Over 56+ years of serving customers, Walmart has managed to build its own strong loyal customer base.
–PRODUCT PRICING: One of the major factors that have supplemented the growth of the brand is the pricing of its products. Walmart has used penetration pricing for all its products making it accessible for customers from every walk of life.
–STRONG SUPPLY CHAIN AND DISTRIBUTION CHANNEL: With a total of 11,000+ retail outlets all over the world, Walmart has a strong supply and distribution channels. It sells products under 55 banners in over 27+ countries and only a strong supply and distribution channel can help suffice the brand’s product requirements.
–TECHNOLOGY ADVANCED BACKEND: Walmart uses technologically advanced information system for its customer relationship management, tracking orders and inventory and sales, all these can be tracked real-time for better decision making and more efficient supply chain management.
–WIDE RANGE OF PRODUCTS: You think of a product and Walmart will have it in its product portfolio. One of the biggest strengths of Walmart is the wide variety of products that it offers to its customers at reasonable prices.
Weaknesses stop an organization from performing at its optimum level. They are areas where the business needs to improve to remain competitive:
— PRICING STRATEGY: Using Everyday low pricing strategy leave the brand with very fewer profit margins. Increasing Labor cost, and increasing competition will play a crucial role in shaping the pricing strategy of Walmart in the future.
Threats refer to factors that have the potential to harm an organization in the future. Given the fact, threats give a brand a far-sighted view about the problems that the brand is likely to face in the future, it is one of the most important factors in the SWOT Analysis of Walmart.
–COMPETITION FROM OTHER RETAIL PLAYERS: Walmart’s biggest threat is competition from players like Target, Costco, Amazon, Tesco, and Carrefour. These retailers have the same business model as of Walmart and making their organizations more efficient to shrink the price difference between them and Walmart.
–THREATS FROM LOCAL COMMUNITIES: Increasing social threats from local communities that think Walmart’s presence can hurt the small business owners, essentially shutting them down because they cannot compete on price and selection. This backlash continues throughout the world and also can lead to a tarnished brand reputation.
–INCREASING LABOR COSTS: Increasing labor cost and the cost of employee training will surely hit the profit margins of the company and will force the brand to rethink on their pricing strategy.
Opportunities refer to the factors which the organization can use to its favor to grow its market share, sales, brand recognition etc. It’s the second most important factor in
–EXPANDING TO OTHER GEOGRAPHIES: With the portfolio of products and the pricing strategy that Walmart has, the brand has a huge potential to expand its operations in other developing countries.
–GOING DIGITAL: With the world going digital, Walmart has a great opportunity to expand its online store and presence. Walmart has already started using this strategy by acquiring some of the major e-commerce giants like Flipkart etc to sell its products through digital channels.
Conclusion
There are a number of challenges that Walmart faces but still, it’s the strong brand equity, current market position, and the opportunities that pose a strong growth in the future for the brand.
This concludes the SWOT analysis of Walmart.
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