SWOT ANALYSIS OF WAL-MART

SWOT Analysis of Wal-Mart

SWOT Analysis of Wal-Mart

Introduction

Wal-Mart is an American company that is engaged in retail sales, its founders were Sam and James L. Walton, starting with its first store in 1962, in the city of Rogers, Arkansas.

Wal-Mart Stores Inc, began its internationalization strategy in Mexico in 1991.

As Wal-Mart is growing in new markets, has not taken off of its organizational culture. When a customer walks into any Wal-Mart, in one of the nine countries where it operates, you can be sure that you get low prices and enjoy a genuine customer service. Their culture is based on the customer feel at home in any department in any store anywhere.

A very important aspect of Wal-Mart is that they want each store, depending on where it is located, reflects the values and culture of the inhabitants of that place.

SWOT ANALYSIS

Wal-Mart Stores is the largest retailer with unprecedented scale and clout which will enable it to maintain its market position and continue to gain market share from competitors. However, with over two million employees, rising labor and healthcare costs will significantly affect Wal-Mart's profitability.

Strengths

A market leader with unprecedented scale gives a competitive advantage Wal-Mart is the largest retailer in the world. The scale of its operations is unprecedented and there is no competitor of comparable size. The company has been expanding its clout; international operations contribute between one fourth and one half of these metrics. The company dominates the US retail landscape and is growing internationally at a fast pace.

Wal-Mart, being a market leader, is able to replicate its best practices constantly on an unmatched scale both in the US and across the world. Also, Wal-Mart offers a large variety of products.

Its dominant position and range of products allows the company to quickly shift the product mix to meet demand and benefit from increased sales. For example, by changing floor space allocation, Wal-Mart can benefit from low-income consumers' growing preference for consumable staples instead of discretionary items.

Weaknesses

Big box retailing format led to low penetration into urban areas. Wal-Mart is a big box retailer and operates supercenters which require large space for every new store. This is limiting expansion of Wal-Mart stores in urban areas where there is limited space available and limited commercial spaces which can provide such large spaces. Wal-Mart's massive stores can combine a grocery store and a discount store under one roof. Building huge stores made sense when suburban landscapes were wide open and baby boomers were moving away from cities.

Easy access to credit fueled customer demand for larger homes and all the trappings that went with them. But trends now suggest that big stores are less attractive. Baby boomers are scaling back, moving into smaller homes closer to urban areas. The housing market crash also means new neighborhoods are not springing up to support retail centers. With the latest urban focus, retailers are expected to invent formats that differ dramatically from current ones.

Although the company's management believes that there are several opportunities ...