the analysis of Walmart Essay

Submitted By Iris-Qian
Words: 1148
Pages: 5

A retail company can be defined a company sells products in small quantities directly to the ultimate customers. Within different markets, retail companies need to be able to distinguish different needs, include political, cultural, economic, social and technological. There are a number of political needs of retailing activities. The political system, processes and institution raise needs of stability and consistency. In the UK, government itself is the largest employer, which enables it to articulate its policy, like pay restraint in the public sector. (Kent and Omar 2003 36) Government may seek to influence market strategic behaviors and business planning. For example, as the largest retail company in the world, Wal-Mart is considering how to give local government leaders more ownership in the design and location of Wal-Mart retail stores. (Hemphill 2005 18) In the Los Angeles suburb, local government has sought to prevent Wal-Mart from opening, but the company has succeeded to persuade voters to approve their expansion plans. Wal-Mart was as well as defeated by a vote in Contra Costa County. Vekshin has pointed that The company realize that government is so intrusive and affects so much that they feel like its vital that their views are known when policies form (200430) As Wal-Mart opens more stores in metropolitan areas and expands business scope, these political strategies are likely be necessary. As Johnson, Scholes and Whittington stated Powerful cultural forces concerned with history, religion and even climate, organizations that operate internationally have the problem of coping with the very different standards and expectations of the various countries in which they operate. (2005197) For example, as consumer preferences are likely to be different in urban and rural locations, northern and southern. Cultural background may differ significantly in developing countries and developed countries in the world. Retail companies may need to establish different and relevant strategies to satisfy market demands. Wal-Mart advocates creativity and personalization, adopts localization strategy in the local procurement to save costs effectively, adjusts product structure and operating procedure with the local market. When Wal-Mart went into the Chinese market, it may require adjusting the strategies to adopt the specific culture. At the US, the brand Wal-Mart is associated with a low price rather than quality, but in China, where everyone is going for low prices and providing low quality to do so. (Fili 2009) In addition, Wal-Mart has its own brand, low prices, but the company can assure quality and make the name of Wal-Mart more than just a retail company. SWOT summarizes the strengths, weaknesses, opportunities and threats likely to impact on strategy development that arises from such analyses. (Johnson, Scholes and Whittington 201265) IKEAs main strengths on strategies are low product prices with great quality, and affordable, elegantly designed lifestyles, combined with global ranges supplying. Its target market is concentrated on the young, middle and low income groups. It has been emphasized by Hill that IKEAs target market is the young upwardly mobile global middle class who is looking for low-price but attractively designed furniture and household items. (2012 524) Even IKEA gets a long lasting relationship with suppliers to ensure guaranteed orders, and its sourcing is close to suppliers to reduce transporting costs. The companys principal weakness is that its furniture is sold in traditional Swedish retailers, so it may not meet global needs. And it is strongly relied on Europe, most of these stores are located in the region, where is very difficult to address the needs of different customer expectations. Whats more, IKEAs standardized products may attract fewer customers because of questionable advertising and poor customer loyalty. However, IKEA is changing market strategies and counting main weakness with key…