Situational (SWOT) Analysis
Internal Factors (Strengths & Weaknesses)
With a store available in each corner, nationally and internationally, Walmart is a superpower retail brand. Using an immaculate pricing strategy, Walmart has imprinted on the minds of the consumers the “Everyday low prices, rollback, and special buy.” Walmart provides an immense variety of products that reaches all cultures and social levels. “Walmart helps people around the world save money and live better -- anytime and anywhere -- in retail stores, online and through their mobile devices. Each week, more than 245 million customers and members visit our nearly 11,000 stores under 71 banners in 27 countries and e-commerce websites in 10 countries. With fiscal year 2014 sales of approximately $473 billion, Walmart employs 2.2 million associates worldwide” (Walmart, 2014).
Each Wal-Mart is strategically placed near a distribution center so that it will not take more than a day’s drive away. The company also has their own trucking fleet, which lowers the cost of transportation and external transportation sources. “Every distribution center supports 90 to 100 stores in a 200-mile radius” (Walmart, 2014).
By having a broad product/service portfolio, Walmart is able to fully serve its customers, filing nearly every void in the customer’s lives with enjoyable service. “Designed to provide a pleasant and hassle-free shopping experience, Wal-Mart Supercenters are enhanced with wide aisles, helpful signing throughout the store, departmental directories and 24-hour service. Supercenters are also equipped with a customer service desk and scanning registers for fast, efficient checkout service” (Royal Properties, n.d.).
Walmart main weaknesses relates to negative publicity surrounding violation of employee’s rights and the “cannibalization of mama and papa stores” to expand the business in metropolitan areas. “While Wal-Mart isn’t the only big box store criticized for its policies, it has become a symbol for much of what is wrong with employers. Wal-Mart reported a net income of over $11 billion last year—surely plenty of money to remedy some questionable workplace practices—yet stories persist about wage law violations, inadequate health care, exploitation of workers, and the retailer’s anti-union stance. Altogether, some 5,000 lawsuits are filed against Wal-Mart each year, or roughly 17 suits per working day” (Workplace Fairness, 2014).
It has been longed argued that Walmart destroys the completion once it establishes a new store, especially in a metropolitan area. “Wal-Mart Stores Inc., which became the nation’s larg3est retailer by offering its customers low prices, tried to force competitors out of business with that policy, a judge ruled Tuesday” (Daily News, 1993). This has been a heated argument over the years, and one can find as many supporters as opponents to this idea. “Another argument is that Walmart destroys business around it. Anecdotal evidence of an occasional business taking a hit is presented to back this belief. But what are the real facts? The law of supply and demand dictates that when demand increases, so does the price. The evidence is clear: when a Wal-Mart opens, the price of commercial real estate around it skyrockets. The only reason for it is the increased demand from other businesses who seek to be near a superstore that functions as a center that attracts customers to the area” (Berke, 2013). However, one can still argue that these “other businesses” are most likely not mama and papa stores that will not have a slight chance to complete against the supergiant Walmart. External Factors (Opportunities and Threats)
Expansion, expansion, and expansion is the word when it comes to Walmart new opportunities. Walmart is doing extremely well on a national basis and perhaps the supergiant must switch its focus a little to its international ventures. Walmart needs to