A SWOT Analysis of Wal mart - the World's largest Company

Here is a brief SWOT Analysis of Wal mart - the World's largest Company.

Brief History

Before we start with the Walmart SWOT analysis here is a brief history of Walmart

At some point Sam Walton, the founder of Walmart, made the decision to achieve higher sales volumes by keeping sales prices lower than his competitors by reducing his profit margin. From this a huge retail empire has grown with nearly 3000 stores in 14 countries yielding the World's largest company in terms of revenue. His mission was:

"to help people save money so they can live better."

Click for more on the Walmart Mission Statement

Here is a simple SWOT analysis of Wal mart:

Strengths

In one store they offer a huge selection of goods at very competitive,if not the best, prices in a one stop store. Because of their size they can get huge discounts from suppliers and so pass these savings on to the customers.

They manufacture they own branded goods as well as supply goods from local suppliers and other major brands.

Their size and buying power is a great strength. They also are frugal in their management style...very careful with how they spend their money and manage their resources.

Weaknesses

Just controlling such a huge organisation is a huge untertaking and in particular managing the employees. Suppliers are always under pressure with regard to price and their ability to supply when required. Becuase of the low prices customers often question and are concerned at the quality of the goods.This is offset to some extent by the satisfaction guarantees offered.

Opportunities

Expansion into other countries and forming partnerships to enter these countries is probably the main opportunity...employing 'more of the same' strategy. Taking over companies overseas is also possible. e.g. ASDA in the UK

Home delivery of orders placed through the internet is a big opportunity. Most stores are on the edge of town and as fuel costs rise people are less likely to want to travel.

Creation of Walmart convenience stores is a strong possiblity. This overcomes local objections and increased travel costs.

In recessionary times...people are looking to save money.

Threats

Local competing vendors hate the possible arrival of Walmart and a lot opposition is likely. Also competition from local convenience stores is likely to increase as travel costs to Walmart increase.

In Europe the expansion of the German retailers, Aldi and Lidl, is growing fast. These companies offer limited stock but are local and are cheap. ALDI is the Southwest Airlines of the grocery business, with efficiency being the name of the game with only 1000 or so stock items against the normal 20,000 to 30,000 items in Walmart.

Although Walmart is huge, competition from similar companies is also likely.

Being successful, they are open to attack on any ethical stance - low pay and poor work conditions, supply of goods from 'poor' cheap labour countries, and environmental issues.

This concludes this brief SWOT analysis of Wal mart

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