Examining Walmart SWOT Analysis is one of the most effective ways to identify the key strengths and weaknesses of the company. Today, Walmart is the biggest global retail company in the world, with an employee base of 2 million.
This makes it one of the largest private employers in America. Despite economic recessions, Walmart’s retail market share hase always continued to rise. In this detailed guide, we’ll be discussing some important internal and external factors that have played a pivotal role in shaping Walmart into the company it is today.
Strengths in Walmart SWOT Analysis
Largest Retailer in the World
Being the largest retailer in the world, Walmart has an unprecedented advantage over other competitors. This has allowed Walmart to gain a stronghold over the market, owing to its unmatchable level of operations and enticing marketing campaigns and slogans.
Apart from being the world’s largest company in terms of revenue, Walmart has also positioned itself as the world’s largest private employer has more than 2.3 million employees.
Because of size, Walmart has immense power over competitors and suppliers. The company can easily exercise its market power over suppliers by demanding lower prices from them.
Perhaps one of the biggest strengths of Walmart lies in its brand name. The company is not only household to people in the US but also internationally. Additionally, Walmart has an incredible success story as it started off on a humble note but has ever since then transformed into an industry leader.
Over the years, Walmart has been able to push ahead of competitors by embracing advanced technology. The company utilizes voice and video communication to facilitate employees and streamline the flow of sales. This also makes it easier for employees to keep track of inventory information from the corporate headquarters.
In addition to Walmart’s technological competitive edge, the company continues to make incredibly smart strategic decisions that pool in large revenue sources.
Weaknesses in Walmart SWOT Analysis
Thin Profit Margins
Because Walmart uses a cost leadership strategy, it has to deal with thin profit margins. Walmart generally minimizes selling prices and thus relies more on sales volume to compensate for low-profit margins. Another downside here is that Walmart’s business model is fairly easy to imitate so because of this, the company does not have many competitive differentiators except for its enormous business size.
Despite its stellar growth in terms of numbers and revenue, Walmart has yet to improve its human resource department and adopt better standards. This is important as employee satisfaction and motivation are essential to the success of any organization.
Over the years, Walmart has had many cross-cultural diversity issues in terms of recruitment. Employees have also made several complaints regarding poor remuneration. There have been many cases of public outcry as employees have gotten together on public domains to against the company. It’s worth mentioning that work-life balance and proper remuneration is important to nurture the organization.
Opportunities in Walmart SWOT Analysis
Form Alliances with Global Retailers
In terms of growth and building brand portfolio, Walmart has tremendous opportunities. The company is likely to succeed if it plans to expand itself in a new consumer market or form alliances with global retailers.
Currently, Walmart only trades in a few countries which is why it should move forward and work on its expansion. Some major markets to experiment with include India and China.
Introduce Healthier Options
As consumers are gradually moving towards healthy eating, Walmart has tremendous opportunity to benefit from this growing trend. It can do so by introducing special organic, gluten-free or sugar-free options. Similarly, Walmart can also introduce healthy smoothie or salad bars so that consumers can get a quick healthy fix while grocery shopping.
Threats in Walmart SWOT Analysis
Unfortunately, Walmart has received several lawsuits regarding discrimination, unfair treatment of employees, unpaid overtime, unfair promotions, poor work environment and so on. Not only has this earned the company a bad reputation but it has also cost the retailer significant amount of money.
To overcome this problem, Walmart must move past the cold approach it uses to handle and treat employees. Over the years, the company has already tarnished its reputation and public image as far as handling women remuneration are concerned. What’s worse is that Walmart has enticed the wrath of worker unions that have previously united only to discredit the company for its unfair employment policies.
Intense Price Competition
The price of manufacturing products has significantly fallen as companies have turned to outsourcing manufacturing services to low-cost countries. This has led to price deflation in some regions, resulting in price competition.
Wrapping it up
We hope you’ve benefited from our detailed SWOT analysis of Walmart. Have something to add? Please tell us in the comment section below.