The first significant strength that is inherent to Walmart is brand recognition – there are millions of actual and potential clients in the market that know the company and demonstrate a good attitude towards it. This contributes to a stable customer inflow, which is important for the corporation’s financial success in the long run. Then, Walmart adheres to the approach of global presence and enhances it with an efficient low-prices strategy, supply chain, and HR management (Walmart Inc., 2021). In conjunction, these factors result in a great overall performance and reputation. However, there are also some weaknesses, among which is a considerable span of control that is the other side of the global expansion strategy. There also have been some concerns regarding the company’s employee treatment – starting from racial and gender discrimination and ending with safety problems. The mentioned weaknesses adversely affect Walmart’s value creation, especially in terms of reputation which is a crucial asset of any big corporation.
Opportunities and Threats
Walmart is involved in the global retail market, and it seems the risk of new entrants is considerable here. SMEs are among the essential drivers that stimulate the economy today. However, acting at the same scale and efficiency as Walmart requires vast investments, experience, and time. Hence, this competitive force is medium for the company for now. Bargaining powers of buyers and suppliers are low, given that Walmart deals with many small customers daily and cooperates with a plethora of suppliers. Moreover, there are low switching costs and little forward integration. The threats of substitutes and complement providers are also low. Walmart can offer a wide range of products; hence, it is not like that an item not available in Walmart is available among competitors. However, some of these competitors are great rivals – Target, for instance – and they contribute to the medium-to-high threat of competitive rivalry for the corporation. It should be noted here that there are no extremely high threats for Walmart, and the industry is at its mature stage at the moment.
Walmart has several notable corporate-level strategies, and the public affairs one can be considered crucial in this regard, given that its mission is to serve as many customers as possible around the globe. It is essential for the company’s success in the long run because it contributes to room for expansion into different market segments (Walmart Inc., 2021). Due to this approach, the corporation forces itself to focus on client satisfaction and being involved in various community activities, which are crucial goals for Walmart. Now, customers have become more conscious of organizations that help society. Hence, people tend to feel that shopping in Walmart gives them the possibility to be a part of significant shifts in today’s world. This is an important aspect of luring new and keeping actual clients.
Walmart seems to adhere to the principle of cost leadership in terms of its business-level strategy. The low-cost approach was chosen because big store chains utilize this strategy to lure customers and enhance sales. It seems to be a good option for Walmart because cost leadership ensures that clients will be attracted to its products continuously. This aligns with the company’s strength of global presence and opportunity to expand, given that the company gets an advantage over rivals. Moreover, a low-cost strategy creates serious entry barriers for potential new actors in the market. The two latter statements stress that Walmart’s functional competencies are sufficient for achieving the SWOT strategy.
As mentioned above, Walmart gains benefits from its global presence and expansion. It operates in numerous markets worldwide and offers its customers products at significantly low prices, which ensures constant client inflow. The company has been following this approach for years, and it seems to be quite efficient. However, the organization does not tend to spend much on its innovations, and most expenses in this vein are directed at particular little aspects within its supply chain. Within this scope, it might be suggested that Walmart could invest in the automatization of its services, which would enhance its reputation and customer care.
There have been some issues in terms of Walmart’s employee treatment, such as gender or racial discrimination, which adversely impacts its CSR. Human resources are an extremely valuable asset of the firm, and the company can launch several public campaigns and internal seminars aimed at dealing with the problems. The organization also should pay attention to the localization of its advertising, given that cultural differences should be considered while implementing a global expansion approach.
The company has demonstrated quite unstable profits through the years; the same is inherent to its cash flow (WSJ, 2021). However, it should be noted that Walmart’s liquidity ratios have improved from 2020 to 2021 (Stock Analysis on Net, 2021). Then, “Due to repayments of liabilities of -6.83% Walmart Inc improved Leverage Ratio in second quarter 2021 to 1.81, above company’s average Leverage Ratio” (CSI Market, 2021, para. 1). These indicators suggest that the company should stabilize its profit margins. It can be achieved by improving quality and increasing costs for products to an exact extent, while still acting following the low-cost approach.
Walmart could improve the quality of its products to an exact degree, increasing prices a little bit – low-cost but high-quality offers would be preferable for customers. To achieve this, the company can establish several strategic alliances, which stay in line with its approach to global expansion. Then, enhancing healthcare services and HR practices could help the corporation deal with the issues related to employee treatment.
CSI Market. (2021). Walmart Inc (WMT). Web.
Stock Analysis on Net. (2021). Walmart Inc. (NYSE: WMT). Web.
Walmart Inc. (2021). Walmart annual report 2021. Web.
WSJ Markets. (2021). Walmart Inc. Web.