The Mission of the Company
Walmart is a multinational retail giant corporation that came to success through Sam Walton’s exceptional marketing strategies. The core of Walmart’s management combined proficient discounting techniques, neighborhood store format, impeccable market research, and wide product variety. Due to these factors, Walmart became one of the biggest American companies and a highly recognized brand loved by millions of people. Walmart’s mission is to help people save money by buying mass-produced household goods. The central policy is to attract buyers with low prices and high availability of the stores (Ofori-Nyarko et al., 2020). The strategy of low prices is a basis of Walmart’s marketing and economic model; it benefits both customers and the company.
Strengths of the Company
Walmart, being the largest retailer in the world, has many strengths. First, the company derives many benefits from its size. Due to high volumes of sales and purchases, Walmart can ask sellers for lower purchase prices, which it offers to its customers (Pandey et al., 2021). Secondly, the company has a developed network of stores and a powerful logistics system, ensuring fast delivery and filling of stores. Walmart’s global supply chain has suppliers from all over the world. Thus, the company successfully uses discounting as its main policy, providing customers with a wide range and low prices. Because of its scale, Walmart is a well-known and widely recognized brand that is looked to for a convenient shopping experience.
Weaknesses of the Company
Walmart has many weak points and issues holding the company back from growing and quickly expanding to international markets. The first set of problems is connected to the negative publicity that started forming an image of a cheap, unsafe, and discriminatory place. Walmart has a long list of lawsuits regarding employee treatment, working conditions, gender and racial discrimination, and the destruction of culturally significant historic sites (Ofori-Nyarko et al., 2020). In addition, Walmart tried to bribe foreign authorities to secure its international expansion (Shen, 2020). Despite attractive prices and a wide product range, the brand’s negative image significantly influences customer decisions.
Thin profit margins (minimized selling prices lower profit) and quality problems.
Walmart buys goods cheaply and sells them with a small markup. This means achieving a significant increase in sales volumes is necessary to see a rise in profits. During a market recession, a company’s growth stops very quickly (Ofori-Nyarko et al., 2020).
The second set of problems is based on Walmart’s business model, which is not unique and can be easily replicated by competitors. Even though copycat companies do not have the size advantage, they also do not have negative publicity and have a chance to attract clients using Walmart’s favorite low prices strategy.
Opportunities of the Company
Global expansion is the biggest opportunity for Walmart. External market sales in Latin America and China at Walmart are growing faster than domestic sales (Shen, 2020). This means it is beneficial for the company to focus on the demands of developing countries with large populations. Another direction is the continued development of e-commerce, which the presence of offline stores will support. Established supply chains will allow you to gain an advantage in the delivery of goods. Moreover, Walmart needs to start caring about its image and ethics, as modern buyers want to see companies that share their values. On the wave of this public demand, the company can establish contact with customers and begin to get rid of negative publicity.
Threats to the Company
The main threats to the company come from competitors-retailers. Many of them have more advanced technology, like Amazon. Or have a slightly higher quality product and reputation like Target. The economic recession and declining purchasing power are taking a toll on Walmart because of its business model. Furthermore, the company has not kept pace with the e-commerce market, which is currently the fastest-growing way to trade. Given the image of Walmart as a cheap, unethical place that mistreats employees, the company needs to pay attention to trends in changing customer demand. The modern consumer wants to give their money to a company whose values they support.
Strategic Position
The slowdown in profit growth shows that Walmart needs to look for new tactics to build on its strengths (Pandey et al., 2021). The company must continue its international expansion into the markets of developing countries, as there is a demand for cheap goods. With a developed supplier system, Walmart can afford to quickly penetrate the crowded markets of China, India, and Latin America (Shen, 2020).
Wide availability and brand awareness should be used to expand the range of services. Changes in buying behavior dictate the need to improve service levels. It is necessary to continue developing the direction of e-commerce based on the existing network of stores. Although the competition in the e-commerce market is high, the company can offer a successful hybrid option between the opportunity to visit a local Walmart store and order goods from it at home.
References
Ofori-Nyarko, N. S., Wang, F., & Annoh, W. O. (2020) SWOT-analysis: Wal-mart stores Inc. International Journal of Recent Research in Commerce Economics and Management (IJRRCEM), 7(3), 32-35.
Pandey, R., Dillip, D., Jayant, J., Vashishth, K., Nikhil, N., Qi, T. J, Kee, D. M., Mei, T. C., Xin, R. Y. & Qhi, L. Y. (2021). Factors influencing organization success: A case study of Walmart. International Journal of Tourism and Hospitality in Asia Pacific (IJTHAP), 4(2), 112-123.
Shen, Q. (2020). The research of Walmart global expansion. Journal of Finance Research, 4(1), 33-35.