Last week, Mrs. D’Maggio contacted the Mega-Consulting Group and commissioned to write a SWOT report on Walmart located at 2610 N Prospect Ave in Champaign. It was agreed that the Mega-Consulting Group would conduct a SWOT report of Walmart and submit a full report at the end of July. This is the report of the results of the SWOT analysis.
Walmart is a multinational retail company with chain supermarkets, discount stores, and grocery stores. The general headquarters is in Bentonville, Arkansas. As of January 31, 2018, Walmart has 11,718 stores in 28 countries and more than 1.2 million workers in America. It is not only the largest retailer in the world but also the largest corporation. Walmart’s mission is: ‘We save people money so they can live better.’ It provides a customer-centric experience, allowing customers to shop anytime, anywhere via mobile devices and stores. With the Everyday Low Price strategy, it operates stores mainly for the middle class and lower-middle class. Using its economies of scale, Walmart provides high-quality goods and fresh nutritious food at a low price every day. From grocery and electronics to pharmacy and furniture, Walmart tries to meet the daily needs of every customer.
Firstly, as the world’s largest retailer, Walmart has the dominant market power over suppliers and competitors. With its economies of scale, especially in terms of sales volume, Walmart allocates the fixed costs over various products to control costs.
Secondly, Walmart has developed a variety of sound policies, principles and rules to guide and supervise employees as well as to focus on customer service. For example, the Sundown Rule stipulates that employees should respond to all customers’ questions in a professional manner on the same day they receive the problem.
Thirdly, Walmart has a well-known brand name that has a reputation for convenience and a wide range of products worldwide. The brand has already acquired a large customer base.
Firstly, Walmart’s employee turnover rate is high because Walmart cannot guarantee employees’ basic welfare and only gives them a minimum wage. It can be detrimental to the company’s productivity if skilled workers often leave and existing employees lack motivation.
Secondly, Walmart lacks product differentiation. Walmart is only one of the retailers with the same products and has to compete with stores such as Target and Amazon. In addition to cost leadership strategy, Walmart has no other core competencies.
Thirdly, Walmart has had negative publicity and experienced many lawsuits in recent years. Walmart has been criticized for its practices, such as poor work conditions, unpaid overtime, and discrimination.
Firstly, Walmart can conduct future business in developing countries, such as India and China. Walmart can open up local markets by establishing strategic partnerships with local brands in the emerging markets.
Secondly, Walmart can pay more attention to online shopping and provide customers with the convenience of shopping at home. Walmart can use its regional warehouse to increase the efficiency of its distribution network.
Thirdly, as the trend towards healthy eating, Walmart has the opportunity to launch its own brands associated with this trend, opening a new avenue.
Fourthly, Walmart can use technology-leading information systems for order tracking, customer relationship management, and sales in order to develop supply chain management.
Firstly, the biggest threat Walmart faces is the fierce competition from similar brands inside and outside the U.S., such as Target and Costco. These retailers are working hard to give a reasonable price while offering a more enjoyable shopping experience.
Secondly, some local communities do not like Walmart to enter their area because Walmart’s entry would make it unable for some small businesses to compete on price so that there is no choice but to shut down.