Modified SWOT Analysis-Walmart

Modified SWOT Analysis-Walmart

Introduction

Company Description

Walmart is a US-based retailer engaging in wholesale, retail, and other business units worldwide. Walmart offers a wide range of merchandise and services to its consumers. Walmart operates under three business segments: Walmart, Walmart International, and Sam’s Club. The Walmart business segment is based in the US and offers consumer products. It operates under Walmart, Walmart, Walmart Neighborhood, and other e-consumer brands.

On the other hand, Walmart International operates hypermarkets, supermarkets, and cash stores. Finally, Sam’s Club focuses on membership-only warehouses and online platforms like samsclubs.com. Walmart is primarily known for offering goods at relatively lower prices than other retailers.

The SWOT Analysis Diagram

 An Evaluation of How Specific Internal Factors Support Competitive Advantage

Human Resources

Spencer (2019) emphasizes the need for extraordinary customer service in globalization. Recognizing this emerging market need, Walmart undertakes an internal human resource development program. Employees are trained on how they can improve customer service. Remarkably, the programs are designed to improve customer service in the face of poor reputation among the public. In addition, employees are trained to be customer-centered to bolster customer loyalty and improve the overall customer experience in all stores.

Patents

Walmart is also known for its rich collection of patents. Apart from the US, its home country, Walmart has patents in other jurisdictions such as Canada and the UK. These patents help the company raise significant revenue. The patents have bolstered the company’s research and development strategy in the US.

Employee Programs

Despite Walmart’s poor employee remuneration record, the company undertakes some employee engagement programs that bolster its competitive advantage. One such program is the college for just a dollar a day. Through the Live Better U program, Walmart facilitates its employees to acquire associate’s and bachelor’s degrees in business, supply chain, healthcare, and management, among other courses. Even though internal career progression is not assured, such a program attracts and motivates employees. In addition, young employees may be willing to work for the company if it offers them a chance to advance academically.

Large Organizational Size

The company’s sizeable organizational size allows it to expand its business (Serwaa Ofori-Nyarko et al., 2020). For instance, lately, South Asia, Brazil, and other emerging markets have proven to hold much potential for the company. On the other hand, entering such markets requires many resources that most retailers lack. Walmart’s size means it can gather fortunes from other subsidiaries and commit the resources towards expanding globally.

Evaluating How External Factors Affect Walmart’s Competitive Advantage

Market Trends

One of the key market trends affecting Walmart’s operations is the emergence of e-commerce. The internet has fueled the emergence of e-commerce, and it seeks to improve buyer experience. Notably, Walmart has been particularly keen on leveraging online retail platforms to enhance its competitive advantage (Adebayo, n.d.). On the other hand, there is concern about whether Walmart will manage to promote its products with discounts since they have seemingly exhausted the window to offer more discounts. The company will likely face solid competition from established e-commerce giants like Amazon.

Economic Trends

Since the recession, the US GDP has reduced, and consumer spending habits have significantly changed (Adebayo, n.d.). Subsequently, that has reduced revenue from the mother country, pushing the company to venture into other countries. For instance, Walmart started operations in European countries like Germany when they realized they could not continue to rely only on the US market. Even so, such countries already have established retailers, making it hard for Walmart to thrive.

Demographics

One of the demographic factors that affect retail business in the US is the emergence of the grandparent economy (Tootelian & Varshney, 2010). The grandparent economy consists of individuals aged above 65 years. Notably, research shows these people have adequate resources and time to shop. However, most retailers, including Walmart, might have missed these critical insights. As such, the company tends to favor millennials in its research, hoping that younger shoppers will make an impact. As a result, they ignore this critical demographic, leading to a loss of revenue. One of the assumptions retailers make is that people over 65 will mostly shop for health products; hence, there is no need to consider them much while formulating strategies. The grandparent economy is still active as these individuals shop for their younger dependents.

Regulations

Walmart regularly interacts with government policies since it is a nationwide retailer. Besides, the retailer’s participation in global supply chains means it is affected by the US government’s trade policies. At the state level, the company has been targeted by laws and policies that seek to improve employees’ welfare. One such policy is Maryland’s “Fair Share Health Care Act,” passed in 2006, targeting companies with over ten thousand employees (Basker, 2007). The Fair Share Health Care Act specifically targeted Walmart since it is the only company that passed the threshold of 10,000 employees in the state. Walmart has about 15,000 employees in Maryland State. A judge later overturned the law, but other states are following suit. Another regulatory policy that will hurt Walmart is the minimum wage policy (Basker, 2007). These laws will force Walmart to cut its workforce to cater to more costs if passed.

Conclusion

In summary, Walmart’s large-scale operations are the source of its competitive advantage in the market. To that end, Walmart is a beneficiary of economies of scale. The company accesses products at relatively lower prices and sells at lower prices, thus attracting more customers. Other benefits of economies of scale are passed down the distribution network. Apart from economies of scale, Walmart also benefits from an efficient supply chain network. Walmart’s digitized supply chain management system ensures a continuous flow of raw materials, thus reducing the likelihood of shortages. The digitized supply chain also enables the company to maintain its price advantage and keep its costs in check.

References

Adebayo, R. (n.d.). Walmart swot analysis. Www.academia.edu. https://www.academia.edu/8451578/Walmart_swot_analysis

Basker, E. (2007). The Causes and Consequences of Wal-Mart’s Growth. SSRN Electronic Journal, 21(3). https://doi.org/10.2139/ssrn.950882

Serwaa Ofori-Nyarko, N., Wang, F., & Annoh, W. (2020). SWOT ANALYSIS: WAL-MART STORES INC. International Journal of Recent Research in Commerce Economics and Management (IJRRCEM), 7, 32–35. https://www.paperpublications.org/upload/book/paperpdf-1595065803.pdf

Spencer, T. (2019). Walmart’s HR Strategy to Pursue Competitive Advantage HRER 825: Strategic Business Tools for HRER Professionals. Academia.edu. https://www.academia.edu/24413863/Walmarts_HR_Strategy_to_Pursue_Competitive_Advantage_HRER_825_Strategic_Business_Tools_for_HRER_Professionals

Tootelian, D. H., & Varshney, S. B. (2010). The grandparent consumer: A financial “goldmine” with gray hair? Journal of Consumer Marketing.

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Successful businesses regularly analyze their processes to ensure they operate as efficiently as possible and maintain their competitive advantages. Although you can assess a company in many ways, a common technique is the SWOT analysis. In this assignment, you will practice using a SWOT analysis to understand better the factors involved in making business decisions that promote sustainable competitive advantage.

Modified SWOT Analysis-Walmart

Select and research a company from the 2019 Fortune 500 list demonstrating a sustainable competitive advantage in the marketplace.

Evaluate the selected company’s sustainable competitive advantage using the SWOT analysis technique.

Write a 700- to 1,050-word modified SWOT analysis that includes the following:

An introduction with a detailed description of the company
A SWOT analysis diagram that includes strengths, weaknesses, opportunities, and threats
An evaluation of how specific internal factors (strengths and weaknesses) support and/or promote a competitive advantage; examples may include:
Financial, physical, or human resources
Access to natural resources, trademarks, patents, or copyrights
Current processes (employee programs or software systems)
An evaluation of how specific external factors (opportunities and/or threats) support and/or promote a competitive advantage; examples may include:
Market trends (new products or technology advancements)
Economic trends (local and/or global)
Demographics
Regulations (political, environmental, or economic)
Conclusion with an evaluation of how the company has retained its competitive advantage