Walmart Business Environment

Walmart Business Environment

Introduction

Walmart is a large global retail company that has maintained a competitive advantage over the past decade. The company was established in 1962 in Rogers by Sam Walton. During that time, Walmart operated as a foundation offering different products to customers in different regions within Arkansas at low prices. As such, the company aimed to make a difference in people’s lives and help communities and customers save money so they could live better lives. In 1980, the company experienced rapid growth after diversifying its product portfolio. Since then, it has expanded operations to different countries worldwide, thus dominating the retail industry. Walmart currently has more than 4,000 retail stores across the wordlist and is also the leading retail company in Mexico, Canada, and the United Kingdom. The low prices principle has enabled the company to acquire a large market share globally and stay ahead of competitors despite the stiff competition in the retail industry. It can also successfully negotiate deals for goods directly from manufacturers, thus preventing delays in the supply chain. Do you need urgent assignment help ?  Our homework help will you tons of energy and time required for your homework papers.

SWOT Analysis

Strengths ·         The largest retailer in the world ·         Strong brand image ·         Effective global logistics and supply chain system ·         Highly skilled employees ·         Proper resource management ·         Strong control over competitors and suppliers ·         A wide range of merchandise	Weaknesses ·         Thin profit margins because of the low-price strategy ·         Unfair labor laws ·         Poor working conditions because employees working full time must work without sick leaves and off days ·         High employee turnover ·         Overdependence on sales in the United States market
Opportunities ·         Expansion into different global markets ·         Improving human resource management to reduce employee turnover ·         Adding product categories ·         Same-day delivery options ·         Collaborations, mergers, and acquisitions	Threats ·         Laws and regulations concerning wage and work benefits ·         Lawsuits that could damage the company’s reputation ·         Stiff competition from large retailers such as Amazon ·         Trade tensions ·         Economic uncertainty

 

An Evaluation of How Specific Internal Factors Support/Promote a Competitive Advantage

One internal factor that promotes Walmart’s competitive advantage is employee programs. Walmart has a training program for all its employees to equip them with the knowledge and skills required to meet its expectations. According to McFarland & Ployhart (2017), employee training creates a competitive advantage by ensuring that employees’ skills are updated based on the changes in the business environment. The second internal factor is physical stores. The company has more than 4,000 stores worldwide and a collection of items targeting different customers. Therefore, the company can leverage the stores and product catalog to increase its market share, thus creating a competitive advantage. The third internal factor is an effective supply chain. According to Ha Nguyen (2017), Walmart’s integrated supply chain enables it to maintain a dominant position in the retail market because merchandise is always available to meet customer demand. The company’s effective supply chain also enables it to minimize inventory. Wild (2017) argues that minimizing inventory enables organizations to reduce operating costs, thus creating a competitive advantage. The fourth internal resource is the company’s copyrights and trademarks. The company uses copyrights and trademarks to protect its logo, which is among the symbols that help customers distinguish it from competitors.

An Evaluation of How Specific External Factors Support/Promote a Competitive Advantage

One external factor that promotes the company’s competitive advantage is access to foreign markets. Walmart can leverage its access to foreign markets to expand its operations into the markets, thus increasing its customer base and profits. The second resource is technological advancements. According to Abbade (2014), technological advancements have increased online purchases. Therefore, Walmart can benefit from technological advancements by attracting more customers to purchase merchandise on its website, resulting in an increased competitive advantage. The third resource is favorable regulations, creating fair competition in the business world. Therefore, Walmart can fairly compete by increasing customer value and implementing its low-price strategy to attract more customers. The fourth resource is economic trends. Many countries are developing economically, leading to an increase in household income and disposable income. Consequently, Walmart may benefit from economic growth because customers can afford the products offered at different prices. The changes in customer demographics also create an opportunity for Walmart to add a product category to increase its customer base, thus increasing its competitive advantage.

Conclusion

The retail industry is rapidly growing due to the rise of e-commerce and free market entry, allowing small retailers to join the market. The growth of small retailers may affect Walmart’s customer share, especially in new markets, hence the need to focus on increasing customer loyalty to retain its customers and competitive advantage. Currently, the company has managed to stay competitive by identifying opportunities and leveraging them. For instance, the company has expanded into new markets to increase its competitive advantage. The company has also retained a competitive advantage by setting low prices and offering a wide range of products. Walmart’s competitive advantage is also linked to its operating strategy, which includes selling merchandise online through its e-commerce platform and products through its physical stores in different regions. However, despite the success in retaining its competitive advantage, the company faces the risk of losing it due to lawsuits linked to poor working conditions and increased competition from large and small retailers.

References

Abbade, E. B. (2014). Technological readiness and the propensity of young people to online purchases. Revista de Negócios, 19(1), 27. https://doi.org/10.7867/1980-4431.2014v19n1p27-43

Ha Nguyen, T. T. (2017). Wal-Mart’s successfully integrated supply chain and the necessity of establishing the Triple-A supply chain in the 21st century. Journal of Economics and Management, 29, 102-117. https://doi.org/10.22367/jem.2017.29.06

McFarland, L. A., & Ployhart, R. E. (2017). Strategic training and development and their role in shaping competitive advantage. The Cambridge Handbook of Workplace Training and Employee Development, 545-565. https://doi.org/10.1017/9781316091067.025

Wild, T. (2017). Supply chain inventory management. Best Practice in Inventory Management, 217-237. https://doi.org/10.4324/9781315231532-16

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Successful businesses regularly analyze their processes to ensure they’re operating as efficiently as possible and maintaining 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 better understand the factors involved in making business decisions that promote sustainable competitive advantage.

Select and research a company from the 2019 Fortune 500 list that demonstrates 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/or 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