Swot Analysis – Wal-Mart

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Best positioned global retailer
Established business objective & philosophy that is understood organization wide •Firm focus on the strategy of cost leadership by offering everyday low prices (EDLP) through everyday low costs (EDLC) •Efficient procurement and logistics system

Strong and stable financial performance and positive cash flows for reinvestment in improving operations

Significant dependence on the US market to maintain strong sales performance •Wal-Mart’s mass market approach as a retailer creates opportunities for ‘market nichers’ to capture specific market segments which may be overlooked. •Wal-Mart’s extensive range of products limits its ability to give direct attention to understanding all its customers as opposed to its more focused competitors. •FIFO method of accounting for inventory, in the international markets, may not effectively support the strategy of everyday low prices.

There are opportunities to expand in countries with emerging economies •There are also opportunities to resuscitate growth in the US market •Innovations in technology present the opportunity to further integrate the value chain for increased efficiency to drive EDLC.

The unstable economic climate in the USA will continue to negatively impact on Wal-Mart’s performance •Wal-Mart can lose customers to more focused competitors if they (competitors) are able to develop a value proposition greater than the simple offering of everyday low prices. •Wal-Mart’s global exposure exposes the organization to currency risk, political influences, and other uncertainties that can affect its operations. •Wal-Mart’s cost leadership strategy creates intensive price competition which poses a serious risk to profitability if operational costs are not effectively managed.

Wal-Mart is a large retailer that is keenly focused on the business philosophy of saving people money so they can live...
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