Juan Carlos Escobar
BUS 137 20 Principles of Management
Dr. Harry J. Caldwell
March 21, 2013
SWOT Analysis – Wal-Mart
In the study of management is very interesting making an analysis exercise of a market company like Wal-Mart which has revenues greater than the Gross Domestic Product (GDP) of many countries. The last fiscal year, ended January 31 2013, Wal-Mart reported revenues of 466,1 US billion (Walmart Inc., 2013). This amount is greater than the last GDP reported by Colombia of USD 362,2 billion or Argentina of USD 347,3 (Portafolio 2012). If this company, Wal-Mart, were a country it would rank as a rich country just below South Africa and above Switzerland, Belgium, Venezuela, Austria, Chile and Others (World Fact Book, 2012). Not only is amazing analyzing a company which its revenues are bigger than entire countries’ economies and trying to determine which are the factors for this success, what things has this company constructed, what are its strengths, how is it dealing with competitors, and what are its core competences but also leaves many lessons. Wal-Mart was founded in 1962 by Sam Walton when he opened the first Wal-Mart Discount City in Rogers, Arkansas. It went public in 1972 when was the first retail stock traded on the New York Stock Exchange. In 1983, it opened the first Sam’s Club membership warehouse and in 1988 opened the first Wal-Mart supercenter, which features a complete grocery department in addition to general merchandise. In 1991 through a joint venture with Cifra, a Mexican retail company, Wal-Mart went global, opening a Sam’s Club in Mexico City. In 1996 Wal-Mart opened its first stores in China. In 2002 Wal-Mart entered the Japanese market through its investment in Seiyu, and in 2010 Bharti-Wal-Mart, a joint venture, opened its first store in India (Walmart History Timeline, 2013). Today, celebrating more than fifty years, Wal-Mart is operating its everyday low price model at more than 10,700 retail units in 27 countries. Each week, more than 200 million customers and members visit its stores under 69 banners and e-commerce websites in 10 countries. Wal-Mart employs 2.2 million associates around the world - 1.4 million in the U.S. alone. The average, full-time hourly wage is $12.67 (Walmart Investors, 2013). By the end of the fiscal year 2012 Wal-Mart had 10,130 store units. Of these stores, 4,479 were in the USA and 5,651 were internationally (Walmart 2012 Report). According to this data in 2013 Wal-Mart has started more than 570 store units around the world. For the fiscal year ended January 2013, Wal-Mart increased net sales by 5% to $466.1 billion and returned $13 billion to shareholders through dividends and share repurchases. Of these $5.4 billion in dividends were paid for the year. Wal-Mart ranked second on the 2012 FORTUNE 500 list of the world’s largest companies by revenue. In the same period, fiscal year 2013, Wal-Mart U.S. net sales were more than $274 billion, and Sam’s Club net sales were more than $56 billion. Today in the U.S., Wal-Mart operates more than 4,600 retail facilities, including Wal-Mart stores and Sam’s Club warehouse. Wal-Mart International net sales were $135,2 US billion. Wal-Mart has created stores with different styles and formats to fit in with local customer needs and customs. More than 90% of their international stores operate under a banner other than Wal-Mart. The numbers included in the annual report of 2012, the earnings release for Q4 of the fiscal year 2013, the general statements about strategy, management, and projections included in both reports, and the information available in the multiple web pages of Wal-Mart corporate website allows analyze the following strengths, opportunities, weaknesses and threats. Strengths:
Purchase Power. Undoubtedly Wal-Mart is a market leader with unprecedented scale. Today Wal-Mart is the largest retailer in the world. This scale gives Wal-Mart a very large purchasing...