strategic analysis Wal Mart

Topics: Strategic management, Wal-Mart, SWOT analysis Pages: 9 (2258 words) Published: June 2, 2015
Strategic Analysis of the Chinese Wal-Mart Based on SWOT
Introduction
The world renowned Wal-Mart is the biggest superstore chain all over the world. It has been found about 50years. With its headquarter in the U.S., Wal-Mart has developed into a giant retailer chain with over 1.9 million associates worldwide and more than 6,800 stores in 14 countries(Wal-Mart, para.1). During these years, Wal-Mart is devoted to offer excellent services with low prices goods to the global consumers and expanding its market worldwide. It was in 1996 when Wal-Mart firstly entered into Chinese market through a way of joint-venture agreement (Wal-Mart Stores, Inc. History, para.4). With the biggest population in the world, China has vast market potential for Wal-Mart. Besides, Wal-Mart is good at operating and can be able to offer good quality products with low prices. Thus the development of Wal-Mart in Chinese market is smooth and efficient. Within 20 years, Wal-Mart builds a network across 170 cities with 400 units and creates 90000 job opportunities (Walmart China Factsheet, para.5). At present, many local Chinese markets enter into market, which divides the market of the Wal-Mart and poses heavy pressure on the running of Wal-Mart. In order to seek effective strategies to enhance the development of Wal-Mart in China, we conduct a strategic analysis of the Chinese Wal-Mart. In this paper, we use SWOT analysis as the tool of strategic analysis because it can enable us percept the company all around with its two dimensions: external factors (opportunities, threats), internal factors (strength, weakness) (SWOT Analysis, para.1). In this model, S refers to the company’s internal strengths, W refers to the internal weaknesses, O refers to the external opportunities and T refers to the external threats (Cheng Yanfei, and Zhang Yafeng, 2012). After the analysis, we can be clear about the advantages and disadvantages of Wal-Mart in Chinese market. Then we come up with possible strategies for the development of Wal-Mart in the near future in Chinese market. 312 External analysis

Opportunities
Primarily, the rapid urbanization in China offers Wal-Mart an excellent opportunity to expand its market (Walmart China Factsheet, para.4). With the fast industrial development, more and more people move from rural areas to the city so as to enjoy more convenient life in various aspects, including good education, entertainment, more job opportunities and so on. Within a few years, the city population gets exploded especially in big cities, such as Beijing, Shanghai, Shenzhen, etc. The increasing number of the citizens requires more places to go shopping, which creates chances for Wal-Mart to build new stores to meet the demand. Besides, the overall macroeconomic surrounding in Chine is favorable (Cheng Yanfei, and Zhang Yafeng, 2012). The worldwide financial crisis in 2008 slugged the economic development in many countries in where the domestic demands are contracted. China still remains the GDP growth rate of 8%. With proper macroeconomic policies, China recovered from the economic recession quickly. In recent years, with the improvement of the industrial structure, the Chinese economic development becomes increasing stable. The average income of citizen is greatly raised, which strengthens the purchasing power of Chinese consumers. What’s more, Chinese government is sparing effort to enhance the domestic demand, which means bigger market potential for Wal-Mart. In addition, the law system is perfected gradually in China, which ensures robust market surroundings where the consumer complaints can be settled down reasonably and supermarkets can compete with each other fairly and equally. In order to motivate the development of market economy, Chinese government emphasizes the importance of building comprehensive commercial legislation system and spares lots of efforts on perfecting the law system. It follows that Wal-Mart can choose the local producers...

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