Walmart SWOT Analysis
Wal-Mart Stores (Wal-Mart or "the company") operates retail stores in various formats across the world. In the US, the retail formats operated by Wal-Mart include discount stores, supercenters, neighborhood markets, market side, and Sam's Clubs. Internationally, the company operates in Argentina, Brazil, Canada, Chile, China, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico and the UK.Wal-Mart is headquartered in Bentonville, Arkansas and employs 2.1 million people. The company recorded revenues of $408,214 million during the financial year ended January 2010 (FY2010), an increase of 0.9% over 2009. The operating profit of the company was $23,950 million in FY2010, an increase of 5.1% over 2009.The net profit was $14,335 million in FY2010, an increase of 7% over 2009.
Wal-Mart Stores (Wal-Mart or "the company") operates retail stores in various formats across the world. In the US, the retail formats operated by Wal-Mart include discount stores, supercenters, neighborhood markets, market side, and Sam's Clubs. The company is the largest retailer with unprecedented scale and clout which will enable it to maintain its market position and continue to gain market share from competitors. However, with over two million employees, rising labor and healthcare costs will significantly affect Wal-Mart’s profitability.
A market leader with unprecedented scale gives a competitive advantageLow cost leadership enabling Wal-Mart to offer products at low priceInternational strategy – a strong foundation for growth as the US market matures
| Big box retailing format led to lowpenetration into urban areasLitigations affect labor relations adverselyTarget’s superior merchandising capabilities to appeal more to the customers as the US economy revives
Outperformance of the retail sectors inemerging marketsConcentration on grocery and food willbenefit as eating at home, health and wellness trends continue to emergeGrowth in internet retailing to serve largermarket
| Two million employees increases exposure to increasing wages and high healthcare costsVolatility in commodity prices and costinflation will pressurize marginsIncreasing resistance to expansion fromlocal organizations and authorities
A market leader with unprecedented scale gives a competitive advantage Wal-Mart is the largest retailer in the world. By the end of January 2010, Wal-Mart had more than $400 billion in revenue, $24 billion in operating income, 8,500 stores, and nearly 1 billion square feet of space. The scale of its operations is unprecedented and there is no competitor of comparable size. The company has been expanding its clout; international operations contribute between one fourth and one half of these metrics. At about 10% and 20% of total retail and grocery sales in the US, respectively, according to figures from the U.S. Census Bureau, Wal-Mart US is an integral part of consumers' budgets. The company dominates the US retail landscape and is growing internationally at a fast pace. Wal-Mart, being a market leader, is able to replicate its best practices constantly on an unmatched scale both in the US and across the world. Wal-Mart’s large scale relative to most vendors leads to favorable terms on everything from the products on its shelves to store leases and distribution agreements. Also, Wal-Mart offers a large variety of products. Its dominant position and range of products allows the company to quickly shift the product mix to meet demand and benefit from increased sales. Such flexibility and clout will enable the company to maintain its market position and continue to capture market share from competitors.
Low cost leadership enabling Wal-Mart to offer products at low price points
Wal-Mart is a price leader and its low cost operations are enabling the company to maintain the...
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