Strategic Growth of Walmart: SWOT Analysis and Recommendations

Walmart, one of the most successful retail stores in UK, has made significant progress in its sales and revenue generation over the years. A major elevation was noticed in 2015, accounting for about 12%-15% increase. The company plans to continue making progress on reducing stock lists and investing in productivity through process improvements. Additionally, Walmart aims to develop strategies to remain focused on equalization of risk profile between mature markets like UK and emerging markets like Brazil and China. Through its SWOT analysis, the report highlights that Walmart's strengths lie in its worldwide organizational structure and global demand and supply chain. Its weaknesses include thin net income margins and easily derived business theories. Opportunities for growth exist in emerging markets, while threats come from competition and changing consumer preferences. Overall, this summary aims to provide a concise overview of Walmart's strategies, strengths, and challenges.

Business Strategy

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
M1, M2 AND M3.................................................................................................................................3
Impact of Government regulations, interest rates, inflation and demographics (external factors)
Walmart Organization in UK...........................................................................................................3
Tools such Porters Five Forces to explain how Walmart organisation might respond to these
factors...............................................................................................................................................4
D1 AND M1.........................................................................................................................................4
Critical evaluation of use of the PESTLE framework as a tool of environmental audit.................4
D2 AND M2.........................................................................................................................................5
Information could be derived from Walmart's annual report...........................................................5
Organisational audit. INTERNAL (SWOT) Analysis.....................................................................5
Opportunities for Walmart (External Forces):..............................................................................6
Recommendation to Walmart to respond strategically to current changes in its business
environment.....................................................................................................................................6
CONCLUSION....................................................................................................................................6
REFERENCES.....................................................................................................................................8

INTRODUCTION
Business strategies are a set of certain rules and regulations designed and implemented by
company's senior management level. They are necessary for effective management as it provides
guidelines and specific directions which are needed to achieve organizations goals and objectives.
The policies and rules incorporated are not stable throughout the functioning. They are changed and
modified according to the company's demand and requirements (Basili, Heidrich and Trendowicz,
2014). Different methods for data planning, data analysis and input tools are adopted for better
strategic management in a business organization. It further aids in making proper decisions for
progress of company in an organization.
M1, M2 AND M3
Impact of Government regulations, interest rates, inflation and demographics (external factors)
Walmart Organization in UK
Walmart's outside environment or macro-environment includes components that influence
the company’s growth and development. These factors are best explained through the PESTEL
analysis theory (Shoham and Paun, 2015).
Political factors:
 Political stability attainment
 governmental assistance for economic process political pressure level for higher pay-off
Economic factors:
 Steadiness of leading economic systems
 Continued growth of non-industrial countries Depreciating in unemployment in the UK
Social factors:
 Standard mode of living Ethnic diversity (Zaefarian, Henneberg and Naudé, 2013).
Technological factors:
 Up-liftmen in technological process and machines
 Analytical processing of data
 Increased use of mobile accessories among customers.
Environmental factors:
 Improved business policies Environmental friendly goods
Legal factors:

 Food safety modulations
 Occupation regulations
 Taxation reforms (Godwin, Kalapana and Valli, 2013).
Tools such Porters Five Forces to explain how Walmart organisation might respond to these factors.
Following responds will be shown by Walmart organization by incorporating Porters five
forces.
 Threat of Substitute Product or Services: If Walmart notices threat of substitute to any of
its products in company it will plan to switch cost of their products and will revise new cost
for Walmart (Rothaermel, 2015). Threat of Increased Competition from Rivals: Market conditions will prevent Walmart
from increasing a predominating gross sales and experiencing a flow in revenue system.
This threat is present in all large and small scale industries which is not controlled by other
industries. Threat of increased competition on Walmart can be depicted by measuring the
marketconcentration and level of competition with respect to various industries. Threat of New Entrants: Different barriers are the important components which can resist
entry of new comers. These include acquiring various patents on company's products, large
capital requirements, government policies, and access to proper network in Walmart
organization (Zaefarian, Henneberg and Naudé, 2013). If Walmart lack proper barriers to
resist the entry of new entrants, they can easily enter into market.
 Bargaining Power of Suppliers: The threat of disproportional supplier negotiation power is
typically a trouble for smaller organizations that are entirely dependent on the inputs
supplied by a single seller (Sarbah and Otu-Nyarko, 2014).
 Bargaining Power of Customers: When Walmart and and other companies of UK are
noticed as the dealing customers, they use a significant amount of purchasing power. Many
business organization are dependent on large retail sectors and markets to process there
buying from them
D1 AND M1
Critical evaluation of use of the PESTLE framework as a tool of environmental audit.
 Political factors: Ampofo, 2015, has stated that “Political elements refer to the stability of
the situations and the attitudes of political organization or movements” (Ampofo, 2015).
Similarly Naudé, 2015, has explained that “Political factors regulate the level to which an
authorities may influence the system or a certain industry. For example a government may
enforce revenue enhancement or responsibility due to which gross generating structures of
organizations may change” (Naudé, 2015).

 Economic factors: Shoham and Paun, 2015, declared that “Economic factors of Walmart
corresponds to broad economy so may consider economic growth, steady employment and
unemployment rate, costs of raw materials such as energy, gasoline and steel, interest
ates and monetary system policies, exchange rates and rising prices” (Shoham and Paun,
2015).
 Social factors: Sarbah and Otu-Nyarko, 2014, has said “Socio-cultural symbolize the
culture of the society that a Walmart operates within” (Sarbah and Otu-Nyarko, 2014).
Similarly Santos and Laczniak, 2015, has stated that “This considers sociology, age
statistical distribution, increased population level, standards of education, distribution of
finance and ethnic classes, living conditions and lifestyle” (Santos and Laczniak,
2015).
 Technological factors: Koca-Helvaci, 2015, has stated that “Technical factors infers to the
rate of new innovations and improvement, modifications in information and mobile
technology, changes in internet and e-commercialism or even mobile commerce, and
government's expenditure on research” (Koca-Helvaci, 2015).
 Environmental factors: Sum, 2013, has explained that “These factors include all those that
possibilities that determine the surrounding environment of Walmart organization in UK.”
(Sum, 2013).
 Legal factors: Ampofo, 2015, has proposed that “Legal factors are specific laws and
amendments that create an impact on environment of Walmart in UK” (Ampofo, 2015).
D2 AND M2
Information could be derived from Walmart's annual report
According to the research carried out on Walmart organisation, UK it was noticed that
growth rate was enhanced by increase in sales from $120 billion in 2014 to $200 billion in 2015
(Naudé, 2015). Further Walmart aims at expanding its growth and sales by planning various
expansion programs. A major elevation in sales and revenue generation was also noticed in the year
2015 which accounted for about 12%- 15% (Naudé, 2015). Current domestic and foreign income
tax increase was also marked in the f following year with 24.66 billion in 2014 to 25 billion in 2015
(Shoham and Paun, 2015). Walmart plans to continue making progress on reducing stock list and
investing in productivity through process improvements. It plans to develop strategies to remain
focus on equalisation of risk profile between mature Walmart retail market in U.K. and emerging
markets like Brazil and China.
Organisational audit. INTERNAL (SWOT) Analysis
Walmart’s Strengths (Internal Forces):
 Worldwide organisational structure.

 Global demand and supply chain (Santos and Laczniak, 2015).
Walmart’s Weaknesses (Internal Forces):
 Thin net income margins Easily derived business theory
Opportunities for Walmart (External Forces):
 Enlargement in underdeveloped countries
 Betterment in human resource practices (Sarbah and Otu-Nyarko, 2014). Improvement in prime standards.
Threats Facing Walmart (External Forces):
 Self-assertive competition
 Healthy lifestyle trend
Recommendation to Walmart to respond strategically to current changes in its business
environment.
 This SWOT analysis depicts that Walmart should prioritize using its capabilities to
accomplish opportunities in the global retail market.
 The company’s weaknesses and threats should be secondary priorities. Walmart can amend
its HR management standards and product quality standards to improve organization
performance (Santos and Laczniak, 2015).
 A change in scheme by Walmart to expend more in its workers could not only improve the
company’s long-term gross income but could also enhance the UK economic system by
increasing the purchasing power of millions of workers at Walmart and other retail and
grocery chains.
 Also, the company needs to continue enlarge its business to exploit economic possibilities in
developing markets.
 Walmart’s strengths based on its worldwide organizational size, global supply chain, and
high ratio of the supply chain can assist in aggressive global expansion in the international
markets (Shoham and Paun, 2015).
 If Walmart initiates paying better and reduces under staffing, it will create upward
pressure on wages in retail and other service sector jobs and provide the boost to
consumer demand our economy needs (Salvá, Marshall and Bishop, 2013)
CONCLUSION
Business strategy plays a essential and significant role in growth and development of
business which includes the planning for both short term and long term business. These plans are
mainly concerned with the different activities of business like gross sales and product development.

They helps to develop the winning edge for the organization. This report describes the necessity of
business schemes in business and also describes its results on development and growth of the
company. As per the above study, Walmart has developed both positive impact on international
market and its customers. The planned business strategy for company represents that organization
has advanced measure for development and business expansion.
As per the research done above, Walmart is one of the most major and successful retail
stores in UK. It always try to develop innovative and creative for its buyers and members. It
considers in providing in better quality service. Utilization of current strategy along with latest
technologies is the key to success. The commitment towards work and passion for achieving goals
and objectives made it a huge and popular organisation. It thinks about satisfying customers.
Customers are foremost and last priority of this organization.

REFERENCES
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