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Situational Analysis of Walmart Assignment PDF

   

Added on  2021-05-12

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Situational Analysis of Walmart Situational analysis is a collection of methods used by managers to analyze a company’s internal and external processes to understand its consumers, capabilities and business atmosphere. Walmart, the largest company in the world in terms of generating revenue, is an American grocery store and retail department. The company has largest number of private employees in the world i.e. 2.2 million. This company was founded by Sam Walton in Rogers, Arkansas, in 1962. They deal in Electronics, home improvement, clothing, home and furniture, footwear, jewelry, toys, garden supplies, sporting goods and fitness, photo finishing, grocery and craft and party supplies. Till January 31st, 2021, Walmart has 11443 stores and clubs in 26 countries, operating under 54 different names (Walmart Investor Relations - Investors - Financial Information - Unit Counts & Square Footage, 2021). The situational analysis of Walmart can be understood by the help of swot analysis and pestle analysis of this company.Swot analysis of Walmart Swot analysis of a company tells about the company’s competitive position in the market by assessing itsstrengths, weaknesses, opportunities and threats (GRANT, 2021). The swot analysis of Walmart tells us about the company’s leading place in retail industry worldwide based on the implementation of the organization’s strengths and competitive advantages. The business advantages are used in the nullifying the impacts of other competing retailers like Google, Amazon and Apple. Strengths The strengths of Walmart depends on the size of their business. These strengths make this company to endure threats despite weaknesses being a low cost retailer. For utilizing global growth opportunities, strengths of Walmart are as follows,1.Global supply chain 2.Global organization size3.High efficiency of supply chainGlobal supply chain make sure business flexibility from risks of the market like disturbance in supply chain at local level. The global organization size of the company opens path for fund growth and evolution of the company. Supply chain of company has high efficiency because of modern technologies of supervising the movement of goods from suppliers to the consumers. In Swot analysis like this, organizational strengths provide comparative advantages against medium scale retailers (SMITHSON, 2021).WeaknessesWeaknesses that always dare the company to hold up against threats are also analyzed in the swot analysis. The weaknesses of the company are related to the inclusive strategy and its implementation in development of business, resources, capabilities and profit margins. Weaknesses of the company are as follows 1.Thin profit margins 2.Easily copied business model3.Competitive disadvantage against high end specialty sellers

The companies that uses cost leadership strategy have thin profit margins. Walmart has minimize their prices. For this reason they have to minimize profit margins and depend more on sales volume. Walmart’s business model is easy to copy just because of the cost leadership strategy. The company does not have notable competitive differentiators, excluding their size of business and prices. Moreover,the high end specialty sellers have more control on attracting quality product seekers who have minimum to no issues with the price. Thus, these weaknesses manifest business destructibility to the new competitors and disturbance in the industry environment as well, more importantly in the presenceof e-commerce giants like Amazon (SMITHSON, 2021). OpportunitiesWalmart’s opportunities include expansion and improvement in business practices and these are highly connected to the international economic situation. If the human resources in the firm bring forth some issues they are also considered as opportunities to work on and improve. Opportunities of the company are as follows1.Expansion in the developing countries2.Improvement in human resource applications to keep up competitiveness in the market3.Upgradation in the quality standardsDepending upon their rapidly growing economic margins, Walmart has this opportunity to expand their business in developing countries. The opportunities in the human resource department are related to the employees’ productivity and behaviour. Improving their conduct will make the company able to attract more workers from the market in comparison to other companies. At last the quality standards are related to the customer satisfaction on what they have thought of the product and were told about it and what actually the product was. Minimum the difference is, maximum the quality will be. The swot analysis of the opportunities addresses some drawbacks of the company and present the ways to get ridof them (SMITHSON, 2021).Threats The threats of the company are directly related to the market conditions and the view of the customer about the product they get. These two points impel the firm to have some competitive changes in the strategy. In the wake of swot analysis the threats to the company are1.Health related issues2.Increasing competition3.Online retailers of manifold masses.The healthful products has become a threat and an opportunity for the company. It is now a threat as most of the products are not perceived as good for health, unnatural and non-organic. Now it is also an opportunity for the company to improve its quality standards. But as per current conditions this is mere a threat for the company as there is no check and balance on quality as required by this retailer giant. Increasing competition is another threat for the company because other companies can use aggressive competitive techniques to attract more customers comparative to Walmart. Another threat is the presence of online retailers who have the capacity to bypass the company’s presence by using their ownwebsites to sell products to the customers online. This part of swot analysis shows that the large

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