Analyzing Wal-Mart's Market Monopoly and SWOT Analysis

This report analyzes Wal-Mart's market monopoly and performance through SWOT analysis. It also provides recommendations for the management to improve the firm's social responsibility and employee welfare.

Running head: MANAGERIAL ECONOMICS
Managerial economics
Name of the student:
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Table of Contents
Introduction:...............................................................................................................................2
Problem statement:.....................................................................................................................2
SWOT analysis:.........................................................................................................................3
Solution of the problem:.............................................................................................................6
Recommendation for the management:.....................................................................................6
Conclusion:................................................................................................................................7
Reference:..................................................................................................................................8

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Introduction:
Retail chain is one of the growing business sector around the world that has been
facing large amount of growth prospect since the last few decades. With the wake of the
brands like Wal-Mart stores, Target, Marks & Spencer, Sears Holdings and others, retail
industry has changed by a large amount where the market has become a perfect competition
to oligopoly and it has affected the consumption and expenditure habit of the end users too
(Reich, 2016). Among these market player, Wal-Mart stores being the largest one has often
argued to be monopolising the retails market and it is one of the main debate among the
researchers who deal with the retail chain industry. Under this scenario, this report is aimed
to trace the validity of the proposition that whether Wal-Mart stores is monopolising the
market or not. And in addition to this, this report is aimed to analyse the performance of the
Wal-Mart stores through the tool like SWOT analysis and doing so, it will provide
recommendation for the management of the Wal-Mart stores in order to gauge the situation.
Problem statement:
Considering the growth and the revenue figure, since last decade there has been great
amount of debate regarding the fact whether Wal-Mart can be recognised as a monopoly firm
or not. some people argue that, with the great amount of revenue and the largest market share,
Wal-Mart is the biggest retail chain service provider, where firms like Target, Marks &
Spencer, Sears Holdings and others are mere tiny. In addition to this, numbers of stores and
the global presence of the Wal-Mart makes it the largest retail chain (Haimson, 2015).
Contrary to this, there are many people who argue that, Wal-Mart largest amount of revenue
due to their illegal activities and exploitation of the labour. Though it has largest market
share, profit margin is less than others making it one of the oligopoly operator.

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SWOT analysis:
SWOT analysis is one of the simple yet crucial tool to determine the strength,
weakness, opportunity and threat of the Wal-Mart (Martinez et al., 2017). it aids the
managers to examine where the firm excels and where it need focus in order to gain further
growth. Details of the SWOT analysis of Wal-Mart is as follows:
Strength Weakness
 Wal-Mart is known for its wide
variety of goods and services and it
has aided to become where it is now.
 The brand name Wal-Mart has good
amount of popularity and it is
recognised all around the world that
makes it such a retail store on which
one can bank upon closing their
eyes.
 Advanced information system and
real time inventory sharing
mechanism aids the Wal-Mart to
keep their stock up to the mark and
it helps the firm to earn higher
amount of revenue (Ahmadi et al.,
2016).
 Large scale of operation, global
presence and stores almost in all
cities helps Wal-Mart to attain
 There are numerous amount of
lawsuits against the Wal-Mart that
hampers the popularity of the brand
(Park et al., 2015).
 It is often argued that Wal-Mart does
not provide fair share of revenue and
profit to their workers as well as
they exploit the workers in terms of
salary and additional benefits.
 Wal-Mart lacks in case of the frills
experience and ambience of the
shops are not enjoyable at all.
 Products sold are not guaranteed in
terms of freshness.
 Employee turnover ratio of Wal-
Mart is much higher than the other
retail firms and it largely lacks the
social responsibility that reflects on
the image of the firm (Malesky et

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economies of scale.
 Versatility in the product range and
services makes it different from
other
 Wal-Mart is not only limited to the
US market, rather it has wide array
of customers all around the world
that guides it to become one of the
best retail brand in the world.
 Large amount of private
employment aids the firm to become
a market giant and gain from the
same in case of revenue generation
(Boyd, 2017).
al., 2015).
 Wages are unequal and the
employee growth is not guaranteed
here. In addition to this, Wal-Mart
does not provide medical service as
well as the necessary medical benefit
for long term to their workers that
makes it one of the worst brand in its
sector (Schuetz, 2015).
 Wal-Mart enjoys large amount
revenue through providing lower
wage to their workers and
management structure is
incompetent in terms of workers
benefit that makes it a bad place to
work.
Opportunity Threat
 Wal-Mart has great hold in the
western market that helps it to enjoy
economies of scale in those
countries. under this situation, Wal-
Mart can introduce more amount of
western goods to the developing
countries in order to enhance its
sales and revenue figures
 Growth of the rival firms is one of
the main threat to the Wal-Mart. as
the rival organisation grows in size,
market share as well as in the
revenue figures, it will reduce the
number of customers for the Wal-
Mart leading to fall in the revenue of
the same.

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 Having own cafeteria or food court
at the shopping centres of the Wal-
Mart along with amusement for the
children would have entice the sale
figures of the Wal-Mart (Munoz,
2018).
 Rather than buying the products, if
the firm grows the same, then it
would have been better for the firm
to generate higher amount of
revenue.
 The firm need to bring in parity
among the workers’ wage so as to
retain more amount of workers and
enhance their productivity and
morale.
 Wal-Mart need to differentiate its
shops in terms of products they are
selling. For instance, there should be
different store for grocery and
different store for other goods and
services in order to attract more
amount of prospect buyers.
 During recession Wal-Mart lacks in
case of revenue generation.
Aggregate demand of the economy
falls and the firm faces scope of
having loss on their balance sheet.
 Rise in the social threat from the
local communities for the Wal-Mart
can be provided to be hazardous.
Hampering of the local business
under the influence of the Wal-Mart
hasn’t gone well in several section of
the global economy that has forced
the Wal-Mart to step back (Woodall
& Shannon, 2018).
 Growing environmental concern all
around the globe is another main
issue that the firm need to take care
of carefully, otherwise its existence
will be in dilemma. Wal-Mart has
bad reputation in case of the social
responsibility, thus it is essential for
the firm to focus on the same.

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Solution of the problem:
One of the main issue that has been found analysing the given article is that the Wal-
Mart lacks in the case of welfare of the employees by a large extent and the firm exploits its
labour force in terms of wages. Under this scenario, it has become essential for the firm to
look into the matter and pay the workers their rightful salary. When it comes to the social
responsibility of the firm, there are large number of law suits that the Wal-Mart faces. It need
to solve them out and the firm have to operate under the societal norms so as to make it
acceptable by a large amount of population of the society (Dunn, 2017). Influenced by the
western goods and services, Wal-Mart must not hamper the culture of the eastern or the
developing nations, otherwise, it will lead the firm towards destruction and its presence will
only be limited to the western countries. The firm need to develop health scheme for the
workers as well as their dependants so as to provide the workers a good place to work, where
they get paid as much as they work and sustain good health with ease.
Recommendation for the management:
Wal-Mart has serious issues with its management and the hierarchical structure of the
management provides least amount of flexibility to the workers in the lower section.
Employee in the management used to get higher amount of wage, whereas, the less than
minimum wage is paid to the workers in the field that makes it a bad place to work.
Moreover, lack of the health amenities and amusement makes it a boredom to work and
sustain better health. Under this situation, Wal-Mart needs to bring in better health
management program and introduce liberalised wage scheme so as to reduce the income
disparity among the workers (Joseph, 2015). In addition to this, lower level workers need to
be provided better amount of amusement and amenities as well as incentive to work hard,
work more than targeted amount. It will not only help the firm to become one of the best

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retail organisation for shopping rather, it would help the firm to turn itself as one of the best
place to work.
Conclusion:
Above discussion has showcase that, there is high scope for the Wal-Mart to become
the best place to work. Apart from gaining monopoly in the retail market, it holds the title of
largest employer. At present rate of retention it would have lost the tag, however, if the firm
focus on the highlighted section, then the firm can become a success story itself soon again.

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dissertation, Department of Business University at Albany, State University Of New
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