BISM 450 - SWOT Analysis of Walmart's E-Commerce Strategy

This report provides a SWOT analysis of Walmart Inc.'s e-business strategy, examining its strengths, weaknesses, opportunities, and threats in the e-commerce landscape. The analysis highlights Walmart's omnichannel initiatives, online sales growth, and investment in online grocery pickup as strengths. Weaknesses include a less tech-savvy customer base compared to competitors like Amazon and limited product variety. Opportunities lie in capitalizing on holiday season sales and filling the market gap left by the closure of Toys R Us. Threats include intense competition from Amazon and local e-commerce players, as well as potential margin reduction due to heavy discounting. The report concludes that continuous innovation and adaptation to technological changes are crucial for Walmart to maintain its competitive edge in the e-commerce sector. Desklib provides access to similar solved assignments and past papers for students.

24 November 2018
E-Business, E-Commerce
Walmart Inc.
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SWOT ANALYSIS WALMART INC.
Contents
Introduction................................................................................................................................2
SWOT Analysis.........................................................................................................................2
Strengths.................................................................................................................................2
Weaknesses............................................................................................................................3
Opportunities..........................................................................................................................3
Threats....................................................................................................................................3
Conclusion..................................................................................................................................3
Bibliography...............................................................................................................................5
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SWOT ANALYSIS WALMART INC.
Introduction
The inclusion of the information and technology in business practices has changed the overall
operations of the economy from traditional to digital. The company Walmart Inc. is a leading
global retailer whose headquarter is based at the United States. The business of the entity is
widely distributed with operations based at the 27 countries, and including the 11,200 stores.
In addition, there is a well-established e-commerce website network in 10 countries1. The E-
business strategy of an enterprise refers to the organizational performance by the inclusion of
the information and the emerging technologies. The following work explores the various
facets of the e-commerce strategies of the entity Walmart. The report will examine the
strengths and the weaknesses of the said entity, in addition to the opportunities and the threats
in the industry of operation of the entity, in the light of the e-business environment.
SWOT Analysis
The management technique of SWOT analysis deals with the internal resources, weaknesses
and the responses to the same. Thus, the analysis aids the management in the policy
formulations with respect to the financial sector, marketing strategies, human resource
structure and more. The SWOT analysis of the entity Walmart in light of the e-business
operations is presented as follows.
Strengths
 One of the significant assets of the entity in terms of the e-commerce business
practices is the introduction of the "Omnichannel stores." The entity opened its first
Omni channel store in Mexico2. The store is loaded with features like drive-thru
facility, free Wi-Fi internet, digital catalogues, and the self-checking out facility as
1 Walmart, About Us (2018) <https://corporate.walmart.com/our-story>.
2 Mexico News Daily, Walmart Has Brought Its Omnichannel Store Concept To Mexico (28 November 2018)
<https://mexiconewsdaily.com/news/walmart-opens-its-first-omnichannel-store/>.
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SWOT ANALYSIS WALMART INC.
well. The same has been introduced to improve the customer experience, as well as
challenging global competitors like Amazon.
 Recently, as reported by the company, the online sales of the entity in the United
States rose to about 40 percent in the second quarter3.
 In addition, the company has also invested in the online grocery pickup business. This
would be a new product to the existing e-business products and therefore a strength.
 The fact that the revenues of Walmart are around three times more than that of the
biggest e-commerce competitor Amazon proves to be its biggest strength4. This way
the entity can control suppliers to an extent by quoting them the higher and better
prices as compared to the local as well as the global competitors. As a result, the
overall supply chain can be benefitted as well.
Weaknesses
 One of the major weaknesses of the entity Walmart in terms of the e-commerce
operations is that the demographics of the customers is such that the customers are not
that tech savvy as in case of the Amazon customers5. For instance, one of the chief
products of the Amazon is the Amazon Prime, while the Walmart is majorly known
for its brick and mortar retailing. As a result, the competitors like Amazon enjoy the
tech-savvy base of customers, which aids them in other products as well.
 Another major weakness for the entity in the e-business operations is that there is a
lack of variety in terms of the products offered, in terms of both the numbers and the
3 Mamta Badkar, Walmart US Sales Rise At Fastest Clip In More Than 10 Years | Financial Times (2018)
Ft.com <https://www.ft.com/content/244e17f2-a0b7-11e8-85da-eeb7a9ce36e4>.
4 Brian Deagon, Amazon Vs. Walmart: Locking Horns In A Battle For Retail's Future ( 27 February 2018)
Investor’s Business Daily < https://www.investors.com/news/technology/walmart-vs-amazon-retail-stores-e-
commerce/>.
5 Jon Dages, Mei Li, and Chris Moore, Walmart vs. Amazon (2016) The Economist <
https://www.economist.com/sites/default/files/ballstate_ws.pdf>.
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SWOT ANALYSIS WALMART INC.
quality. The entity offers only about the 55 percent of the bestselling products of that
of the Amazon6. However, the management regards the same at its topmost priority.
Opportunities
 The most recent opportunity in terms of the e-commerce business is the upcoming
holiday seasons, and thereby an opportunity to increase the sales as well. The
company has very well responded to the same by the recent business strategy of the
company in terms of the introduction of the "Black Friday Sale 2018." The online
sales like such are an essential part of the entity's e-commerce strategy. The existing
network of the websites and resources are being combined with the few newly created
app-based store maps7.
 One of the major opportunities that can be explored by the Walmart in the upcoming
month of the holiday season is the wide gap in the sales of toys because of the
shutting of the toy stores by the well-known retailer Toys R Us. The said retailer had
about 15 to 20 percent market share in the toys sector, which accounted for about 800
stores in the region of America itself8. This gives a major opportunity to the entity
Walmart to enter into the line, with the existing advantage of brand name and benefits
of economies.
6 Dennis Green, Walmart still has a big weakness in its battle against Amazon (29 October 2018) Business
Insider < https://www.businessinsider.in/Walmart-still-has-a-big-weakness-in-its-battle-against-Amazon/
articleshow/66419497.cms>.
7 Investor's Business Daily, Black Friday: How Target, Walmart, Amazon Deals And Shipping Match Up (23
November 2018) <https://www.investors.com/news/black-friday-sales-target-walmart-amazon/>.
8 Darren Geeter, Here's what it's like to shop at Toys R Us for the last time ( 29 June 2018) CNBC <
https://www.cnbc.com/2018/06/29/toys-r-us-closing-sales-stores-retail-toys.html>.
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SWOT ANALYSIS WALMART INC.
Threats
 The major threat to the e-commerce business operations business of the company is in
the form of tough competition posed by the online business giant Amazon, which is
the owner of approximately half the e-commerce market9.
 The upcoming threat for the company in terms of the industry changes is that the
upcoming holiday season might reduce the margin of the entity. This can take place in
the event of sustaining competition against the online giants like Amazon, and thereby
offering of whooping discounts10. In addition, to consistently maintain the existing
capabilities, the entity is also needed to maintain the investments in the e-commerce
components that could reduce the margins even further.
 Another threat for the entity's e-commerce business is in the form of the competition
posed by the local websites and the players like AliExpress in China, Bol.com in the
Netherlands, and many more11.
Thus, the SWOT Analysis as conducted above depicts that the investment in the e-commerce
sector has proved to be a beneficial business strategy in terms of the existing market
conditions as identified.
Conclusion
As per the discussions conducted in the previous parts, it can be stated that the e-commerce
strategies play an important role in the success of the entity. These must be combined with
the overall business strategies, as depicted from the case study of the company Walmart Inc.
9 Carlo Versano, It's Time To Accept That Walmart Is An E-Commerce Company (15 November 2018) Cheddar
<https://cheddar.com/videos/its-time-to-accept-that-walmart-is-an-ecommerce-company>.
10 Kevin Curran, Industry, Macro Pressures Could Squeeze Walmart's Margins Into Holidays (15 November
2018) RealMoney <https://realmoney.thestreet.com/investing/stocks/industry-macro-pressures-could-squeeze-
walmart-s-margins-into-holidays-14783497>.
11 Lisa Lacy, Local Ecommerce Players Around the World Are Giving Amazon and Walmart a Run for Their
Money ( 21 October 2018) AdWeek <https://www.adweek.com/digital/overseas-local-ecommerce-players-are-
giving-amazon-and-walmart-a-run-for-their-money/>.
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SWOT ANALYSIS WALMART INC.
above. The company made investments in the various components of the information and
technology to boost up its revenue and the customer base. The entity combined its e-
commerce efforts with the business strategies of growth and expansion in terms of region and
new product lines as well. The efforts have proven to be positive for the company over the
years. However, a few weaknesses and threat exist in the form of industry changes and
competitors to the company Walmart as well. The strategy to get past the same can be stated
to be continuous innovation and adapting to the technological upgrades and changes.
Accordingly, it would be right to state that global business enterprises cannot function
without a strong framework of information, technology, and connectivity.
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SWOT ANALYSIS WALMART INC.
Bibliography
Websites and Articles
Badkar, Mamta, Walmart US Sales Rise At Fastest Clip In More Than 10 Years | Financial
Times (2018) Ft.com <https://www.ft.com/content/244e17f2-a0b7-11e8-85da-
eeb7a9ce36e4>
Brian Deagon, Amazon vs. Walmart: Locking Horns In A Battle For Retail's Future (2018)
Investor’s Business Daily <https://www.investors.com/news/technology/walmart-vs-amazon-
retail-stores-e-commerce/>
Carlo Versano, It's Time To Accept That Walmart Is An E-Commerce Company (2018)
Cheddar <https://cheddar.com/videos/its-time-to-accept-that-walmart-is-an-ecommerce-
company>.
Curran, Kevin, Industry, Macro Pressures Could Squeeze Walmart's Margins Into
Holidays (2018) RealMoney <https://realmoney.thestreet.com/investing/stocks/industry-
macro-pressures-could-squeeze-walmart-s-margins-into-holidays-14783497>
Darren, Geeter, Here's what it's like to shop at Toys R Us for the last time (2018) CNBC <
https://www.cnbc.com/2018/06/29/toys-r-us-closing-sales-stores-retail-toys.html>
Investor's Business Daily, Black Friday: How Target, Walmart, Amazon Deals And Shipping
Match Up (2018) <https://www.investors.com/news/black-friday-sales-target-walmart-
amazon/>
Jon Dages, Mei Li, and Chris Moore, Walmart vs. Amazon (2016) The Economist <
https://www.economist.com/sites/default/files/ballstate_ws.pdf>
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SWOT ANALYSIS WALMART INC.
Lisa Lacy, Local Ecommerce Players Around the World Are Giving Amazon and Walmart a
Run for Their Money (2018) AdWeek <https://www.adweek.com/digital/overseas-local-
ecommerce-players-are-giving-amazon-and-walmart-a-run-for-their-money/>.
Mexico News Daily, Walmart Has Brought Its Omnichannel Store Concept To
Mexico (2018) <https://mexiconewsdaily.com/news/walmart-opens-its-first-omnichannel-
store/>
Walmart, About Us (2018) <https://corporate.walmart.com/our-story>
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