INTL-220: Walmart Strategic Analysis Report - Expansion Strategies

This report offers a comprehensive strategic analysis of Walmart, a multinational retail giant. It begins with an introduction and company overview, tracing Walmart's history, global presence, and leadership structure. The core of the analysis is a SWOT analysis, meticulously examining the company's strengths (global size, supply chain efficiency) and weaknesses (thin profit margins, easily copied business model). The report then delves into Walmart's key strategies, including its cost leadership approach, distribution strategies, and social responsibility initiatives. It explores the company's market positioning, competitive landscape, and expansion strategies, highlighting key competitors in various regions. The report concludes with a summary of Walmart's current market position and offers recommendations for future strategic adjustments, particularly regarding profit margins and market penetration.

Running Head: WALMART STRATEGIC ANALYSIS 1
Walmart Strategic Analysis
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Introduction
Company overview
Walmart is a multinational retail company, which operates a chain of discount stores,
grocery, and hypermarket in different parts of the world. The firm headquarter is based in
Bentonville, Arkansas. The company started in 1962 and was founded by Sam Walton; it was
later incorporated in 1969. The company also holds and manages Sam’s Club and Warehouses.
According to management as at 31st January 2019, the company has 11,348 stores and clubs,
which operate in 27 different countries, and they are all under different names (Hitt, Ireland, &
Hoskisson, 2016). In 1972, the company was listed in New York stock exchange. In 1988, it was
mentioned as the most profitable retailer in the United States, and they were leading in terms of
revenue. Walmart is the world largest company in terms of revenue; this is according to the
report by Fortune Global 500 list of the year 2018. The company’s investment beyond north
America gained mixed results, for its operations and stores in South America, United Kingdom
and China they were all successful ventures but unfortunately, in German and South Korea, their
attempts to be in operation were not successful (Yue, Rao, & Ingram, 2013).
Management and leadership
From the company’s history, Walton has always wanted to surround himself with a team
of productive people with great ideas, which can help the company move in the right direction.
The leaders he involved himself with are the ones who are not afraid of venturing into new
market regardless of the challenges and the risks, which would arise. Able and robust leadership
has acted as a significant strength for Walmart for the longest time it has been in serving, these
leaders have been continuously motivating their workers, and inspiring them hence, they can

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achieve great success for their company. Among the executive management of the company the
position of CEO of various branches are Doug McMillon President and CEO of Walmart, Greg
Foran President and CEO, Walmart U.S., Judith McKenna President and CEO, Walmart
International, John Furner President and CEO, Sam’s Club, and Marc Lore President and CEO,
Walmart e-commerce U.S.
SWOT Analysis
This is an environmental analysis, which helps a business to know how it is performing
internally and externally especially how it compares with its competitors. It includes analyzing
the company’s strengths and weaknesses as part of its internal environment. For the external
environment, it analyses the opportunities and threats (Shabanova et al. 2015). Let us have a look
at Walmart’s SWOT analysis and see how the report can help the firm venture into the market
and be able to sustain its position in the face of many able competitors.
Strengths and weaknesses
For the internal environment, we consider the company's strengths and weaknesses, for
Walmart we shall discuss some of the possible advantages and shortcomings and see how they
affect or contribute to their business.
Strengths
Other than good leadership, Walmart has different strengths, which are mainly brought
about by its size, this kind of strengths enable the business to hold on in the market place where
there are many threats, and they overshadow its weaknesses (Shabanova et al. 2015). Some of
these strengths are Global organizational size, being a multinational company; Walmart can
expand in different parts of the world due to the many businesses it holds around the world.
From this strength, the firm can fund its growth and expansion without a struggle. Global supply

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chain this kind of strength enables the company to withstand any form of risks in the market
especially those in the local supply chain and market. High efficiency of the supply chain, the
company has an efficient supply chain since they use technology to control and monitor the
movement of their goods from the supplier to the stores and then to the market (Heller, 2015).
Weaknesses
Thin profit margins this weakness is because Walmart uses a cost leadership strategy;
this is a strategy where a firm sells its goods at a relatively lower cost so that they can gain a
good market share. Walmart uses the approach; hence, their profit margins are thin compared to
those of its competitors. Consequently, this weakness leads to another one, which is easily
copied the business model, since they use this model, other companies and an individual can
replicate their model hence they do not have anything unique about their business model
(McMillan, 2012). Another weakness is that the company only competitive advantage is its size
and the lower prices nothing more. The firm fails to recognize that there are potential customers
out there who are not sensitive to the costs so they can also purchase expensive products in the
market this is a challenge since their competitor can get such customers.
Strategy
Among its many strategies for market penetration Walmart mostly uses the cost
leadership strategy, which helps them have a more significant market share. Another approach
used by Walmart is the distribution strategy; this strategy helps them have a considerable market
share in different countries; it gives the advantage of global organizational size; hence, their risks
are diversified. Participating in social responsibility activities as a way of giving back to the
community is another excellent strategy where a company can advertise its product and services
while interacting with people in their community (Carden, Courtemanche, & Meiners, 2009).

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This strategy also helps Walmart gain a positive public image because people can see that it is an
excellent company to work with; hence, they are pleased to have it in their community.
The market
Having a large share in the global market is advantageous to Walmart, because their
business is less affected by local conditions such as political. Being a multinational company is
one of the marketing strategies that Walmart uses to diversify its risks. For instance, if sales in
one country went down due to the prevailing economic and political condition, business remains
as usually in other countries. However the large the global market the more significant the
competition in the market because this means that Walmart has more competitors. Walmart
operates both retail and wholesale stores in different countries although they have a good market
share it is evident that in every market place there must be competition (D. P. C.N.P. & AM ET
2015). Some of the competitors in the market include Home Depot, Alibaba, IKEA, Costco,
Lowe’s, and Walgreens among many others.
In North America, Walmart's primary competitors include the Grocery store and
Department stores such as Aldi, Kroger, Target, Kmart, ingles, Shopko, and many others. In
Canada, they face much competition from giant tiger the real Canadian Superstore and Sobeys;
in Mexico, we have Soriana and commercial Mexicana. There are also some other small retailers
who have been able to penetrate the market and become among Walmart's competitors such as
dollar general and family dollar. In 1990, the venture into grocery was set to bring competition
among the renowned supermarkets of that time especially in the United States and Canada
(Deru, 2010).
Conclusion

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Ultimately, from its history, Walmart is a firmly established company globally, and
comparing it with its competitors, it is at a better place to compete with its competitors.
However, if it fails to recheck on its market penetration strategy, which is cost leadership
strategy, they might not be able to increase their profit margin. Although they have high volume
sales, their profit margin is thin because they price their goods very low so that they can have
more customers than their competitor. It is recommendable that they change this strategy
(Shabanova, et al. 2015). However the company is still able to acquire a significant market share
because they take part in social responsibility due to this practice, their product is known; hence,
this is another marketing strategy. Just as any other business Walmart experiences the effects of
adverse economic and political conditions whenever they occur in their country of operation,
their advantage in handling such issues is that they are not based in one country; therefore, they
can remain in the market during such times.

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References
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