Wal-Mart: SWOT Analysis 2013 Presentation

Introduction

Wal-Mart Stores, Inc. is an American public corporation that runs a chain of large, discount department stores Founded by Sam Walton in 1962.

Wal-Mart SWOT analysis 2013

Weakness

• Globalization;
• Dependence on suppliers;
• Unable to adapt to different countries;
• Strict Labor Laws;
• Effectively/Timely respond to customer trends (Customer relationship);
• Product Recall.

Strength

• Powerful retail brand;
• Logistics System (Resources);
• Service innovation and technology;
• Infrastructure;
• Efficient supply chain management;
• Strong market position.

Threats

• Failure to maintain security of information;
• Intense competition;
• Opposition and resistance from communities;
• Employee increases- Exposure to increase wages and high health care costs;
• Increasing competition from online competitors;
• Risk in commodity prices (Raw Materials).

Opportunities

• Unemployment;
• Increase store network;
• Increase online sales/ Online growth;
• Retail market growth in emerging markets;
• Rising acceptance on own label products;
• Opportunities to expand internationally.

Strategic Alternatives

From our strength of a strong market position we plan to use this to generate an increase in online sales by adapting new online technologies. The steps include:

• Better services for online help about questions or concerns;
• Improved ease of use to browse products and services;
• Encourage repeat visits from our marketing of social networking and email.

To improve from our weakness as a dependent company of many suppliers. The raising acceptance of our own label products allows an opportunity to achieve higher goals of advertisements. Opportunities include:

• More control over pricing strategies;
• More free will for retailers to create marketing plans and to control inventory;
• Private branding allows a custom-made and unique image, which leads to customer relationships and loyalty.

To improve our weakness of globalization, taking the opportunity to expand our company worldwide would lead to a higher rate of profits as well as international markets and recognition. Steps to expand in Italy include:

• External Analysis;
• Porter’s Five Forces Model;
• Scope of the Macro-Environment;
• Type of Culture;
• Responding to the Environment.

Strategic goal and plans

The strategic goal would be to seek for the company’s growth through a foreign market entry in order to stand strong against the force of globalization”. Below are the strategic plans:

• Conduct a market analysis.
• Study the macro and micro-environmental forces.
• Search for alternative entry strategies.
• Select the strategy that incorporates both internal and external factors.

Operational plan

The functional departments of Wal-Mart that are most needed to facilitate the strategy are, marketing, human resource, IT, research and development, manufacturing operation and accounting. The acquisition has been selected as the most appropriate entry strategy:

• The task of the marketing department is to use the results of market analysis to formulate the best marketing mix. The reason for this is to enhance the competitiveness of the organization.
• The main significance of the task is to develop a healthy relationship between the organization and the target customers.
• A fair price for customers and suppliers is a key to the foundation of building loyalty. Loyal customers would like to make purchases from their preferred stores. Creation of a good customer relationship is one of the ways of attracting and retaining customers. Wal-Mart would gain a core competence by creating a strong customer-organization relationship. The core competency would turn into high profitability levels in the long-run.
• The tasks of human resource department would be to hire qualified workforce. This would ensure that Wal-Mart’s employees are qualified in terms of expertise and experience. A qualified workforce would be another source of core competency.
• The task of the IT department would be to install security and data processing systems that are compatible with the organization’s internal processes.
• The accounting department would assist with approximating the required amount of money and other assets, to enhance the implementation of the chosen entry strategy.
• Creation of a distinctive competency is the chief reason for the task. Core competency would guarantee Wal-Mart a high market growth and a long-term profitability.
• The department of Research and development would be involved in gathering information from customers and conducting product tests in order to improve the products, deliver quality and develop a platform for sustainable competition.
• The manufacturing operation department would be involved in product differentiation. Development of a variety of products offers customers the opportunity to consume according to their preference. Therefore, product differentiation increases sales levels.

Time frame and control measures

• The targeted period for the full implementation of the plan is three months.
• The control measures needed to evaluate the implementation progress are the customer perspective, the internal perspective, the growth and learning perspective and financial perspective (The balanced scorecard).
• The customer perspective is intended at attracting and retaining customers. The organization’s processes of achieving this should be measured against the actual result. Adjustments should be made where necessary.

Control measures

Growth and learning is a perspective that is concerned with providing a friendly working environment and ensuring that the activities necessary to facilitate the process of employee learning are developed and implemented. Such activities would include employee training. Training activities would increase the employee performance levels thus ensure constant quality delivery to the customers. The company should establish a performance standard for measuring the employee performance. The process would help to identify the candidates for further training. That would create a control measure for an employee performance.

Financial perspective comprises financial ratios to be achieved. The targeted ratios should be compared against the actual to ascertain any deviation. Deviations should be responded to through the implementation of a corrective plan.

Internal perspective is concerned with the operational processes of an organization. The organization seeks to enter into a foreign market and establish a strong customer base through a quick market penetration. Internal processes like formulation of a good product promotion should help achieve the company’s objectives. The result of Wal-Mart’s internal operation system should be compared with the goals. Corrective measures should be implemented where necessary.