Introduction
Walmart is an American multinational retail corporation that owns and operates numerous supermarkets and retail stores. Its stock symbol is WMT, and its market capitalization as of 2021 is $400 billion (Chang and Hu 22). It was created in 1962 by Sam Walton and was headquartered in Bentonville, Arkansas. After quickly expanding in recent years, it operates under the brand name Sam’s Club as a wholesale competitor to Walmart stores. This essay will entail Walmart’s (SWOT) analysis; describe its environment, organizational culture, competitors, and how it deals with ethics.
Walmart had swiftly expanded to over 1,000 locations nationally by the time it celebrated its 25th anniversary in the 1980s. Its quick growth can be ascribed to Sam Walton’s notion of traveling to rural places and establishing low-cost retail outlets. Walmart is the world’s largest firm, with $550 billion in annual revenues, according to a Fortune 500 list dated January 2021 (Guo et al. 138). As the largest grocery retailer in the United States, it derives 65% of its total revenue from domestic operations. Furthermore, the Walton family owns more than 50% of the firm through Walton Enterprises, making it a publicly listed, family-owned enterprise.
Walmart began expanding internationally in 1991, and the business continued to grow after Walton’s death. It significantly stayed ahead of the competition as it grew due to its regular low-pricing business model, which sets affordable prices for its products daily rather than just occasionally. Additionally, Walmart’s enormous inventory made it possible for customers to purchase everything they needed for their homes in a single location. In the 1980s, 1990s, and 2000s, the firm also encouraged suburban development (McGee 3). Finally, its dominant position was aided by its ability to interact with supplier chains.
SWOT Analysis
The company’s resources, capabilities, and operational environment are considered in the SWOT analysis to highlight the strategies employed in creating a specific business model. It considers both the positive and negative factors that affect the company’s internal and external success. Any organization’s decision-making process benefits from the study’s assistance in anticipating or predicting evolving patterns.
The principal purpose of a SWOT analysis is to raise awareness of the factors that influence corporate decisions or business policy development. Businesses frequently employ SWOT analysis, but it is also commonly used by nonprofit agencies and, to a lesser extent, by individuals for self-evaluation. (McGee3). The SWOT analysis can also be applied to projects, goods, and activities. CIOs, for instance, may conduct a competitive analysis or utilize a SWOT analysis to establish a framework for strategic business planning.
Strengths
Walmart is the world’s best-recognized retail brand, with millions of customers shopping there so often. Walmart’s e-commerce marketplace offers around 60 million products. With an estimated $500 billion in sales for fiscal year 2020, it is the largest public company in the world.
According to reports, Walmart bought Flipkart, an Indian e-commerce giant, and ASDA, a retailer with a UK address (Mohammad 312). Additionally, it has partnered with Bharti, India’s largest retailer. The business’s international activities are a testament to its remarkable success.
Walmart International, Sam’s Club, and Walmart operate around 11,000 stores and clubs across 27 countries. US. Walmart’s international stores, which operate under 56 different names, have contributed to the company’s global presence and income expansion (Morgan 7). Walmart’s marketing approach is founded on economies of scale, which allows it to provide such low costs. As a result, tens of thousands of things have pricing determined by it. As a result, it is one of the least costly shopping destinations on the planet.
Walmart’s primary competency is shipping and logistics solutions, and it effectively monitors the performance of each commodity for each nation’s store using information systems. The staff is Walmart’s significant asset. It spends a lot of time and money managing and training its employees.
A little more than 1% of Americans work at Walmart. Data systems, distribution facilities, supply chain networks, knowledge, and other abilities are all within Walmart’s control. Data systems, distribution hubs, supply chain networks, expertise, and other skills are all well-managed assets for the company.
Due to its broad organizational structure and global reach, Walmart has significant market influence over suppliers and partners. The first and second quarters of 2020 saw Walmart’s sales hit an all-time high (Wang et al. 152).
Although in-store sales accounted for most of the company’s income, previous incidents reduced in-store foot traffic. These incidents prompted Walmart to enhance its e-commerce capabilities, leading to a significant increase in online sales. Strong in-store and online sales help Walmart set new records for its overall sales.
Weaknesses
The employees of Walmart have been the focus of several criticisms and legal disputes. The public is aware of several issues, including low pay, inadequate healthcare, and poor working conditions (Zhang et al. 146). Walmart’s enormous size and broad influence may expose it in certain areas.
The company’s profit margins are thus very tight. A complaint was made against Walmart in 2007, alleging discrimination against women regarding job opportunities. In this instance, female employees are discriminated against regarding pay raises.
The corporation has no clear advantage over its rivals, except for its enormous size. However, the most recent demonstrations against institutional racism have prompted companies to reassess their tactics (Zhang et al. 146). In June 2020, a dispute arose over Walmart’s decision to display white hair care products behind glass, while maintaining ethnic hair care products on the shelves.
As a result, Walmart was forced to abandon its discriminatory policy. Walmart is already facing legal action due to its disregard for safety protocols during a recent health scare that claimed the lives of two employees. There are around 11,000 Walmart locations globally, including 4,700 in the US. Compared to the $340 billion US market, its global revenues reached almost $120 billion. Additionally, Walmart’s reputation was tarnished by allegations that it had made payments to officials in China, Mexico, and other countries.
Opportunities
Walmart may embrace the opportunity by expanding into other areas, such as the Middle East, China, and Latin America. Walmart can join other retail behemoths or create strategic relationships with essential firms (Zhang et al. 146). Walmart may gain by acquiring small firms. Introducing cutting-edge improvements in human resource management to Walmart might be an excellent opportunity. The opportunity to innovate in people management is crucial, given its dependence on its personnel.
Sometimes, inexpensive items are of low quality; Walmart can enhance the quality of its products to meet consumer health concerns. Additionally, online shopping has experienced significant growth over the past few years. By improving its online sales platforms, Walmart may seize this chance.
In 2020, Walmart announced that it would contribute $1.2 billion to Flipkart (Pattanayak 122). With four healthcare centers across the US, Walmart is in the healthcare sector. It might expand healthcare services to capitalize on the sector’s demands. The business announced the establishment of Walmart Insurance Services LLC, its newest venture into the healthcare industry.
Threats
Walmart is a continual target for rivals; the Impeach 45 controversy has lately brought attention to Walmart. It featured T-shirts designed to encourage violence (Zhang et al. 145). Walmart asserted that independent sellers on its marketplace provided the T-shirts, not the company itself.
In a 2017 case, it was also alleged that Walmart sold counterfeit craft beer. The labeling and advertising of the beer claimed that an imaginary company produced it. Direct competitor Target offers comparable goods of higher quality. Costco, on the other hand, enables bulk purchases. These businesses have a fantastic reputation for treating their employees adequately compared to Walmart.
The market is now flooded with small-scale and independent online retailers selling the same products at comparable prices; thus, the company’s long-term viability could be in danger. Due to technical issues, customers frequently express discontent with Walmart’s website (Zhang et al. 142). The website loads slowly, and its content is not well-organized.
However, Amazon is well-known for its speedy, reliable, and well-organized website, which provides customers with a great online shopping experience. Walmart had over 25 operating markets as of January 2020, including over 400 stores in China. A multinational firm is vulnerable to trade conflicts and may be hurt by trade wars between China and the United States.
Company’s Vision and Mission Statement
Walmart Inc. aims to help consumers save money, enabling them to live better lives. This mission statement directly impacts strategic business choices, which align with the retailer’s motto(Allister-Slosburg 18). As stated in its mission statement, Walmart’s business tactics and objectives include leveraging pricing as a key selling feature to attract its target customers. As a result, the importance of this selling element is emphasized in many of the retail companies’ advertisements.
Walmart chose busy families because, in their estimation, a sizable portion of the families fall into this category. That narrows their emphasis and influences their company approach. This concentration enables a more effective and successful execution. In addition, as Walmart notes, they discovered that by catering to a particular market, they better served the needs of everyone else.
Walmart Inc.’s mission is to create a location where customers can save money regardless of their shopping preferences. This vision statement was made public during the company’s 2017 investor presentation (Vaněk 24). The previous vision statement for the company was to make it the best retailer in the eyes of consumers and employees. The new corporate vision reflects Walmart’s strategic revisions in response to changing market conditions and the overall situation of the global retail industry.
The Company’s Industry and Its Main Competitors
Walmart has always had opponents, but those adversaries have shifted as the firm has grown and expanded. Initially, Walmart’s competitors were likely small, local mom-and-pop stores scattered across the country (Wahlen 14). Instead, in suburban areas, Walmart gained popularity as a concept for consolidating various services and items under one roof.
Smaller businesses found it impossible to compete on a broad basis with Walmart. Because Walmart combines food, department store products, and services under one roof, it is difficult for specific consumers to meet Walmart’s low-price guarantee. Walmart could compete for the best price by acquiring large quantities of commodities and regularly distributing them at reduced costs to smaller stores that could not afford to do so.
As a result, Walmart could compete with larger retailers, most notably Sears. Sears has long been known as America’s department store. The Sears catalog was well-known for selling almost anything imaginable. Walmart competed with Sears and grew faster than Sears, achieving the explosive growth pace set forth by Walton in the 1980s, largely due to its business strategy of supplier linkages and rapid expansion into suburban areas. Walmart’s growth in the 2000s coincided with the emergence of internet shopping (Wahlen 15).
Amazon surpassed Walmart as its primary competitor and has remained so to this day. Due to its massive online sales presence, Amazon has risen in power as Walmart’s primary competitor, posing an impending threat to Walmart’s marketing approach, which the company is currently reacting to. Walmart already had a significant supply chain presence, but it did not capitalize on Amazon’s online shipping supremacy, thereby posing a threat to its operations.
The Company’s Strategy
The success of a corporation is primarily determined by how competitive its approach to operations is compared to other market participants. Walmart has succeeded in the retail industry due to its practical and low-cost competitive strategy, which has made it a trustworthy and cost-effective provider (Zhang et al. 146). One critical step that has set Walmart apart in the retail industry is its increased emphasis on improving customer service. Undoubtedly, it has accomplished this by providing more training to its employees, offering higher earnings, and enabling them to advance their careers within the firm.
Walmart has developed its low-cost supplier strategy by launching several significant initiatives. First, creating an online system enables them to communicate sales information with their vendors in real-time, thereby meeting client expectations (Zhang et al. 146). For example, consumers’ heightened health concerns have increased demand for fresh vegetables and organic meals. As a result, the sharing of prom information enables them to capitalize on such occasions by providing clients with what they need. This is advantageous to both them and their suppliers.
Walmart’s use of automation technologies in its distribution facilities has given it a cost advantage by delivering faster and more efficient services while employing fewer people. This gives them a 5% cost advantage over their competitors in terms of labor expenses (Wahlen 14). Walmart also reduces operational expenses by reducing the distance traveled by its delivery vans. This reduces fuel consumption while also providing good value for money. Furthermore, their bargaining power in obtaining real estate facilities reduces operational expenses. Then, using its cost advantage, Walmart undercuts competitors, increasing shopping traffic.
How the Company Deals With Ethics
Ethics and diversity are two crucial elements in the business world. What is best for society and its people is at the heart of ethics. Ethics may also impact people’s conduct and decisions (Wahlen 15). Diversity, like ethics, may be viewed as a practice that encompasses everyone, regardless of race, gender, ethnicity, sexual orientation, or any other characteristic. Walmart is a company that takes pride in its commitment to culture and ethics. Ethics and diversity are critical in determining whether a firm succeeds or fails in today’s society.
Walmart values the reputations of its workers, customers, and the company. It adheres to a code of conduct that states this Statement of Ethics should serve as a guide for acting with integrity as a Walmart associate. It is a daily tool for making morally righteous judgments that adhere to all laws and customs. Walmart publishes various global policies and provides associates with information on these rules as needed.
Today, diversity, like ethics, is critical to the success of any firm. Therefore, Walmart prohibits discrimination in employment, employment-related decisions, or business dealings based on race, ethnicity, religion, national origin, veteran status, marital status, pregnancy, or any other status protected by law or local policy (Statement of Ethics). Today, businesses need diversity, and everyone must appreciate one another. Unfortunately, as previously stated, gender discrimination has been a significant worry for Walmart.
Walmart has claimed to treat all customers equally and equitably, regardless of race, gender, sexual orientation, religion, or other factors. They have, however, occasionally failed to do so. Walmart, for example, publishes an annual ‘diversity and inclusion by the numbers’ report that contains various charts and data about its employees’ gender and race.
Additionally, Walmart strives to create a community and workplace where everyone is welcome. In recent years, Walmart has made significant investments in building a more inclusive and diverse environment (Wahlen 15). Furthermore, in June 2020, Walmart and the Walmart Foundation pledged a $100 million five-year commitment to the Center on Racial Equity. This nonprofit delivers counseling across Walmart to combat prejudice and promote equality in America.
Walmart has taken significant steps to rectify its past mistakes and promote more inclusive diversity practices. However, like many other organizations, Walmart has been subjected to unethical corporate practices(Wahlen 14). Despite previous concerns, Walmart has an extensive list of its policies and the requirements for becoming a Walmart employee. Ethics and diversity are two of the essential components of the corporate world. Companies must prioritize their people before their demands as the globe develops.
Recruitment Tool or Software to Recruit Employees
For management and supervisory positions, Walmart utilizes both internal and external recruitment sources. Internal recruiting sources include trainees, transfers, and current workers, whereas external recruitment sources include campuses, past candidates, and job advertisement responders (McGee 2). The types of recruiting employed include both direct and indirect strategies. For example, contacting prospective workers directly is one way to be used.
In contrast, some indirect tactics include advertising on various media platforms, such as the company’s website. For the selection procedure, the organization looks for interpersonal skills, a clean criminal record, and a relevant education and training background, among other things. The approaches and procedures utilized in the selection are structured interviews and job knowledge evaluations. In addition, Walmart employs incentives, recognition, academic credit, promotions, and training and development to keep employees.
The critique tackles the procedures of employee selection, recruitment, and retention utilized by Walmart in a concise manner, making the essay eloquent and easy to grasp. However, the author fails to convincingly confront Walmart’s techniques and approaches (Zhang et al. 142). The article is very brief and lacks in-depth information about how Walmart operates.
The article discussed Walmart’s many tactics and strategies for staff selection, recruiting, and retention. The author presented everything clearly, yet some flaws were evident, as shown above. Nevertheless, the essay demonstrates that Walmart has employed highly successful and effective staff selection, recruitment, and retention techniques.
Survey
The Walmart Survey was created to gather feedback on consumer views, satisfaction, and experiences at Walmart stores. By studying specific essential concerns and issues, the research site enables clients to submit their ideas on customer service, shop facilities, the performance of shop items, guest satisfaction, and other related matters. The primary goal of this online survey is to validate customers’ perceptions of store service, collect consumer feedback, and enhance the facilities(McGee 3).
To participate in the survey, one must be at least 18 years old; alternatively, parents may administer the survey on their behalf. In addition, the customer had to be a United States citizen, a resident of the District of Columbia, or a resident of Puerto Rico. Employees and employee relations were not eligible for any study at Walmart. The findings were that Walmart.com shoppers are seeking amazing discounts to save money, in keeping with the company’s tagline. Live better. Shoppers identified lower pricing as the top reason they buy on Walmart.com, and 41% preferred Walmart.com above other marketplaces because they enjoy Walmart’s prices.
Walmart’s Culture
A company’s organizational culture refers to the mission, goals, expectations, and values that guide its employees. According to Hofstede’s cultural dimensions, companies with a solid corporate culture outperform their less structured competitors in terms of profitability because they have established processes to foster employee engagement, productivity, and dedication. To succeed as a business, everyone in an organization must embrace the culture as a business strategy. Positive cultural activities do not rival economic aims; culture is the means.
Sam Walton created the company’s culture based on four fundamental values or tenets: customer service, respect for others, striving for perfection, and acting with integrity. Regarding Client Service, the business believes the client is the boss, so they should be prioritized (McGee 3). Regarding Individual Dignity, the company respects, honors, and recognizes each colleague’s thoughts and accomplishments. As a result, Walmart regards its managers as servant leaders who are responsible for teaching new colleagues to reach their full potential.
Concerning Strive for Excellence, the organization encourages its staff to work as a team, be inventive, and try new ways to attain high standards. Walmart believes that all workers should be honest, speak the truth, keep their commitments, and be transparent and fair in their interactions with all stakeholders of the company. Furthermore, personnel must follow corporate norms and laws and make decisions only in the corporation’s best interests. Based on personal observations, Walmart’s work culture is the critical engine of its growth and success.
In addition to teaching its employees to drop everything and serve customers because they are the boss, Walmart exhibits many other essential characteristics. It is vital to underline that Walmartholds all workers to the same high standards of customer service, whether they are internal or external consumers. Regarding internal customers, the firm treats its employees as if they were customers. Due to this, anytime a Walmart employee wants assistance, their coworkers respond.
Change and innovation, as well as taking risks, are two other traits exemplified by Walmart. The Walmart management team gathers annually in the first week of January to explore new ideas and methods, and how the company may develop to remain competitive. Sam Walton, the organization’s founder, always looked for new ways to do business. It’s worth mentioning that Walmart’s founder was a master of change and a pioneer in his industry, with an extremely high tolerance for calculated risks.
With the support of the Walmart work culture technique, it is feasible to undertake a change project. As previously said, striving for excellence is crucial to the company’s culture. People who feel this should collaborate and accept innovative ways of doing things.
On the other hand, Sam Walton believed that most of the company’s problems could be solved by studying competitors’ strategies and changing to remain competitive. According to reports, Walmart executives visit competitors’ stores to learn from their strategy. As a result, Walmart’s work culture enables the company to support any reform initiative as long as none of the other pillars are breached.
At Walmart Stores, the information flow begins when the company provides the consumer with the product, its price, and related information. Then, when a customer makes a purchase, they are asked to transfer funds to a Walmart location. According to Hofstede’s cultural aspects, Walmart’s highly organized work environment aids in developing processes and directing decision-making. It also helps the company overcome barriers brought on by uncertainty. Finally, it guarantees that its personnel are connected by a transparent corporate culture that supports disciplined work practices, which makes them more inclined to collaborate with a feeling of purpose.
Recommendations
Wal-Mart should take several steps to improve service delivery. First, the firm should limit the RFID mandate to things that do not contain vast amounts of liquid or metal (Muzumdar 24). This would provide vendors and suppliers enough time to confirm the reliability of all product tags.
Second, the firm should use its purchasing power to join a purchasing consortium. Third, it should make an effort to make its consumers aware of the numerous information systems that it utilizes. This would guarantee that the company’s investment in information systems is well used.
Walmart’s most valuable assets are its global supply networks and size (Wang et al. 153). Its major faults are in the domains where Walmart highly emphasizes sustainable development and the internet. Walmart’s ability to compete with Amazon will be a significant problem in the future. Amazon made an explicit foray into the retail grocery industry with its acquisition of Whole Foods, and Walmart is already losing ground in the internet market. E-commerce has the potential to either make or break Walmart.
Last but not least, Walmart has to keep emphasizing big data analytics. It must make significant intellectual capital investments to catch up to Amazon. Smartphone users visit stores four more times and spend 77% more money than non-users (Wang et al. 155). As a result, Walmart’s digital strategy will be a crucial component of its e-commerce strategy in the future, providing the corporation with a long-term competitive advantage.
Conclusion
To conclude, Walmart employs 2.3 million proud Walmart associates worldwide, ranging from truck unloaders earning their first jobs to some of the industry’s most powerful executives – and everything in between. The CEO, Doug McMillon, has held both positions, and his experience is not unusual among Walmart’s senior executives. Moreover, because of the unique blend of career paths, benefits, and salary, individuals can construct almost any career they desire here.
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