Trends and Changes of the External Environment influencing the Company’s Marketing Plan
Technology
Walmart employs blockchain, using a distributed ledger technology, to develop an automated technique to manage payments and invoices from its 70 outsourced freight carriers (Vitasek et al., 2022). It consulted DLT Labs, a pioneer in deploying and developing inventive enterprise solutions via distributed ledger technology (Vitasek et al., 2022). Walmart’s decision to use blockchain technology allows it to provide its offerings to a large population in Canada without errors in orders as this system is effective, promoting loyalty among its users. Furthermore, blockchain technology provides a safe environment for the company’s customers as each transaction has a distinct identifier, eliminating possible issues with tracking. This efficiency in order provision and tracking promotes the company’s business, ensuring its customers trust it to provide their goods without failure or payment issues.
Economic
Walmart Canada decided to invest $3.5 billion in 2020 (Walmart Canada, a, 2020). Over five years, it intended to produce substantial growth to make the in-store and online shopping experience faster, simpler, and more reasonable for its customers (Walmart Canada, a, 2020). It results in a faster and better e-commerce experience and contemporary digital instruments ensuring associates serve customers best. As the organization’s business develops, especially with the-commerce and grocery illustrating an exponential growth, Walmart is unlikely to concede on offering its signature low price to customers. The company has developed trust based on this in-store and online factor. This investment would elicit many Canadian construction jobs and elicit novel partnerships with Canadian technology organizations, further marketing Walmart as a positive force in the economy.
Environmental
Walmart encounters various issues, including a negative reputation, stiff competition, constraints in joint ventures and business acquisitions, and rigorous cultural principles in foreign markets. For instance, Walmart has a bad reputation for polluting, as in the case of 2019 when the organization emitted 17.56m metric tonnes of greenhouse gases (Walmart Canada, a, 2020). This issue is detrimental to the company’s image, especially when sustainability and environmental protection are contentious issues for consumers. The company has stated its aim to deal with these climate effects, creating a positive image of a changing organization.
Competitive Environment
Giant Tiger
This is one of the largest discount stores in Canada and provides similar items to Walmart, making it a major competitor for the global store. It offers varying products from hardware equipment to groceries, as with its American-based counterpart (Williston, 2021). Since 2005 the chain has expanded in the Greater Toronto Area, with more than 200 stores open across Canada. Additionally, Giant Tiger utilizes a low-price strategy similar to Walmart’s, further eliciting its capacity to cut into the latter’s market share as it is a local company with greater customer loyalty. Giant Tiger focuses its recent marketing not only on low prices but on the freshness of its products and the fun of shopping in its stores (Lombardo, 2019). These issues put it at loggerheads with Walmart as it uses similar marketing tactics to gain customers.
FreshCo
One of Walmart’s chief competitors is FreshCo, an organization with a growing market share due to new locations opening up in recent years (Toneguzzi, 2021). However, Walmart has quickly rallied its resources to develop a strong online presence, allowing it to develop cost-effective ways to provide its clients with products while alleviating the necessity to visit stores. FreshCo offers fresh, frozen, chilled products, daily baked goods, cheeses, and meats. Walmart’s low-price strategy differs from FreshCo, allowing it to operate at low prices that would be detrimental to FreshCo’s bottom line.
Costco
Finally, Walmart also competes with Costco for market dominance. Costco offers a smaller variety of products to effectively promote and sustain low prices for good-quality products (Chen, 2021). Knowing that low price is the best way of marketing, Costco lowers its budget for HR and advertising. The chain has a unique placement of their warehouse stores, usually in a suburban area, to ensure cheaper rent (Chen, 2021). Costco, similar to Walmart, implements E-commerce, which plays a key role during the global pandemic (Chen, 2021). However, despite Costco’s major investments in the company aimed at opening new stores, Walmart has more locations and can attract more customers this way.
Walmart’s USD
Walmart has a unique selling difference based on its ability to maintain customers through brand loyalty and low prices. It thrives because it relied on economies of scale and could outlast competitors that could not maintain this low-profit strategy. Additionally, customers trust Walmart’s products as it has operated in Canada since 1994 and is considered a household name (Walmart Canada, 2022). The company’s size also boosts its status as it has many branches around Canada, allowing it to provide fast and reliable services to its clients.
SWOT Analysis
Strengths
- Walmart can take advantage of its constantly increasing sales with a higher profit margin than its competitors (Martínez et al., 2017).
- The company has much knowledge of Canadians’ shopping practices based on decades of operations (Walmart Canada, 2022).
- Moreover, it can operate with minimal profit as it developed this strategy to compete favorably in the market.
Weaknesses
- Walmart operates in unchartered territory that requires technological advantages to maintain its market share (Stanwick & Stanwick, 2020).
- With the number of stores open US, the company’s reputation is vulnerable due to the policy violations and the cases of gender and race discrimination in the US, ruining its reputation in the eyes of Canadian customers.
- Walmart’s tainted image in terms of climate change may portray it as a destructive company, reducing its customer base.
Opportunities
- The company’s large size and customer base could form a good background for expanding strategic alliances and partnerships with popular brands and other global retailers.
- It would also benefit immensely from lower costs associated with physical locations, further allowing it to gain a sizeable profit than it currently enjoys (Stanwick & Stanwick, 2020).
- Furthermore, Walmart has an opportunity to gain a larger market share due to its online store, boosting its market presence and customer base.
Threats
- Walmart will have to prove its business-savvy nature to compete against major players such as Amazon.
- Online stores are easier to establish than brick-and-mortar stores, making the threat of new entrants relatively easy.
- Walmart employees are not trained to interact for long with customers, which is an issue that online stores should resolve to maintain loyal customers (Stanwick & Stanwick, 2020).
Possible Implications
Walmart’s size and customer base would help it develop an online market share faster than its competitors could. It should use this advantage to promote its business before it is too late. The organization should focus on internet growth and marketing its products using an online platform as brick-and-mortar businesses fail.
Global Support
Walmart developed an environmentally-friendly business in 2019 to reduce its carbon footprint and promote sustainable business practices. Its Project Gigaton is a global commitment to cut carbon emissions by 1 billion metric tons from its supply chain by 2030. The company also sought to improve its environmental responsibility by selling environmentally friendly and sustainable products. For instance, its decision to buy Tesla semi-trucks for transportation to different areas promotes reduced fuel used in its processes (Walmart Canada, b, 2020). As such, Walmart is socially responsible and sustainable due to good business procedures.
References
Chen, J. (2021). Marketing strategy management of Costco: Analysis and comparison to S-Group. Centria University Of Applied Sciences.
Lombardo C. (2019). Giant Tiger gets inside the heads of its customers. Strategy. Web.
Martínez, A. B., Galván, R. S., & Alam, S. (2017). Financial analysis of retail business organization: a case of Wal-Mart Stores, Inc. Nile Journal of Business and Economics, 3(5), 67-89.
Stanwick, P., & Stanwick, S. (2020). International Management: A Stakeholder Approach. Edward Elgar Publishing Limited.
Toneguzzi, M. (2021). Empire-owned grocery chain ‘Freshco’ expanding further in Western Canada with Safeway store conversions. Retail Insider. Web.
Vitasek, K., Bayliss, J., Owen, L., & Srivastava, N. (2022). How Walmart Canada uses blockchain to solve supply-chain challenges. Harvard Business Review. Web.
Walmart Canada, W. (2020). Walmart Canada announces major $3.5 billion investment for growth and customer experience transformation. Cision Canada. Web.
Walmart Canada. (2020). Walmart Canada more than Triples Order of Tesla Semi Trucks. Web.
Walmart Canada. (2022). Our story. Web.
Williston, V. (2021). Ottawa-born retailer Giant Tiger celebrates 60th birthday. CityNews Ottawa. Web.