Wal-Mart Industry Analysis

Published: 2021-06-29 06:55:30
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Wal-Mart Industry Analysis        B BUS 470CAnchao WangWal-Mart Industry AnalysisIntroductionWal-Mart is one of innovative, leading and successful company in the world. Wal-Mart was established by Sam Walton in 1962, it was incorporated in 1969, and officially listed on the New York Stock Exchange in 1972. In the year 1962, Wal-Mart was just a small store and was doing small business in Roger, Arkansas (Wal-Mart, 2017). But now, it became the biggest retailer in the world. Today, this retailing pioneer has annual revenues of over $480 billion, about 11,500 stores and employs an astounding 2.1 million people worldwide. The selling philosophy of Wal-Mart is “provide everyday low prices and superior customer service” and it implements this philosophy from the products it stocks to the front-end equipment which helps speed checkout. Because of the low price strategy, Wal-Mart can reduce the cost of sales promotion and make its sales more predictable. Wal-Mart also spent a lot of money to invest its special cross docking inventory system. This cross docking inventory system can helps Wal-Mart to achieve economies of scale which reduce its costs of sales. Goods can be constantly delivered to stores within two days and often without stock with this system. It speeds up Wal-Mart to replenish the shelves four times than other retailers. Wal-Mart takes advantage of its buying power to purchasing products in bulks and distributing products by itself. Wal-Mart guarantees everyday low prices while provide “one stop shop” service.Wal-Mart also operates international business and open stores worldwide. The store of Wal-Mart in Mexico as Walmex, in the UK as ASDA, and in Japan as Seiyu. Of course, there are successes and failures, Wal-Mart's investments outside North America have had mixed results: its operations in South America and China are successful, while it had to withdraw from Germany and South Korea market because ventures there were unsuccessful.SWOT analysisStrengths        As the largest retailer in the world, most of Wal-Mart’s strength are relates to its business size. This such huge business size makes Wal-Mart can deal with many threats despite its weakness. Wal-Mart’s business size include its Global organizational size, Global supply chain and High efficiency of supply chain. The global organizational size provides capital for Wal-Mart to fund development and expansion. The global supply chain can help Wal-Mart keep market elasticity and cope with marketing risks. Also, Wal-Mart can maintain high efficiency in its supply chain because of Wal-Mart used advanced technologies to monitor and control the process of the goods from suppliers to stores.Weaknesses        Just like other companies, Wal-Mart also has weaknesses. Wal-Mart’s weaknesses are related to its own business strategy. Wal-Mart is using the cost leadership strategy, which makes it has thin profit margins and its business model is easily copy by other companies. The typical effect of using the cost leadership strategy is thin profit margins. Wal-Mart wants to keep low prices for customers, so they need to lower its profit margins and they make profits heavily rely on its sales volume. Also, Wal-Mart’s business model is easy to be copied by other companies because of this business strategy. Wal-Mart’s business model is similar with most other retailers and has nothing special. But the business size of Wal-Mart is incomparable.

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