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1. Well established brand awareness

1. Lack of presence in
many developed countries

2. Cost leadership in comparison with competitors


2. Failure of entering foreign

3. Continuous growth

3. No formal mission statement

4. Control over suppliers

4. Continuous product recalls

5. Profitable organization of distribution channels

5. "Everyday low prices" could
be connected to poor quality
1. Well established brand awareness.
With their more than 8,500 stores, Wal-Mart represents the number one
retailer in the world. By providing 15% to 25% lower prices for grocery products
than the average retailer store Wal-Mart can support their strong brand attribute of
offering everyday low prices. As shown with in a study Wal-Mart is the only retailer
in the U.S. that carries two brands which are directly identified and connected to
Wal-Mart by more than 52% of all American women.
To establish their brand awareness also through modern networks, Wal-Mart makes
use of social media networks like Facebook.
All in all it is possible to say that if you believe the experts, Wal-Mart is a store that
every single citizen, at least in the United States, knows.
2. Cost leadership in comparison with competitors Wal-Mart makes use of the cost
leadership strategy which gives them a competitive advantage. In the beginning,
when Wal-Mart was not that well known, they had to develop economies of scale
and find as many ways as possible to reduce costs. One way was to cut down
overhead costs, keep the inventory level as low as possible and gain high control
over suppliers.
Today they are able to keep their concept of everyday low prices on offer.
One of Wal-Mart key areas on strength is in the company ability to manage its cost.
Wal-Mart has always relied on a cost leadership strategy to enhance its
competitiveness in the market. Cost leadership is a business concept that focuses
on reducing organization costs through promoting efficiency and size. Wal-Mart has
so far been very successful in implementing this strategy.

Wal-Mart has always strived to improve the efficiency of its supply chain in do to
keep the cost of operation down through technology and other strategies. Wal-Mart
low cost strategy has worked well for the company as it has enabled the company
to deliver its services to the customers at relatively low cost). This has given WalMart a competitive edge over other retail companies. Today, Wal-Mart enjoys the
biggest share of the World retail market due to its ability to deliver fair prices to the

3. Continuous growth Wal-Mart is a continuously growing company. From their

foundation in 1946 until today they developed a network consisting out of 891
discount stores, 2612 Supercenters, 602 Sams Clubs and 153 Neighborhood
When taking a look at the net sales from year 2007 up to 2009 one can see an
increase from $344.7 billion to $401.2 billion. Important to mention in this case is
that although there was a financial crisis within these years Wal-Mart was still able
to keep on growing.
4. Control over suppliers. All in all it is possible to say that many of Wal-Marts
suppliers totally depend on this collaboration. The majority receives more than 30%
of their revenues from the huge retailer.
Because of increasing debts and financial problems Wal-Mart founded the Supplier
Alliance Program that they offered some selected supplier to give them a new
financing option. With the help of this program Wal-Mart wants to ensure the steady
flow of inventory. From the view point of suppliers it makes them even more
dependent on Wal-Mart.
5. Profitable organization of distribution channels. By making use of latest
technology Wal-Mart creates highly automated distribution operations. Tobe as cost
effective as possible Wal-Mart frequently orders their stock and maintains a close
connection with their vendors.

6. Another key area of strength for Wal-Mart Stores is having greater financial
strength. A Wal-Mart Stores, Inc has enjoyed a period of financial stability for the
last three decades. In the last financial years, 2011/12, the company earned $ 440
billion in revenues and over $ 15 billion in profits (Wal-Mart Stores, 2012). The good
financial position presents Wal-Mart with various advantages over its competitors.
One of these advantages enjoyed by Wal-Mart dues its financial strength is ability to
conduct rapid expansions.

Wal-Mart is widely known for its aggressive expansion strategies. The companys
financial position gives it the power to take over smaller stores or open up new
stores in areas that present good business prospects (Griffin, 2011). This rapid
expansion has increased the company share in the market as well helped the
company to increase its revenue. The rapid expansion has also supported Wal-Mart
low cost strategy by giving the company the advantages of economy of scales and
huge bargaining power over the suppliers. The good financial position means that
Wal-Mart is a better position to invest in activities such as marketing and

1. Lack of presence in many developed countries. At this point in time Wal-Mart is
mainly present in continental US and additionally 14 other countries. It is important
to mention that they are not present in Europe yet, except for the United Kingdome.
Other developed countries such as Australia are not entered yet either.
2. Failure of entering foreign markets. The unsuccessful entrance in the German
market symbolizes a significant example for this weakness. In the year 2007 WalMart finally decided to sell 85 German stores to its competitor
Because of poor inter-cultural management and a poor approach to international
marketing Wal-Mart lost a lot of money. They had to realise that simply trying to
convert the American way of retailing to Germany did not work out.
3. No formal mission statement. The mission statement should give an answer to
the question What is our business. Within the mission people can identify the
companys main purpose and objectives. This is especially important for employees
to ensure that everybody knows in which aspects the company is engaged in and
that everybody is working in the same direction. Therefore a lack of a formal
mission statement can lead to an internal weakness.
4. Continuous product recalls. The company image is always suffering if it comes to
product recalls. In the year 2007 for example Wal-Mart had to recall several toy
products which were produced in China.
What huge impact this has for the image shows a customer study made afterwards.
This study documents that 39% of respondents were more fearful to buy products
from Wal-Mart in comparison to 22% for their competitor Target.
5. Everyday low prices could be connected to poor quality

There are several people who believe that Wal-Mart offers low quality just because
their prices are so extremely low. Everybody knows that if a company always offers
way lower prices than competitors, it is in need of cheap producti

Wal-Mart has also shown a weakness in the area of human resource management
Wal-Marts pursuit of its low cost strategy has seen the company adopt some
human resource policies that are not favorable to the employees. In several
occasions, Wal-Mart has had to deal with labor relation conflicts especially in the
United States market. In many of these occasions Wal-Mart has been accused of
poor remuneration of workers and long working hours (Banjo, 2012). Wal-Mart weak
HR policies have had various impacts on the company. One of these impacts is
tarnished image of the company.

The battle between employees and labor union is spoiling Wal-Mart brand in the
market. This has threatened the company market share as some customers do not
want to be associated with a company that oppresses workers. In some instances
the company has had to pay civil
penalties for violating employees rights. In May, 2012, Wal-Mart was ordered to pay
$4.8 million
as back wages, damages and civil penalties for failing to pay over time to its

Wal-Mart also has a problem in managing customers experiences. Though, the

company has
managed to attract a large number of customers through its cheaper prices, various
indicate that the company does not provide the most satisfying experience to
customers. A
survey to a survey conducted by ABC (2010) ranked Wal-Mart second last among US
11 major
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retail stores in terms of providing quality experience to customers (Kushner, 2010).
Stores were

rated according to attributed such as; speed of service, ease of returning items,
value, problem
with staff and product quality. Poor customer experience is also costing the
company a
considerable portion of its Market share.

Swot Analysis of Wal Mart Strengths

When you begin to look a SWOT Analysis, you should look at what they do right and what
their strengths are.
The strength of Wal Mart is that they have developed a loyal customer and employee base.
This base is extremely loyal. They achieved this loyalty with good customer service for their
customers, great pricing for the products they sell and by moving to areas of the country
that are often ignored by other retailers. As for their employees they offer flexible hours,
competitive wages, health insurance and discounts for their purchases.

Loyal customers

Great pricing

State your third item

Good locations

Good benefits for full time employees

Good locations

There is however weaknesses found in the Wal Mart SWOT. For example, in order to keep
their pricing down they need to buy in large quantities. This need can lead to their inventory
being a little unreliable. This means that you may not always be able to find certain things
that you normally buy all the time or perhaps they will have it but you will need to buy a
much larger size then you actually need. Another often mentioned weakness is that they
tend to keep more part time employees than they do full time.

Carry large inventories

Stopped buying America

Not many size selections for the consumer

Staff is mostly part time employees that do not receive benefits

Many communities dislike Wal Mart because they put their small business out of

Sales products from other countries with unfair labor laws