Swot Wal-Mart
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Executive Summary
Wal-Mart, its everywhere you go these days no matter the locality in which one lives. Then again, would you expect anything less from the most dominant player in the retail industry? One, in which is the largest employer in the United State at a staggering 1.6 million employees. As is the case with any company, Wal-Mart has its own distinctive strengths, weaknesses, opportunities, and threats. With Wal-Mart being the dominate power it is, they have created a bulls-eye on them for public criticism. Because of this, Wal-Marts main objective should be to improve its public image. It can do this by putting forth an action to resolve its negatives in its labor, litigation, and quality aspects of its company. By offering more competitive wages/benefits packages and cleaning up its legal issues with its employees coupled along with providing better quality products Wal-Mart will intensify there case in being the dominant retailer for years to come.
Strengths
Wal-Mart has multiple strengths which is evident to its incredible success. There main strength, which can be seen throughout there stores, is the concept of “low costs.” The creator of Wal-Mart, Sam Walton, instilled the concept of only marking up products 30% when in reality they could have reaped rewards if for not keeping it at that low of a percent. Low prices for the products they sell arent the only aspect of Wal-Mart that plays a prominent role in its development of being a strength. Low costs are a strategy implemented by Wal-Mart that can be seen in the wages/benefits offered to its employees and by keeping its overhead as low as possible.
Wal-Mart employees are under paid compared to that of rival employers. An example of this compares Cosco, a rival of Wal-Mart, paying there employers an average wage of $16/hr compared to $12.28 to that of Wal-Marts. Not only are the wages they pay are less competitive, but employers spent anywhere from 8-13% higher than the national average for the benefit packages they offer all of which help keep cost at a minimum.
Wal-Mart is able to keep its overhead as low as possible is due to its noteworthy logistics system. They are able to ship merchandise from any of their numerous distribution centers in order to provide the cheapest and most efficient route. The invention of sharing sales data with suppliers through computer programs has allowed Wal-Mart to consistently keep their shelves stocked with popular items. Technology in general is an unbelievable strength that Wal-Mart is able to invest in to improve their company.
Due to Wal-Marts concept to low costs it has led to a loyal customer base. This concept has produced major profits which has given Wal-Mart the opportunity to expand nationally and more recently worldwide.
Weaknesses
In the eyes of some of the general public, Wal-Mart has weaknesses that affect not only their image, but the lives of other people. Some view Wal-Mart as a retailing giant that has taken over the retail industry. Because of Wal-Marts low prices and well-known name, they have been able to capture the sales of an unbelievable number of consumers, and have therefore made it extremely difficult for small retailers to survive. Ethical shoppers, those who are concerned with the well-being of small retailers, are angry at the monopolizing power Wal-Mart has been able to gain in the past few decades. Most small shops have been forced to close due to lack of sales. Some people refuse to shop at Wal-Mart because of these issues. This poor image that Wal-Mart has in some peoples eyes has taken a toll on its stock price as well.
The employees of Wal-Mart can suffer a great deal as well. Many receive only poverty-level wages and horrible health care benefits. This has been stated that this in return has forced many employees to resort to some kind of public assistance. Wal-Mart has also had multiple court cases ranging from Fair Labor Standards Act to gender discrimination. Because of these criticisms, employee morale has been decreased as well.
Finally, the size of Wal-Mart has given it a disadvantage in the fact that it will always be under microscope of the public and that nothing it does will go unnoticed. As little as something may seem, it will be just that more easily pointed out, just the reason it is Wal-Mart and not some small type retailer.
Opportunities
With the weaknesses Wal-Mart entails, it could very well work-out these problems. From a PR standpoint, Wal-Mart has changed its advertising focus to show people that is more than just a faceless company but company made up of people just like you. They are doing this by focusing less of “slashing prices” and more of creating a more personal approach.
Wal-Mart has a great opportunity to improve its health care benefits program. There is room for improvement and they know this. What Wal-Mart has to do though is to improve upon what is already established, but has to do