SWOT Analysis Of Walmart: What You Need To Know

You all may have heard the name Walmart. It is one of the biggest names in the retail industry. It operates a chain of supermarkets, discount stores, and grocery stores in the United States. Now, what makes Walmart so successful and relevant in the market still today? To understand what makes any company competitive, we need to understand it through a SWOT analysis.

Before the SWOT analysis of Walmart, here is a quick brief overview of this company.

• Founders: Sam Walton, James Walton
• Headquarters: Bentonville, Arkansas
• Industry: Supermarkets, discount stores, grocery stores, and more.
• Revenue: USD 572.8 billion for Financial Year 2022
• Official Website: Walmart

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Check our in-depth article here!

SWOT Analysis Of Walmart

Let’s begin the SWOT analysis of Walmart in detail

S: Strengths Of Walmart

1. Established Global Brand

Walmart is now an established brand in the retail industry. It is indeed a retail giant. You can see most people casually using the term “Walmart” whenever they have plans to buy anything. It is a common household name when it comes to retail shopping. This established brand is quite tough to compete with. Walmart was able to establish itself in the market in the very early days of retail competition.

2. Global Presence

Walmart started its journey in the United States. However, now it is present in almost 27 countries. It operates around 10000+ stores worldwide. Being able to expand in these 27 countries when other retail companies were just starting out is the game-changer for Walmart. Walmart as a company has been great in opening and capturing the market in most places they dived into.

3. Effective Supply Chain And Logistics

Walmart have amazing and commendable operations of supply chain and logistics. Since the early days of its journey, Walmart has been able to maintain a great process in logistics. And all this without the easy-to-use tracking tools and the internet we have today. Moreover, as the internet came into being, Walmart gradually optimized everything using the latest technology available.

4. Large Employee Base

Walmart employs the largest number of employers in the United States. It has around 2,300,000 employees as of Jan 2023. This is quite an achievement and a stronghold for Walmart. With such a huge customer base, it holds great importance in employment generation. Moreover, for every project, Walmart is able to handle every process efficiently with such an employee base.

5. Subsidiaries

Walmart did not only focus on its own operations, but also on acquiring many other companies in its journey. The subsidiaries of Walmart allow a continuous competitive position in the market. Walmart has acquired many companies like Jet.com, the Indian e-commerce giant Flipkart, Shoebuy, and many more.

6. Fixed Costs And Low Prices

Walmart offers a wide range of products with a fixed range of prices. You can actually buy the product at any time of the year within a fixed price range. Apart from this, most of the products for daily household chores and way cheaper than other competitors. It helps people choose Walmart over any other outlet in most cases.

W: Weaknesses Of Walmart

1. Low-Profit Margins

It is no doubt that Walmart has been successful in becoming a common household name. However, the reality for Walmart is that it runs on very low-profit margins. The way it provides good quality products at fixed prices and low prices is the main reason behind this. Despite this fact, Walmart is still able to run in a profitable condition across the entire year. Still, this is a weak area of Walmart that it is trying to work upon.

2. Business Model Can Be Imitated

Yes, Walmart is a big name in the retail industry. The business model of Walmart was unique and free of competition in the early days of its journey. But now, opening a retail store is quite easy. This is the reason why Walmart deals with a lot of competitors every now and then. As of 2023, Walmart is not offering something unique. So, many competitors out there are actually becoming stronger in terms of revenue and user acquisitions. Walmart is not delivering any competitive edge over its rivals apart from its early establishment and brand name.

3. Poor Employee Working Conditions

There have been many cases and lawsuits against Walmart alleging them of providing poor work conditions for employees. Walmart has been accused of gender discrimination. As per lawsuits, female employees do not get equal opportunities in promotions and work profiles. Apart from this, Walmart was also accused of promoting a pay gap among employees. Many employees have accused Walmart of having a large pay gap despite same work profiles. These accusations have tarnished the image of Walmart to some extent.

4. Poor Healthcare For Employees

Walmart has been accused of providing poor healthcare services to its employees. The main allegations hold that its healthcare structure for its employees is very costly. Moreover, against this high cost, the benefits stand too low. As healthcare is of utmost importance for all ages, this has raised many concerns and lawsuits against Walmart.

O: Opportunities Of Walmart

1. Expand In Asian And GCC Territory

Walmart is present in around 27 countries at the time of writing this article. But the major thing to note is that these countries are not primarily in Asia or GCC region. Walmart has well expanded its business. However, It still remains unexplored for Asian and GCC regions. Considering how these regions are way ahead of others in digital and offline space, Walmart can make use of such a huge market.

2. Increase Online Sales

Walmart started way back when there was no e-commerce. That was the time when Walmart came as an angel for everyone. It allowed supply and demand to work for themselves and provided a simple gateway. However, in today’s era, digital shopping is more relevant for many products and consumers. Walmart can strengthen its online presence and drive more revenues through an e-commerce strategy. Moreover, in order to dive deep into e-commerce, Walmart acquired Flipkart – the Indian e-commerce giant.

3. Acquire More Subsidiaries

Considering subsidiaries are a stronghold for Walmart, it is still not explored enough. Most of the giants in different industries are acquiring subsidiaries from other industries. This has helped these companies expand their revenue sources and vision. Walmart is the biggest retail chain out there and should explore different domains and markets too. Walmart has been a little passive in acquisitions and mergers. Being in the top revenue-generating companies, acquisitions can help Walmart strikethrough.

T: Threats To Walmart

1. Constant Competition

Being the largest offline retail store in the world, it faces stiff and constant competition from its competitors. Although Walmart is an established brand, new companies are performing quite well and this can be alarming for Walmart. One of the major competitors to Walmart – Target is performing quite well. Moreover, its work culture and healthcare policies for its employees are better than Walmart’s.

2. Outperformed By Other Retails In Online Sales

Walmart may be the biggest player in the retail market. However, it still has to walk miles in the online e-commerce space. Many other e-commerce giants like Amazon, eBay, and many more are performing better than Walmart in online sales. Considering the age of e-commerce and online shopping – this is a severe threat to Walmart. Transitioning into an online store is a must for any business to survive in today’s era.

3. Lack Of Technical Expertise

Customers have raised suggestions and complaints about how inorganized is Walmart’s website. This came when many users used its website for online shopping. Their major concerns were slow running time and poor listing of products. When compared to Amazon this becomes something that cannot be neglected. Amazon and many other small e-commerce companies are providing better online shopping experiences to their users.

4. Competitors Providing Better Work Policies And Healthcare

As Walmart has been accused of providing poor working conditions and healthcare for its employees, the competitors are performing well in this aspect. Most of its competitors like Target, Amazon, eBay, and many more provide amazon benefits to its employees. The work conditions for their employees are better than Walmart’s. Moreover, the healthcare policies provided by the competitors are quite flexible and affordable for all employees.

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