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Weaknesses
1. Lack of presence in
many developed countries
3. Continuous growth
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
customers.
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
technology.
Weaknesses
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
Metro.
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
Strengths
Weakness
Wal-Mart has also shown a weakness in the area of human resource management
practices.
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
employees.
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.
Loyal customers
Great pricing
Good locations
Good locations
Weaknesses
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.
Many communities dislike Wal Mart because they put their small business out of
business