2. Founded in 1969 by Sam Walton and joined NYSE in
1972
Aims at providing everyday low prices through solid
financial performance, investment in customer
relevance and commitment to a better world
Conducts it operations in varied formats including
warehouse, discount stores, supercenters dealing with
wide variety of merchandise/products
Has three main business operations classified as :
national branch within United states, overseas branch
and Sam's Club.
3. 1.Political Factors
High political stability and
substantial influence
Globalization
Threat: Escalating labor
and healthcare costs
2. Economic Factors
Growth in 3rd World
countries
Decreasing
unemployment rates
3. Socio-cultural Factors
Ever changing lifestyle
dynamics
Variety in cultural
patterns and behaviors
4. Technological Factors
Business analysis and
trends e.g. e-retailing
Improved usage of
technological devices by
customers i.e. phones
Escalating Business
automation
4. Wal-mart has dissected the market based on the
following :
Demography- e.g. age, race, occupation ,religion factors
Geographic- locations e.g. nation, countries, states, cities
Behavioral- i.e. attitudes, knowledge towards products
Psychographic –lifestyles, social classes, personal traits
This is beneficial in that it helps Wal-Mart:
Develop new products and services to suit unique
consumers
Know what products to supply to whom and where
Establish if customer satisfaction is reached
Design or package products as per gender preferences
5. STRENGTHS WEAKNESSES
Huge market share and diversification in
products
Its every day low pricing strategy for its
products
Set up of small format stores increasing
its competition in the market
Internal control play that provides a solid
foundation for growth
Wal-Mart’s labor relations significantly
affected by increasing lawsuits
Violation of anti-corruption cases
OPPORTUNITIES THREATS
Wal-Mart has strong performance
compared to other retail sectors
emerging in the market
Improvements in online retailing to
enable the company serve a wider
market
Wide acceptance of custom made
merchandise
Significant Increase in competition from
other channels
Escalating labor and healthcare cost
because the company has over 2M
employees
6. Out of its product categories, Groceries and other consumables account for the
largest category- 56% of the sales for Wal-Mart
Adopts low pricing strategy
Competitive Analysis
Distribution Analysis-Sam’s club has 15 times and 4 times the market share
as that of BJ’s and Costco respectively .However, Wal-Mart monopoly markets
have got a lower population density and lower purchasing power ($38000)as
compared to its competitors (42000-$45000)
Price Analysis-Wal-Mart like its competitors tries to achieve the lowest price
possible while maintaining high quality for its customers
The second largest retailer – The Company is also keen on delivering high-
quality products at a discount. Other rival organizations for instance Costco are
taking necessary measures to equalize the playing field by also lowering prices
and ensuring high-quality goods
Products and Services Analysis-Wal-Mart offers a wide range of a variety
of products to ensure it caters for all its consumers needs. It deals with
both its own products label and other brand merchandise as well
7. As regards to products, Wal-mart:
Offers a great wide variety including groceries, beauty ,
sporting ,home, pharmaceutical, wireless transfer
Strategically arranges products based on urgency, frequency
of purchase for easy accessibility
Developed unique brands allowing cut in advertising costs
e.g. Sam’s Choice, Ozark
Ensures safety and quality control of products through
actions like requiring all suppliers to adhere to Global
Initiative for safety food, SPARK system
Aims to meet customer needs by maintaining
communication on their products preferences, tastes etc
Offers services e.g. warranting of products, installation ,
product plan replacement, general merchandise plan
services appealing to consumers
8. Adopted product packaging reflective of global concerns e.
g environment friendly packaging
Have consistently availed its products at an affordable
pocket friendly price
Competitive Advantage
The distinctive features packaging, branding, differentiation
and others features allow for low pricing placing Wal-mart
ahead of other retailers
Yields advantage in economies of scale in selling products
and services
Follow up system allows for evaluation on level of customer
satisfaction, attitudes ,tastes and preferences and
subsequent action to meet them
The branding allows it maintain quite a large market share
e.g. Great Value product brand
9. Wal-Mart has managed to develop continuously a considerably complex but
highly efficient distribution system comprising several channels and equally
top notch strategies such as:
Open and free flow of information in the organization and its partners
Utilization of technology in its distribution networks and its other operations-
e.g. codes, conveyor systems
Use of innovative distribution methods-the cross docking mechanisms and
the consolidation system for products removing storage costs
An elaborate transport system comprising of its own fleet of trucks
Competitive Advantage
The elaborate and effective distribution framework allows for savings in time
and cost enabling for low pricing. All above strategies ensure proper
coordination, smooth movement of products and services, free flow of
information critical in decision making, utilization of technology increases
accuracy and efficiency in handling products from suppliers to consumers,
better control of distribution serves to increase consumer confidence and
dependability for delivery and provision of products resulting to huge
consumer base , huge sales volume, huge returns for the company placing
it ahead of its competitors
10. Promotional strategies used by Wal-mart include:
Repetitive and consistent message as an every day low price organization
Use of one platform to provide all information to consumers i.e. Wall mart
website
Uses Intensive marketing communication which requires feedback from
consumers
Advertisements through television, magazines, posters and the internet
,billboards
Sales promotion through coupons, discounts and selling under private
brand name
Personal selling –assistants provide personalized help and information
desks set up for promotional products
Public relations-one stop for information about company, its policies
,corporate social responsibility (Wal-Mart foundation)
Competitive advantage
Wal-Mart is able to improve its public image ,build customer confidence,
introduce new products , able to predict stock movement and spend less
on advertising utilizing the above strategies catapulting itself at the front of
the other retailers
11. Wal-mart has employed everyday low prices strategy achieved through the
following ways:
Focus on sales and economies of scales to cover low profit margins
Reduction of operational costs and savings thereof transferred to
consumers via low pricing
Diversification of products and strategic locations for stores maintaining
accessibility to high number of consumers
Elaborate and effective supply chain management and technology
Bargaining power to influence prices by suppliers
Implementation of attractive pricing policies e.g. price matching, price
accuracy, discounting initiatives
Competitive advantage
Low pricing has enabled Wal-mart attract and maintain a huge share of the
market share, realize huge product sales volume, secure its reputation as
low priced , boosting customer confidence and loyalty all which work in its
favor a s compared to its competitors
12. Wal-Mart should direct more effort towards
addressing its weak areas majorly on employee
welfare and corruption issues
Maximize on the new opportunities available
including strengthening its electronic commerce ,
and expanding to new markets in the developing
countries among others
13. Perreault, W., Jr., Cannon, J., & McCarthy, J. (2015).Essentials
of marketing: A marketing strategy planning approach (14th ed.).
New York, NY: McGraw-Hill
Wal-Mart Stores, Inc. (2015). Wal-Mart Stores, Inc.
MarketLine Company Profile, 1-43.
Wal-Mart Stores, Inc. SWOT Analysis. (2014). Wal-Mart Stores,
Inc. SWOT Analysis, 1-11
Lan L, Kannan P, Ratchford B. New Product Development Under
Channel Acceptance. Marketing Science [serial online]. March
2007;26(2):149-163. Available from: Business Source Complete,
Ipswich, MA. Accessed January 13, 2016.
Study Finds Walmart Is Price Leader. (2015). MMR, 32(16), 51.
Notes de l'éditeur
Wal-Mart US Segment-operates in 4 separate retail formats running a total of 470 discount stores, 3,407 supercenters, 639 vicinity markets and other small format stores. Also sells products via electronic commerce website
Wal-Mart International- operates in 26 countries in various formats including Canada, Germany, Africa etc
Sam’s Club- has warehouse clubs for retailers in Puerto Rico and 48 other states in US. Also sells merchandise via retail website
In the ever changing dynamic business environment its critical for organizations to develop strong monitoring and evaluation systems in the quest for its growth and profitability especially as pertains Political, Economic, Socio-cultural and Technological factors i.e. “PEST”
PEST analysis is useful for organizational heads to decide on important factors to consider strategic growth of the company but also identify crucial likely hurdles and ways to overcome them as in this case applies to Wal-Mart.
Knowing one target market is an important aspect in a marketing plan as it helps organizations know which products and services belong to which specific types of consumers
Wal-Mart’s huge presence in the market and its variety of products enables it to change its products easily keeping up with constantly changing consumer tastes and preferences
Wal-Mart strengths enable it pursue its goals through increasing economic returns as well as to keep securing and increasing its already substantial customer base market share
Threats and weaknesses are indicative of the aspects that need to addressed as they present risks to company's growth and profitability due to damage to organizations image and brand, heavy fines and penalties for violation, employee migration to competitor firms, heavy payments toward employees suits and cases among other things
Opportunities present platforms for growth, investment, innovations beneficial to achieving the objectives of the organization and maintaining its status as the leading retailer giant it is
Increase in Wal-Mart's projected investment was due to venturing in e-retailing /e- commerce and multiple opening of small format stores
The Sam’s Club warehousing competes directly with BJ’s and Costco and Target at the retailing section
Wal-Mart’s distribution strategy allows it nearly 85% distribution of all its merchandise from the different suppliers and manufacturers.
As a discount retailer store, Wal-Mart seeks to bypass the regular players existing between its manufacturers/suppliers and end consumers as a way to reduce its operational costs and in turn achieve low product prices.