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Name Walmart Inc. Industry Retail Founded 1962 Headquarter Bentonville, Arkansas, the United States CEO Douglas McMillon (since February 1st, 2014) Revenue: USD 523.96 billion (fiscal 2020 ended on January 31st, 2020) Profit: USD 14.27 billion (2.7% net margin) Competitors: Costco Wholesale, Dollar General Corp., Target Corp., Dollar Tree Inc., BJ Wholesale Club, Five Below Inc. Company Overview Walmart operates discount stores, hypermarkets, and neighborhood markets. The company sells apparel, houseware, small appliances, electronic, musical instruments, books, home improvement, shoes, jewelry, games, household essential, pharmaceutical products, and automotive tools. Walmart is the world’s number one retailer and the world’s largest company by revenue and employee with 2.2 million associates. Walmart has 5,400 locations in the U.S, including 4,800 Walmart stores and 600 Sam’s Club warehouse clubs. Walmart has 6,000 locations outside of the U.S, which span across Asia, Africa, Europe, and Latin America. It is the number one retailer in Canada and Mexico. Today we will go over an analysis of the companies key strengths, weaknesses, threats and opportunities Walmart Strengths 2021: Various retail channels/formats to serve different types of customers’ needs. Walmart operates through three segments: Walmart U.S, Walmart International, and Sam’s Club. Walmart U.S offers customers multiple store formats: discount store, supercenter, and neighborhood market. The differences between them are while discount stores only sell general merchandise in rural areas, supercenters offer a larger selection of both general merchandise and groceries, and they are often located in more populated parts of the country. Apart from brick and mortar locations, Walmart U.S also operates Walmart.com, other e-commerce websites, and mobile apps to sell its own merchandise as well as third-party sellers items (similar to that of Amazon). The company offers a delivery service for online orders of groceries in the U.S with a fixed subscription fee. For customers who prefer bulk buying, there are Sam’s Club stores to satisfy that needs, however, membership is required to enter and make purchases. Strong international presentation. More than half of Walmart’s stores are located outside of the U.S. Mexico is the first and largest international market for Walmart with more than 2,300 locations and represents about 40% of total international units. Other major foreign markets include Canada, the U.K, Argentina, Brazil, Chile, China, India, Japan, Africa, and Central America. In the U.K, Walmart owns one of the “big four” supermarkets, Asda.The solid growth trend in revenue. Over the past five years since fiscal 2015, the company’s sales have risen 6% and only took a small dip in 2016 due to fluctuation in exchange rates, and low global oil price impacted fuel sales. The growth was powered by higher e-commerce sales, higher fuel sales, and increased store traffic. Its free cash flow at the end of fiscal 2019 was USD 7.8 billion, an increase of USD 742 million from the prior year. Walmart Weaknesses 2021: Failure in some markets due to lack of due diligence prior to entering. In 2006, Walmart officially withdrew from the South Korean market, joined a long list of reputable firms that experience the same fate in this market. Walmart failed to understand the shopping reference of South Korean customers, as well as adjust its business model to the domestic culture. (Franco Gandolfi, 2009) There were mistakes in distribution, location, product mix, and marketing that offering low prices – Walmart’s predominant strategy – was not enough to be successful in South Korea. For example, most Walmart in Korea was located in the suburbs, but Korean customers preferred easily accessible shopping locations without driving far. Many Korean shoppers, especially ladies, did not shop at Walmart because they did not like how the stores were set up – similar to a warehouse and lacked eye-catching displays. In addition, Korean customers shop more frequently than their Western counterparts, therefore they prefer to go to smaller stores that offer local products rather than a massive floor at Walmart that only sells Western food and drinks. Despite constant growth in sales, net income has been taken the opposite path. Net income keeps on falling in recent years, including fiscal 2019 where it fell a third to USD 6.7 billion. Further back, in fiscal 2018, there was a 25% drop when Walmart included a loss of USD 3 billion on the extinguishment of debt. Operating and general expenses have been taken a larger share of net sales every year. The company also recorded USD 8.4 billion other losses in 2019, mainly due to the divesture of 80% of Walmart Brazil. Walmart Opportunities 2021: Integration of physical stores and digital channels for a seamless shopping experience. At the moment, Walmart’s plan for new store opening is much lower than in the past year and instead, the company is focusing on improving its e-commerce channel, technology, and store remodels to complement online order pickups. More e-commerce fulfillment centers are added domestically and internationally in the hope of taking on the giant Amazon. Walmart has the advantage of a network of physical stores that allow customers who order online can come in and pick their items up at the earliest convenience, especially groceries, as opposed to waiting for items to be shipped. If Walmart can leverage this advantage, Amazon would be the one who plays catch-up. Taking ownership of the grocery-delivery network. Being independent of third-party delivery services, such as Instacart, means that Walmart would be able to incentivize drivers and optimize its operation so that the network is seamlessly integrated into the company’s e-commerce platform. By doing so, Walmart could gain advantages over retailers that depend on such outside partnerships. At the moment, Walmart is testing out self-delivery with its Spark platform and use current employees to deliver orders. Changing product mix offered on e-commerce platforms to increase margin. Online grocery is growing and it is a meaningful contributor to overall online sales gains, however, margin from the grocery is very low and should be offset by higher-margin items. A better assortment of merchandise on Walmart’s website to include brands that are popular among customers is critical to raise online sales and repeat visits. Walmart Threats 2021: Growing complications in international markets might need new exit strategies. Asda, Walmart’s subsidiary in the U.K, has exhibited slow growth and Walmart has not been able to get rid of it. Similarly, Massmart, the South African retailer controlled by Walmart, also faces weak sales and low profit, which brings up the question of whether Walmart needs an exit strategy for this market as well. Lower prices for petroleum products can affect total revenue. The crude oil price has taken a big dip in the first half of 2020 due to a reduction in travel and production activities, thus it is expected to stay low for the rest of the year. Since Walmart also sells fuel, this adversity will hurt total sales for the upcoming fiscal. Walmart SWOT Analysis Conclusion: Despite an unfavorable result in earnings during recent years, Walmart is still the number one retailer in the world. The company surpasses other large competitors, such as Target, by combining its e-commerce platforms and the network of 5,400 stores in the U.S alone. Walmart’s growth plan is to concentrate on developing its e-commerce channel by investing in technology and restructure its supply chain so that online orders are well-taken care of. With this strategy, Walmart hopes to go toe-to-toe with Amazon, and it will be an interesting competition to watch. If you are stuck with a project, our Done for you Services are for you.You can also find a SWOT blank template here References Bartashus, J. (2020). Walmart Research. Bloomberg Intelligence. Franco Gandolfi, P. S. (2009, 3). Retail Internationalization: Gaining Insights from the Wal-Mart Experience in South Korea. pp. 187-199. Walmart Inc. (2020). Annual Report 2020.

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