Walmart swot analysis Summary

The ‘Fortune 500’ is a list of top 500 companies, with the highest gross revenue in the United States. The list is complied and published on an annual basis by the Fortune magazine, and it includes both publicly and privately held companies arranged in decreasing order of their gross revenue adjusted for excise taxes.

The Fortune 500 list was first was published in 1955, and originally included only manufacturing, mining, and energy industries, but now it has been extended to include service companies as well such as life insurance companies, commercial banks, retailers, transportation etc. One company that has been a consistent topper in the list of Fortune 500 is Wal-Mart. It was the largest company in 2007 and 2008, and again in 2010, 2011 and 2013.

(Fortune 500) The slogan of the company has been ‘Saving people money so they can live better’. The company believes that the strategy of “Every Day Low Cost” helps the people to save money, and enables them to enjoy a better standard of living. This in turn helps in conserving the environment, reducing hunger and poverty, empowering women and providing access to affordable food. The first Wal-Mart store was opened in 1962 in Rogers, Arkansas, by Sam Walton at only 44 years old. Mr. Sam, as he was popularly called, was born in 1918 in Kingfisher, Oklahoma. He initially opened a dime store in 1950.

The immediate success of the store inspired Sam to give greater opportunities and values to the customers, by opening the first store of Wal-Mart in 1962. At that time every one believed that the idea of offering excellent service combined with lower prices would not be successful and that a business could not be set up on this model. However, to everyone’s surprise, the company’s immediate success exceeded even Sam’s own expectations.

The company therefore went public in 1970. The proceeds from the sale of shares were then used to finance a steady expansion of the business. As the business grew, so did Sam’s aspirations. He brought new technologies of selling to retail business, and experimented with new formats of store such as the Wal-Mart Supercenter and Sam’s Club. Sam Walton also decided to go multinational by opening its first offshore store in Mexico. The company now has a presence in 27 countries with more than 10,800 retail units under 69 banners.

(Walmart Our Story) It was Sam’s commitment to service and to the ideology that “If we work together, we’ll lower the cost of living for everyone…[and] give the world an opportunity to see what it’s like to save and have a better life.” that earned him the Presidential Medal of Freedom, awarded by the then President George H. W. Bush in 1992. Although Sam Walton died in 1992, shortly after receiving the coveted Medal, his legacy of “saving people money so [that] they can live better”, is the driving force behind Wal-Mart, which has made the company a world leader in retail industry. SWOT Analysis

-Wal-Mart is bestowed with a number of strengths that has enabled it to become a consistent Fortune 500 topper. These include: 1. For 50 years consistently, Wal-Mart has not budged from its underlying strategy of helping people save money so that they can live better. Its everyday low price model is making a difference around the world by delivering strong growth, and high returns for its shareholders.

2. Another major strength is that the company has a special competence in the usage of information technology to back and support its international logistics system. It can therefore see how each individual product is performing world-wide, country-wide, and store-by-store at a mere glance. 3. The company also has a focused strategy in place for human resource management and development. Wal-Mart believes that people are the key to the success of its business. It therefore invests significant time and money in training and retaining them.

4. One more source of strength lies in the fact that Wal-Mart is committed to improving the communities and countries it serves along with expanding the business. For instance, in 2012, Wal-Mart and the Wal-Mart Foundation gave more than $1 billion in cash and in-kind contributions around the world, including $1 billion in cash and in-kind gifts in the United States and another $82.2 million in cash and in-kind gifts in the international markets. In addition, Wal-Mart, Sam’s Club and Logistics associates volunteered more than 2.2 million hours, generating $18 million to U.S. nonprofits.

5. The low price model of the Wal-Mart stores has helped it to weather the economic down turn storms. Even in recessionary times Wal-Mart has outperformed its peers as Wal-Mart’s size gives it the opportunity to reap economies of scale. 6. Wal-Mart has brought back their lay-a-way option for the holiday season, which brings in a lot more revenues. 7. Wal-Mart has updated their internet selling practices to make them more user-friendly and easy for shoppers. Included is their new site-to-store option and Home Free shipping

-Wal-Mart also has its weaknesses.1. Wal-Mart sells products across many sectors and industries (such as food clothing, stationary etc). It therefore does not have the flexibility of more focused competitors. 2. Wal-Mart has started facing stiff competition with stores such as Dollar stores which offer low prices to the customers without getting into the hassle of having to navigate through a super giant store. These stores have been able to find a small market.

They therefore have been able to compete successfully for home consumer sales. 3. Besides, there is a gradual spread of the concept of online shopping which avoids one with the hassle of making a trip to the market and buying in the pleasure of the comfort of one’s home. Also the availability of zero-percent financing is attracting people to opt for hire purchase than for cash down purchase at some super store. 4. Also, in order to keep their pricing down Wal-Mart needs to buy in large quantities. This implies that it carries large inventories.

5. Owing to the sheer size of Wal-Mart, people are not always able to find certain things that they need, and at times are forced to buy a much larger size than they actually need. 6. Wal-Mart tends to keep more part time employees than full timers, which hampers serious commitment. -Here are some of the opportunities that Wal-Mart has to offer.

1. To grow steadily and compete successfully, it needs to enter strategic alliances, take overs, mergers etc. with other global retail stores, by focusing on specific markets. 2. The Wal-Mart stores need to further diversify its area of operations into other unexplored territories around the world. There are tremendous opportunities for expansions in growing consumer markets.

-Below are the threats that Wal-Mart faces.1. Being number one implies that Wal-Mart is becoming the target of competition, both locally and globally. 2. Being a global retailerimplies that Wal-Mart is getting exposed to political oppositions and problems in the countries in which it operates.

Works Cited

Fortune 500. (n.d.). Retrieved 06 12, 2013, from CNN Money:

Walmart Our Story. (n.d.). Retrieved 06 12, 2013, from Walmart: