The Best of Wal-Mart
The Best of Wal-Mart
The Best of Wal-Mart
Wal-Mart (Wal-Mart Stores) is the global largest retail company with a sturdy market position in the United States. It derives 75% of its total revenues from the United States. This enormous percentage of revenue has made it one of the global leading retail companies. Its sturdy market position in United States offers economies of scale, thereby enhancing the brand image of the corporation. It as well enables Wal-Mart to infiltrate the market successful, thus serving a broader array of customers. However, Wal-Mart faces an unbendable competition in the business from other competitors, such as Costco, Sears Holdings, and Target. This determined competition could unfavorably, adversely, and negatively affect the profitability as well as revenues of this retail company (Lynn 1).
SWOT Analysis of Wal-Mart
Strengths
Weakness
- Balanced brand mixing.
-Sturdy marketing ability.
-Sturdy market position in United States
-Exit of German and South-Korea markets.
-Product recall
-Several legal issues
Opportunities
Threats
-United States health care spending.
-Growing online sales.
-Increasing store network.
-Expanding brand portfolio.
- Stiff competition.
-Resistance and opposition from communities.
-Influences of sub prime crisis.
Strengths
This company has got a balanced branding mix, including external labels and private brands. Wal-Mart sells goods under its private label brands like Great value, Sam's choice, Everstart, and Kid connection. It also stocks prominent brands. in addition, it sells goods under licensed brands comprising Disney, Mary Kate, and Ashey. This balanced branding mix permits Wal-Mart to offer greater preference to customer, thereby encouraging customer loyalty. Its sturdy market position in the United States is making the company to be among the leading retail companies in the world today. On the strong marketing ability, Wal-Mart utilizes a number of programs designed with a solitary aim of meeting the competitive market advantage in the retail industry. The programs comprise Rollbacks, Daily low prices, and store within a store. Such sturdy marketing abilities of Wal-Mart provide both value and service to customers, thus sustaining its competitive advantage in the industry (Barbaro1).
Weaknesses
The exit of German and South-Korea in 2007 has cost the company. It was incapable of catering for the tastes of South-Korean customers. Wal-Mart was very slow in opening up retail outlets in South Korea and this made it to fail in wining the bargaining power of consumers. Product recall is another weakness Wal-Mart company is facing, some of the products of this company were posing risk to the consumers and they were to be recalled. Some of the products contained elevated levels of lead metal that could have been noxious to consumers' health. This recurrent product recall show negligent quality control procedures, and this could harm the consumers' view regarding the company, resulting into reduced number of customers. Numerous legal issues is yet another drawback of this company, it has been accused of violating laws, for example in California Wal-Mart was accused of going against the labor laws with respect to stipulation of meal breaks to workers working more than six hours in a shift. The unfavorable results from such accusations could impact negatively on the company's image as well as additional expenditure, thereby bringing more pressure on the company (Buckley et al 1).
Opportunities
Expanding of brand collection, portfolio, or range benefits the Wal-Mart in gaining privileged margins. The company could also influence rising in healthcare expenditure in the United States, thus boosting revenues of its health clinics and pharmacies. The company is well balanced to gain from the probable increase in online sales. The last opportunity for Wal-Mart is an increase in store network. This would result into an increase in customer stores and subsequent increase in revenues collection by the company.
Threats
The intense competition Wal-Mart is facing could unfavorably impact on its profitability as well as revenues. Rising of resistance to latest stores from domestic communities along with entrance into global markets is expected to retard the company's extension strategies.
Market Mix
In attempts to build its brand image, Wal-Mart has extended and introduced superior merchandise and apparel. Most especially, in the last year (2008) the company has run advertisement campaigns in Vogue magazine as well as emphasizing its trademarks in television adverts, that linked to the company's low mantra price. The advertising of both online and offline are very significant to the company's profit base. The website launch seeks to serve its customers in a manner they desire to be served and where they desire to be served. The struggle for Wal-Mart to integrate offline stores along with online storefront hopes to put the company as ecommerce for several customers. The locations of Wal-Mart stores make people or customers feel more expedient, the programs of low price strategies, and extension in their brand mix have reinforced the marketing mix of this company to level that other competitors are finding it hard to compete with the company (Buckley et al 1).
Ethical Issues Wal-Mart Faces
The company is currently facing a number of ethical criticisms by various individuals and groups. Community groups, labor unions, religious organizations, grassroots organizations, and environmental organization protest against the company's business practices and policies. Other criticism areas comprise company's foreign product sourcing, treatment of product suppliers, the Wal-Mart security policies, and environmental practices. The company is facing a lot of criticism regarding the, the wages, working conditions of workers, utilization of illegal workers as well as child labor violation. The company has been hiring low skilled workers since its inception thus offering them low wages contrary to the existing United States labor laws. It has also been accused for poor working condition for its employees, for instance some workers were required to work off the clock. The company was also implicated in the violation of child labor laws, where minors were found working for several hours in the company. It has also been blamed of permitting the illegitimate immigrants to be employed in the company (Barbaro 1).
Wal-Mart Involvement in Social Responsibility
Medicare, food stamps, and subsidized housing are among the social assistance programs of Wal-Mart to its workers. The company is trying to improve on its social image in the United States. It has major expansion strategies in the majority populous states in the United States, and it's currently spending millions of dollars on television adverts to be promoted as a worker friendly company. Yes Wal-Mart Corporation has an ethical policy which includes three basic beliefs of respect for people, service to customers, and strives for excellence. The company ensures that each an every associate of the company follows the policy and that violation or deviation from the necessities of the ethical policy results into proper disciplinary actions including termination of such an individual (Barbaro 1).
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