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Wal-Mart Stores (SWOT Analysis)

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“SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used technique through which managers create a quick overview of a company’s strategic situation. The technique is based on the assumption that an effective strategy derives from a sound “fit” between a firm’s internal resources (strengths and weaknesses) and its external situation (opportunities and threats). A good fit maximizes a firm’s strengths and opportunities and minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful implications for the design of a successful strategy.” 

Wal-Mart Stores 

Wal-Mart Stores (Wal-Mart) is the largest retail company in the world with a strong market position in the US. The company derives almost 75% of its revenues from the US. Revenues from the US are largely instrumental in making Wal-Mart one of the leading corporations of the world. The company advanced its position in the Fortune 500 ranking from the second largest company (2006) to the largest company (2007) in the world in terms of revenues. The company’s strong market position inthe US provides economies of scale and enhances the brand image to the company. It also enables the company to penetrate the market more effectively and serve a wider range of customers. However, the company faces stiff competition in the industry from players like Target, Costco and Sears Holdings. Intense competition could adversely affect the revenues and profitability of Wal-Mart.


Strengths, Weaknesses, Opportunities and Threats (SWOT)

 

Location of Factor

TYPE OF FACTOR

Favorable

Unfavorable

Internal

Strengths

  • Strong market position in the US
  • Balanced brand mix
  • Strong marketing capabilities

Weaknesses

  • Exit from South-Korean and German Markets
  • Product recall
  • Numerous legal issues

External

Opportunities

  • Expanding brand portfolio
  • Rising US healthcare spending
  • Increasing online sales
  • Increasing store network

Threats

  • Intense competition
  • Opposition and resistance from communities
  • Affects of the sub prime crisis
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