Walmart Swot Analysis Paper

Wal-Mart follows the everyday low prices “EDLP” strategy, which proved to be one of the most successful pricing strategies. Wal-Mart achieves that through an efficient supply chain management that tracks all goods from manufacturers to suppliers to end customers. LU, C. (2014)

In retail business, demand elasticity is different as there are combinations of goods presented. Nevertheless, Wal-Mart’s elasticity of demand is considered low and sometimes close to inelastic. According to “making change at Wal-Mart” in 2012, when income falls or even currency weakens, revenues increase at Wal-Mart. This is because people in such times demand cheaper goods and basically it is always available at Wal-Mart. In addition to that, Wal-Mart launches constant price wars to dominate the business, where suppliers are

always competing to supply them with the lowest offers and prices; this will enable Wal-Mart to pass the low prices onto the customers. Layne, N. (2014)

Wal-Mart is implementing differentiation by meeting customers’ needs in opening express stores and introducing new neighborhood markets in certain urban areas. These markets are smaller in size and aimed for quick suitable grocery shopping at efficient pricing, with no hidden costs or charges. Johansson, B (2012)
Wal-Mart also offers free refunds for damaged items or unsatisfactory customer goods, which leads to high scores on customer services. They also offer constant developments in self-service checkouts (Fast track) and enhance their e-commerce sales to make it easier for customers to shop. Not to forget, that Wal-Mart stores especially Sam’s Club offer loyalty programs where customers can earn points from shopping. With these points the customers get free dollars or special discounts on selective items from their stores Layne, N. (2014). Good services and loyalty programs, gives Wal-Mart a huge competitive advantage. Above all of that, the huge retailer is launching the new service Wal-Mart-to-Wal-Mart money transfer service. Starting with an aggressive pricing strategy and already affecting MoneyGram massively. Brewer, R (2014)

Wal-Mart is focusing on making shopping a pleasure for different types of consumers through reaching all their needs. Customers with little to average income are their main market niche due to the incredible low prices they offer. Customers relying on the e-commerce through Wal-Mart.com are another niche type. Customers relying on fast and cheap glossary shopping through the neighborhood markets is also another segment to consider. Garcia, D (2012)
Furthermore, the expansion in under banked areas through the Wal-Mart-to-Wal-Mart service gives a potential growth in the niche of people that has no access to banking facilities. Brewer, R (2014)
To reach their market niche Wal-Mart focus on easier shopping for customers and more time-efficient, along with the cheapest prices possible.

Wal-Mart concentrates on acquisitions or link joint ventures with local or overseas retailers to expand their business and boost their profits. The benefits are huge in terms of infrastructure costs and low risk. In 1999, Wal-Mart acquired ASDA of UK and has grown significantly to become the second largest in the country. CoroporateWatch (2015)
It has also created an alliance with Bharti in India in 2009 but eventually separated due to legal limitations. As for South American countries, Wal-Mart acquired D&S in Chile, owning more than 75% of its shares in 2009. In Asia and although suffering continuous losses, the giant American retailer raised the bars and made Seiyu the Japanese supermarkets a completely owned subsidiary in June 2008. Boyle, M (2009)
Starting in 2011, the company through its @WalmartLabs acquired several tech companies such as Stylr the mobile app, Adchemy the online product search company and lately in 2014 Luvocracy to develop its global technology platform. Cheng, A (2014)

Saturation in local markets leading to slowed growth is the main reason for Wal-Mart to expand overseas. As CEO McMillon puts it, Wal-Mart is advancing from a local business with international sector to being a global company. Boyle, M (2009)
With globalization trends kicking in, Wal-Mart saw opportunity and wanted to increase and gain market shares in the “ripe and wide open” market.
Starting with the America’s, Mexico’s Walmex has approximately 2,245 retail shops in the market, which makes it the largest international market for the huge retailer Wal-Mart.

Another priority market is Wal-Mart Canada, with 392 stores around.

Moving to Asia, Wal-Mart break with the Indian giant Bharti Group made them in charge of the wholesale business where foreign retailers may invest freely and left them with around 30 small operating stores in the country. Moreover, Wal-Mart is also targeting China with 400 stores, in an opportunity to increase their growth in sale. Trefis Team (2015)

By building international reach; Wal-Mart would gain economies of scale, which increase the ability to reduce prices to its customers. Furthermore, global suppliers would help the company facilitate the entry process into new markets by having the “wisdom and support” of an established presence in the market who know customer trends and market needs and specifications. Not to forget the advantage of e-commerce in breaking the international barriers and increasing sales, which is already happening in Mexico through kiosks, where consumers order online and pay/pick at the

stores.