Running Head: WALMART’S SWOT ANALYSIS 1

Walmart’s SWOT Analysis

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Walmart’s SWOT Analysis

Walmart Stores Inc. is a multinational firm in the United States specializing in mass

merchandise selling. It is one of the global Goliaths that has remained at the top of the Fortune

500 list for the tenth straight year, raking more than 570 billion in profits. Walmart successfully

weathered a tough 2021, with sales increasing by 2.4 percent and profitability increasing by 1.2

percent. This success can be attributed in part to the company’s e-commerce capabilities. Such

competitive benefits are utilized to offset the impacts of rival merchants and digital content

delivery companies. In Walmart’s context, the SWOT analysis offers data regarding internal and

external factors that are significant in forming the firm’s growth plan. Whereas such

variables vary from time to time, the firm’s capability to control its general merchandise activity

performance and powers are vital to its achievement. Still, despite the firm’s faults, its

general strength is significantly more essential. Walmart Company may use these benefits to

capitalize on consumer industry possibilities. The firm may also exploit its capabilities to combat

threats to its consumer industry, predominantly the firm’s e-commerce undertakings. Operational

strategies aligned on its SWOT features are vital in assuring Walmart’s profitability,

competitiveness, and continuing dominance as the world’s largest retailer.

SWOT Analysis (Diagram)

Table 1: Walmart’s SWOT Analysis

Walmart’s SWOT Analysis

Strength Weaknesses

 Operational scale  Little differentiation

 Information system competence  Increased employee turnover
 Great products range  Labor-related lawsuits
 High Supply chain efficiency  Bad publicity
 Proper cost leadership strategy
 Global operations
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Opportunities Threats

 Healthy eating trends  Raising competition from online and

 Increased online shopping brick-and-mortar entrants
 Increased product acceptance  Raising opposition from local
 Retail market evolution in developing communities
markets  Increased commodity prices
Source: Author’s Illustration

Walmart Company’s SWOT analysis reveals the advantages of its strategic and efficient market

model. The report also highlights Walmart’s shortcomings in preserving tight profit margins,

frequently resulting in poor employee compensation. Furthermore, it emphasizes the firm’s

prospects in emerging economies and the e-commerce industry in the face of intense competition

and opposition risks.

How Internal Factors Support Competitive Advantage

Walmart Company’s strengths are all proportional to its operational scale. Despite its

disadvantages as a low-cost vendor, the firm’s competitive advantages allow it to survive threats.

Walmart’s capabilities in leveraging worldwide expansion prospects include global

organizational scale, international supply chain, and high-cost competitiveness (Ofori-Nyarko,

Wang & Annoh, 2020). Moreover, According to Ofori-Nyarko, Wang and Annoh (2020),

Walmart’s worldwide organizational structure provides the company with substantial finances

for development and expansion. In addition, the company’s access to natural resources protects

businesses against market-specific threats such as interruptions in local distribution networks

(Jurevicius, 2021). Furthermore, Davis (2022) reveals that Walmart’s supply chain is very

efficient due to improved technologies for controlling and measuring product movement from

vendors to shops. Walmart also has a resource management system in place to ensure its success.

Walmart specializes in establishing and maintaining an employee team which enables the

company to achieve its goal and vision, owing to its dependence on its workers (Smithson,
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2018). Such organizational and commercial characteristics give a competitive edge in this

SWOT analysis, particularly versus smaller merchants.

How External Factors Support Competitive Advantage

Walmart’s opportunities are primarily focused on growth and strengthening business

operations. These possibilities are intertwined with the global economic climate. Furthermore,

the company’s human resource condition provides possibilities for the company to develop.

Walmart’s capability to scale in developing nations is reliant on on its rapid financial growth.

Smithson (2018) asserts that Walmart’s prospective to increase performance levels answers

clients’ doubts about the health-related costs of buying low-cost, often low-quality

products. Also, Walmart Company leverages information technologies, distribution

infrastructure, and personnel talents and competencies to optimize consumer happiness

(Smithson, 2018). Due to its vast information system for handling sales, stock rates, and other

relevant data in actual time, the corporation obtains significant cost savings (Smithson, 2018).

Thus, efficient logistics management is among the most crucial aspects of Walmart’s

achievement.

The recovery of the United States after the COVID-19 epidemic is a well-known

economic trend. Throughout this period, Wal-Mart had to adapt and introduce additional

curbside pickup (Taylor, 2022). According to Taylor (2022), Walmart had launched the idea

some few years ago, though it was not well received until the epidemic struck. Sales grew since

it was a more convenient way for customers to collect their food while staying safe. Furthermore,

because Wal-Mart sells vital commodities, many individuals were recruited or gained over time

during the epidemic (Taylor, 2022). Given the political and legal context, Davis (2022)

highlights that Walmart has no trouble dealing with its domestic operations. Labor regulations
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remain beneficial for the work that Wal-Mart provides to its staff. Notably, some opposition

from non-rural areas may oppose Wal-Mart establishing a store in their community (Ofori-

Nyarko, Wang & Annoh, 2020). Internationally, Wal-Mart is perplexed by the notion that

regulations in other nations vary from those in the United States, and not all regulations are

tailored to accommodate Wal-Mart (Song, 2018). Thus, Wal-Mart is adjusting swiftly. The

company’s success in China demonstrates that non-democratic regimes may provide a conducive

environment for its spread.

How the Firm Has Retained Competitive Advantage

Wal-Mart has successfully maintained its global leadership position in department stores

based on several aspects. For instance, it thoroughly evaluates its internal and external

environments, optimizes its strengths, weaknesses, risks and opportunities, and carefully

integrates its strategic capabilities, resources, and competence by employing proper generic

business-level plans to promote competitive advantage over a reasonable period. So, by

adequately maximizing its resources, key competencies, and abilities, Wal-Mart turns threats into

opportunities. Furthermore, broad environmental pressures generate dangers that Wal-Mart

translates into opportunities and exploits to gain a competitive edge. Wal-Mart sees the potential

that lies in major cities, smaller towns, and worldwide markets by responding by establishing

superstores and discount shops and local marketplaces. Thus, resources are the origins of a

company’s abilities, spanning a range of individual, societal, and institutional phenomena that do

not generate a competitive edge on their own but when recognized and adequately integrated.
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References

Davis, A. (2022). Walmart SWOT Analysis 2022: A Detailed Report! | SWOT Hub. Retrieved

30 June 2022, from https://swothub.com/walmart-swot-analysis/

Jurevicius, O. (2021). Walmart SWOT Analysis (5 Key Strengths in 2021). Retrieved 30 June

2022, from https://strategicmanagementinsight.com/swot-analyses/walmart-swot-

analysis/

Ofori-Nyarko, N. S., Wang, F., & Annoh, W. O. (2020). SWOT ANALYSIS: WAL-MART

STORES INC.

Smithson, N. (2018). Walmart SWOT analysis & recommendations.

Song, X. (2018, June). A study on management model of human resources in multinational

companies based on cultural differences--taking Walmart as an example. In 2018

International Conference on Sports, Arts, Education and Management Engineering

(SAEME 2018) (pp. 292-295). Atlantis Press.

Taylor, J. B. (2022). The Effect of the COVID-19 Pandemic on Online Shopping at a Traditional

Ground Retailer: Walmart, Inc from the Customer Perspective (Doctoral dissertation,

Trident University International).

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