Prepare Analysis Paper of Walmart Retailing Company (Research Paper Sample)

Analysis of Walmart Retailing Company
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Executive summary
Walmart is world leading retailer that has largely ventured to online retail market to stay afloat. With experience, trial and error the company grown to world’s largest regarding revenue depending on profit margins. The company has advantages, opportunities, and threats that may influence its productivity in the next decade. This analysis will explore Walmart's economic state, operation ad its competitiveness. From the literary source, it is construed that despite forces from competition and dynamics of the market, the company can remain world leader. The green revolution is the greatest threat to the company. Consumers are becoming more sensitive to companies practices (relating climate change) and switching to green supply chain management system may be unsustainably expensive.
History and background
As of 2014, Walmart was the largest company in the world by revenue (Hwang & Park, 2015). It is a multinational retailer that operates a grocery store, hypermarkets and discount stores across 28 countries. The company’s headquarters is in Bentonville Arkansas. Sam Walton founded Walmart in 1962. The company was incorporated in 1969. Since incorporation, the companies as remained competitive and had managed to grow to be the world’s largest retailer whose outlets span across the globin physical stores and online markets. The company has earned its reputation across the globe by being the largest single employer having over 2.2 workers on their payroll. Walmart also owns and operates Sam clubs.
Walmart global venture as been rather successful except entry to South Korea and Germany. The company has acquired other retailing companies like the branches of Ben Franklin. To stay afloat, the company was obliged to find low-cost supplies and offer products with low prices and focus on the volume of sales. From the success of the Ben Franklin branch, the company saw much sense in a discount store and opened the first discount store in Rogers Arkansas. The store was a success, and the company expanded its sales and profit year after year. Now that the company’s reputation was spanning across the country in the 80s they announced a citizenship move to improve energy efficiency and cut greenhouse gas by 20% in 7 yeas (Brea‐Solís, Casadesus‐Masanell, & Grifell‐Tatjé, 2015).
Vision statement; To be the best retailer to our esteemed consumers and employees
Mission Statement; Saving money for better lifestyle
Operations (product and service)
Walmart operations are divided into four autonomous sections; Sam’s clubs, Global e-comers, Walmart US and Walmart International. The four divisions allow the firm to offer varying formats of details like the supercenters, warehouse club, hypermarkets, supermarkets and online retail markets. Walmart operations are indented to give the maximum consumer convenience without unnecessarily increasing the cost of operations. Each division has its targeted segment that it focuses to supply goods conveniently on the go. Walmart understands the dynamics of the market as well as the change of customers’ change in test and preferences and their products and developed and changed to suit such dynamics. The objective of Walmart is to offer quality goods at a low price to a large market (Calton, 2015).
SWOT analysis
Strength
Walmart is a capital-intensive company that can access funds for expansion and improvement of its supply chain management system. Most companies that compete with Walmart in the market do not have the kind of capital Walmart has, and Walmart can use mechanization of supply chain system to reduce the cost of the product to the level that competitors cannot sustainably match.
Walmart has a multinational presence which enables it to absorb considerable economic shock in one specific country. If one country is in crisis and the government resort to hiking taxes hence lowering people purchasing power, Walmart's performance in that country will not be optimal, and gains from other countries may be used resultant caution losses.
Walmart is widely known and trusted brand across many nations. This gives the company quick acceptance in new territories and when introducing new brands. Other strengths of the company include its strategic locations, many years of experience and in the retail market and access to relevant technology. Walmart also has developed a very efficient supply chain system that enables it to offer products at a minimal cost.
Weaknesses
Walmart’s operates on a very small profit margin and should hold and sell very high volumes to make reasonable profits. Holding high volume of commodities increases the risk, and the company will go to a big loss if when there is an abrupt event that affects the saleability of the product.
Walmart's business model is not creative and uses a conventional approach that any organization can replicate. Improving stability and economic status of nations in which Walmart is operating from means the rise of retail companies willing to adopt cost leading strategies, and this may mean a very competitive future for Walmart.
Opportunity
Expansion; Walmart can access capital and can, therefore, expand its business to other stable countries and rise economic regions.
Human capital; to safeguard itself concerning the trends in human capital, Walmart has resources and should invest in developing human capital that will be needed for future practices. If the company can anticipate the type of human resource that will be needed in the future, it can develop young people skill wise to match such anticipated trends.
Health lifestyle; the company can match consumers’ desire for health conscious products. This will expand the market base and keep customers who are about to defect from Walmart's products on grounds of health matters
Threats
The rise of aggressive competition; the rise of disposable personal income has worked well for the company, but the same trend is about to push the company to the brink of unprofitability. More business is starting especially in the US, and somehow this new company can procure low-cost supplies and can easily match Walmart's "low prices." There is also the rise of online retail giants like the Amazon and Alibaba that is taking the market by storm in a trendy way.
The rise of health concerns; costumes are both dynamic and hardly predictable when it comes to taste and preferences. Due to the rise of medical complication that is quickly associated with food, Walmart's food from grocery units are being rebranded to be cheap and unhealthy. Heath conscious food is trends that will force Walmart to adopt it lose a considerable market share.
The green revolution luckily does affect not only walmart but also all its competitor but whoever comes out first and adopts green supply chain will reap more benefits. Companies that do not use price to compete are better placed than Walmart. Adopting a green supply chain management may translate to a higher cost of operation and Walmart will be disadvanced.
Profit strategies employed by Wal-Mart
Walmart highly depends 0n volumes to make profits since the price is a factor in which the company uses to position its products in the market. Despite having a very low-profit margin, the company can sell large volumes which translate the low-profit margins into large profit margins. Cost leadership strategy has proven effective for the company for a very long time and through this strategy, the firm has managed to generate world’s largest profit.
Consumer’s consumption patterns
Increasing diet-related diseases has led to a dynamic shift in consumers’ taste and preference. Walmart uses the classical business model to ensure that profit is earned, but this method may not be effective shortly. Climatic and health matters have led to consumer sensitivity to the practices of the retailer. The consumer today is not only concerned with the price but also the environmental consciousness of the business and health aspects of the food being sold. Most of the goods sold by Walmart are sensitive to price and their supplements possibly exist elsewhere. Companies should, therefore, engage in environmentally friendly practices and produce health products but all at a reasonable cost because the competition is still mainly based on pricing (Alizadeh, Goldsmith, & Scaglione, 2015).
Competitive analysis
Stiff competitions have faced Walmart, but it has for a very long time remained to be the leading retailer in the world because of its access to capital and its worldwide recognizable brand. Competition is stiffening, and the company is trying to stay afloat by mechanizing its supply chain management system and coping with market dynamics. Walmart uses price to position its product in the market, and its product should, therefore, be the cheapest. This way of competition may not be sustainable in the long run for the company and it is therefore gradually switching to saving catcher, a lot of newly started stores are beginning to merge Walmart prices and the company has resorted to offering customers opportunities to save some m0oney whenever they buy from their stores. Savings Catcher program cannot be sustainably rolled out across all Walmart stores, and the company, therefore, runs savings catcher programs in 500 undisclosed locations.
Companies venture into an online retailing promise to be a success, but the entry of retail giants that specialize in this platform like Alibaba and Amazon have made th...