The paper "Critical Analysis of Wal-Mart" is an outstanding example of a business case study. This paper critically analyzes Wal-Mart which is considered the biggest employer globally. Wal-Mart is a multinational retailer running large discount stores and warehouses and has been in operation for more than fifty years. The company’ s sales revenue is over 400 billion annually and is among the most valuable companies globally. The company fares better than its competitors including Target, Sears, and Home Depot among others. In conducting the analysis, the paper starts with an analysis of the company’ s internal environment within which the company operates.
In this regard, the company’ s internal strengths, opportunities, threats and weakness have been analyzed (Wendell, 2006). The analysis then focuses on the external environment where a PESTLE analysis has been carried out before conducting a five forces analysis. The results of the analysis portray a strong company that has a lot of opportunities at its disposal. It is thus hoped that if the company can take advantage of these opportunities, it will be a stronger company in future and hence a good investment option. Critical analysis of Walmart SWOT Analysis Strengths -Scale of operations -high competence in information systems -it offers a wide range of products -it adopts a cost leadership strategy -it has an international scale of operations Weaknesses -the company faces negative publicity -the company has little differentiation -Its strategy can easily be copied -it is faced with high employee turnover and labour-related cases Opportunities -expanding into emerging markets -investing in own-label products -healthy eating products -invest in online shopping Threats -Increased competition -rising commodity prices -increased resistance in indigenous markets The above SWOT analysis has been explained below; Strengths One of the major strengths of Wal-Mart is its scale of operations.
It is the largest retailer globally having made more than $400 billion in revenue in 2016 while having 11,545 stores.
Thus, owing to its large scale of operations, Walmart is able to exercise strong buyer power on suppliers so they can reduce prices (Hyde, 2015). This also allows it to achieve higher economies of scale compared to its competitors. This results in lower prices to its customers which is its major strength. Another strength lies in Wal-Mart’ s competence in information systems. This helps it achieve significant cost savings as its information systems are able to track various types of operational information in real-time.
This results in ineffective management of its logistics and supply chain which is a vital factor for its success. Another strength is that it offers a wide range of products than its competitors. This helps it attract more customers to its stores. The company also adopts a cost leadership strategy hence being able to attract more customers by selling its products at lower prices. Another strength lies in its international operations thus diversifying its income sources. Weaknesses Walmart has a few weaknesses. Owing to its large labor force of more than 2 million people, Walmart faces many labour-related disputes and hence lawsuits annually costing it millions of dollars.
The company has also been accused of poor work conditions which result in reduced employee morale and hence high turnover. Thus, the company incurs a lot of costs in training new employees while this also has a negative effect on its reputation (Michelle, 2012). Another weakness is Wal-Mart’ s little differentiation compared to its competitors. This is a threat to the company’ s future were commodity prices or consumer incomes to increase.
This would affect its low-cost leadership strategy hence eroding its main competitive advantage. The company also suffers from negative publicity owing to its questionable practices including bribery and poor working conditions thus damaging corporate reputation.
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