SWOT and PEST Analysis of Wal-Mart

SWOT and PEST Analysis of WalMart

WalMart is an international store that offers working families with products they require at prices which they can afford. In each of their worldwide markets, they make use of their strengths as a worldwide corporation to meet the regional needs of their consumers, and offer assistance for their communities. This paper discusses about the PEST (political, economic, social and technological) and SWOT (strength, weakness, opportunity and threat) analysis of Wal-Mart store.

 

 Strength

Wal-Mart is the largest wholesaler in the globe. It was ranked number one in 2011 by Fortune 500 and among the largest companies in America (DATAMONITOR, 2011). The wide spread of its operations is exceptional and there is no comparable competitor of such size. By it being a marketer controller, it is capable of replicating its best doings regularly on an unrivaled scale across the globe.

Wal-Mart stores provide a large variety of generally known products. Besides, it provides personal label retail across a number of categories, which comprise of entertainment, grocery, home wares and apparel. Its dominant position and the variety of products that it offers permit it to quickly vary the product. This enables it to meet the benefit and demand from increased trades. For instance, by shifting floor space share, Wal-Mart can gain from low-income customers’ growing wish for consumable staples as an alternative of discretionary items. This sort of flexibility and influence enables it to maintain its marketplace position.

Weaknesses

Wal-Mart is a big box vendor and runs supercenters which necessitate large area for every new stock. This limits its expansion in urban places where the space available is limited. Studies show that store sales at Wal-Mart in America have reduced for eight repeated quarters due to its market place space. Thus, it has become more crucial for Wal-Mart to come up with a new set up that accommodates its strengths and which is more apt to the urban areas. This is because its competitors like Costco and Tesco are also aiming to come up with new workable setups. Therefore, if they manage to be successful then Wal-Mart will have a competitive disadvantage.

Opportunities

Wal-Mart has been increasing its existence in a number of developing economies like Mexico, South Africa and Brazil. This is because in the near future, customers in developing economies would not manufacture most of the globe’s goods only but also purchase them. The increasing market trends in these economies can certainly impact Wal-Mart’s income growth.

Threats

There has been a high increase of employees which indicates a possibility of increase in pays and health care expenses. The labor expenses for corporations in the United States have been increasing as the health care charges and wages rose in the recent times. According to business estimates, health care prices for the US workers are estimated to rise by 8 percent in 2012 and 8.5 percent in 2012. The rise in medical charges continues to outdo inflation and pay rise (Big Lots).

One of the basic drivers that are likely to cause the rise in medical charges in 2012 is that, employees are worried about losing their works and possibly their health cover. Thus, they make use of their health care excessively while they still contain it.

Pest Analysis

PEST (Political, Economic, Social, and Technologic) analysis is an analysis which is applied to define the actions which are important and necessary to activate immediately in a company. PEST analysis also reveals the positive or negative effects of some  factors  to the business.

The continuously changing environment, technology, and competition forces Wal-Mart to think strategically and  make a quick decision.  Its strategic plans take the place of long term plans.

Politics

Wal-Mart has been at times subjected to political action law suit. For instance, it has been subjected to the law suit for gender discrimination.

Economic

The US has its plan to moderate the increase of supercenters in order to leverage capital assets through a plan which is designed to increase returns and sales in U.S. stores.  This is likely to affect Wal-Mart.

Social

There has been a trend in various  places that walmart  is the best place to go shopping. Therefore, consumers in US who want one stop service go to Wal-Mart as their first choice because of the social influence

Technology

 Wal-Mart retail uses modern technologies for the core purpose of marketing.  It mostly relies on the internet and social media for advertising and selling of its product. The CEO of Wal-Mart once noted that, technology is among the foremost concerns on the agenda of marketing in Wal-Mart.

Conclusion

This paper has discussed more about the SWOT and PEST analysis of Wal-Mart Company. Under the SWOT analysis the strengths, weakness, opportunities and threats have been discussed. On the other hand, on the PEST analysis the political, economic, social and technological factors have been discussed.

You can also have a look at the pest and swot analysis of Samsung here