Wal-Mart - A leader in the retail industry

Résumé du document

The situation of WalMart, leader in the retail industry, can first be examined through a SWOT analysis which will allow us to determine the strengths, weaknesses, opportunities and threats of the market. Concerning this internal analysis, we notice various strengths of the market: Sam Walton's strategy (i.e. a good positioning, an interesting location of stores, a real culture in the firm, good partnerships, and a strategy of "everyday low prices"), the use of new technologies, a developed distribution system and a good marketing mix. At the same time, the weaknesses have not to be neglected: the bad image of WalMart considered as oppressive with its suppliers, the lack of advertisings to promote the firm and so on. WalMart has now become the most profitable firm in the discount retailing industry of the United-States. Thanks to their dynamism and their innovation, the firm's stores are cheaper than their competitors. Furthermore, Sam Walton created a real culture in his firm. By considering his employees as associates, he made them much more willing to work hard and to participate to the improvement of company sales. Nevertheless, WalMart has become a target for its competitors. During this period of globalization and of stagnant activity, how will WalMart sustain the company's phenomenal performance and maintain its first position in the retail industry in a context of globalization?

Extraits

[...] For many reasons, the company is now the most profitable firm in the discount retailing industry of the USA. Indeed, in 1993, Wall*Mart represented 1953 discount stores Sam's wholesale clubs and 68 supercenters across the country. Wal*Mart has early innovated by investing in information systems with electronic scanning, the installation of a satellite system and of electronic data interchange. All these new equipments enabled the company to improve communication between distribution centers and suppliers, and the transmission of statistics on the inventory, sales and other daily information allowing reduced inventory costs and better forecasts of future orders. [...]

[...] Problem : Kmart is already very developed on the American ground. Even if its sales are less important than Wal*Mart, its weight seems to be a great problem for Wal*Mart to develop this kind of stores. A total concentration on the pioneer activity in the USA For many years, Wal*Mart had tried to innove a little by testing new formats and exporting its concepts abroad. However, competition in this market is really hard and it can explain the fact that in 1993 Wal*Mart knew a decline in its margins. [...]

[...] Does Wal Mart fear the challenge of the globalization? Our solution would be to develop Wal*Mart hypermarkets in emergent countries, exporting a strategy different from the American strategy. And the place that shows the most opportunities of development is Asia, and more precisely China. In order to ensure a great development, Wal*Mart would suggest an alliance to another firm like Carrefour that would give it its foreign experience. Wal*Mart has to profit from its power to catch the train of the globalization and to improve its leadership on the American continent. [...]

[...] Keeping diversifying and gaining market shares in the American discount retail industry. A total concentration on the pionneer activity in the USA A dynamic development abroad 6 Evaluation of these options: A new social policy different from Sam's policy, and a return to the paternalism of the beginning. This strategy could be a good one but seems to be not very easy to be built. Aim: - To break the image of the worst employer in the world - To stop the employees' disappointment: according to the sociologist Elton Mayo, with a higher care, employees work harder better and faster. [...]

[...] Not many advertising Wal*Mart's information systems expense was of discount stores sales; for competitors Somes questions should be asked: - Sam Walton died in 1992: can someone follow his steps? - Who will be able to evolve the company, to give directive to the evolution of the system? - Growth: can the growth be kept under control? - Associates: will they still be motivated? B. External analysis Opportunities - Good moment: Walton's discount stores were launched after the World War II, at the golden age of consumers, when consumers became increasingly better informed about products and market. Consumers were ready for discount. [...]