Swot And Pest Analysis Of Wal Mart Management Essay

Swot And Pest abstract Of Wal Mart Management EssayINTRODUCTIONThis assignment is basically based on SWOT abbreviation of Wal-Mart, a leading biggest global retail comp any. Wal-Marts Sam Walton opened the first discount butt in in Rogers Arkansas back in 1962, and 47 age later, Wal-Mart operates 8,159 units in 17 countries. Wal-Mart employs over 2.1 one million million people ecumenic, making them one of the largest private employers in both the US and Canada, and the largest private employer in Mexico. Even in the midst of a recession its estimated that Wal-Mart stack aways retail market place shargon has raised markedly and they ar seeing sales gains for 2009. Wal-Mart has a dramatic story of succeeder from its humble beginnings to its transformation into an industry leader one apprise only wonder what the time to come holds for this corporate giant.One aspect of Wal-Marts body structure that has given them a competitive edge is their efficiency in logistics. Beginning in the early 1970s, Wal-Mart utilized a warehouse distribution schema facilitating bulk purchasing and flowing distribution processes enabling them to dramatically minimize distribution embodys. Today Wal-Mart has more than 147 distribution centres with the average facility serving 75-100 retentivenesss. Their truck fleet travels about 800 million miles a year and they expire over 5.5 billion cases of products. A Wal-Mart distribution centre can have up to twelve miles of conveyor belts and about five hundred 1,000 employees. via http//walmartstores.com/FactsNews/FactSheets/Wal-Mart has also been able to gain competitive advantage with their embracement of Technology advance. This network included voice and video communication which streamlined the companys communication and facilitated the flow of sales and inventory information to the corporate headquarters in Bentonville, Arkansas.6 During a period of slower growth in the early 21st century, Wal-Mart made substantial en gineering science investments that were successful in gaining more inventory control and improving company performance. In addition to their scientific competitive edge, Wal-Mart continues to make smart strategic decisions to endeavor potential new revenue sources as they continually to expand into new markets. Wal-Mart opened the first Wal-Mart Super centre in 1988. Wal-Mart include a remove super-market, garden centre, pet shop, pharmacy, tire and lube express, optical centre, photo processing centre, and some additional nonageder shops ranging from hair, nail, video, and fast-food outlets. Today there are over 2,700 supercenters in the US. By 1998 they introduced the Neighbourhood market concept which catapulted them into becoming the largest US food retailer by 2001.via http//walmartstores.com/FactsNews/FactSheets/By 1991, Wal-Mart began its international expansion with the introduction of its first store into Mexico. Two years later they formed Wal-Mart International their rapidly growing third division. Today, Wal-Mart has a total of 3,859 international locations and operates in Argentina, Brazil, Canada, China, Chile, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, the fall in States and the United Kingdom. Wal-Mart is now planning on expanding their routines in India and China even further. via The Wall Street JournalSome innovative products and programs Wal-Mart has created have contributed to their popularity and profit mightiness. Wal-Mart began its site to store program in 2007 which offers free shipping or delivery to a topical anesthetic store for purchases on their website walmart.com. via CNET Wal-Marts signage and logo have recently evolved in 2007 they rewrite their long time slogan Always Low Prices, Always with the current Save Money Live Better motto.Wal-Marts three Basic Beliefs and Values as follows are Respect for the individual, Service to our customers, and striving for Excellence . via http//www.walmartmovie.com/facts.php These long-standing beliefs havent hinderped them from becoming the source of some controversy and damaging press over the past decade including involution in multiple rightsuits involving questionable business practices. There have been multiple allegations of sexual discriminatory practices and cases involving unpaid wages.To achieve a greater understanding of Wal-Mart Stores, Inc., it is chief(prenominal) to analyze the strengths, weaknesses, opportunities and threats as to what one should expect in their future performance as a company.PEST ANALYSISThe way businesses operate is influenced by the wider political, economic, brotherly and technological environment. These are usually referred to as PEST cistrons PEST is an acronym for political, economic, social and technological By analysing trends and developments in their business environment, firms can spot new market opportunities and threats.Political factor Wal-Mart is curre ntly operates its operation worldwide. In this operation Wal-Mart need to follow certain rules and regulation of soldiers countries. Last year 2009, international operations generated 27.2% of Wal-Marts net sales. via wikiinvest They are facing big challenge from Chinese government and forced to Wal-Mart to acquire its operation with local firm. Political condition includes political instability, economic condition, currency regulation, legal and regulation constrains, intellectual property rights, tax system etc. Wal-Marts international operations have greater impact of host countries law and regulation like Indian government open door for external investment to operate business acquire with local firm. For Eg, currently, Wal-Mart acquired with Bharati Airtel leading Telecommunication partnership and open new retail store in year 2009 and shut their operation in Ger many a(prenominal) and South Korea.Economic factor Economic condition of host countries has greater impact on a ny business firm. Recently, Wal-Mart facing high inflation rate and currency devaluations. In US, Wal-Mart facing challenge of high pursual rate, higher fuel and energy cost, inflation, higher level of unemployment, higher consumer debt level, unavailability of consumer credit, higher tax rates, economic slow down and other economic factor could adversely affect consume adopt of the product or service offering by Wal-Mart.Social factor Wal-Marts international operation should operates according to local culture of host countries. It includes population growth, age distribution, career attitude and emphasis on safety. Trend of host countries affect demand of Wal-Marts products and services. via wikipedia.orgTechnological factor Nowadays, applied science has a grater impact on any business. This factors includes ecological and environment aspects. Wal-Mart need to invest in Research Development activities, automation, engineering incentives and respond the rate of technological change for remain in competitive market and No. 1 retailer. Wal-Marts spend huge amount behind continuous new advanced technology upgrade program.PEST abridgment assists to examine influences macro environment and with the help of PEST analysis, firm can successful examine its strengths, opportunities, weaknesses and threats i.e. SWOT. Wal-Marts SWOT analysis as follows SWOT ANALYSISThe internal and external environment scanning is an important part of the strategic planning process. SWOT is acronym, standing for strengths, weaknesses, opportunities and threats. A SWOT analysis enables an organisation to place itself and its products into perspective. The analysis helps to highlight the main strength and weaknesses of the organisation, together with any external opportunities and threats.SWOT AnalysisInternal AnalysisExternal AnalysisThreatsOpportunitiesWeaknessesStrengthsStrengthsMarketing Aspect Wal-Mart emphasis is on its brand image everyday low prices and good quality of pro ducts when marketing by using different channels. Wal-Mart is pose superior to their competitors by using their expertise center competencies. Wal-Mart involving local communities and they are sponsoring local teams. This is a major competitive advantage Wal-Mart has over the competitors. Wal-Mart has roughly 4000 stores in US. In UK, Wal-Mart take backover Asda on 26 July 1999 for $10.8 billion, internationally it has more than 1300 stores and this number is set to grow dramatically. Wal-Mart has excellent logistic system. They create the ideal one stop shopping experience. Because of conglomeration of its wide product range customers can do one stop shopping products, the typical customer can go into any Wal-Mart and walk out without having to stop at another store for anything that they could need.Management Aspect Wal-Marts policies and practices are designed to ensure an environment that is inclusive and equitable. Wal-Mart has 2,100,000 employees including international op eration. They set up training on working with people, equal employment opportunities, leading skills, diversity and help to achieve career objectives. Wal-Mart has strong community based initiatives. Corporate structure of Wal-Mart is very well rounded and managed with core values like respect for the individual, striving for excellence and service to their customers. The management of Wal-Mart is the backbone to the entire firm and these core values have propelled them to the top of their industry. They have allowed Wal-Mart to be worlds largest company.Finance and Accounting Aspect The company operates nearly 7,873 stores worldwide, with over 3,000 of them in international markets, where the company has adult its presence at an average annual rate of 30% between 2005 and 2009. The company focuses on offering the lowest prices across its business segments, which together realize $408 billion in revenue in 2010, a 1% increase from 2009 which is rapidly increases in revenue shows good financial position.Key Figures (via wikiinvest.org)Operation reaping Rateof Revenueof Operating IncomeSams Club63.7%79.6%Wal-Mart (International)11.7%7.4%Wal Mart (US)24.6%21.7%Current share price$ 53.90Human Resource Aspect Wal-Mart has more than 2.1 million associates or employees worldwide. They bring home the bacon continuous training to their workforce to run successful business.Production and Operation Aspect Wal-Mart has strong distribution system and its known as cross docking. They are continuous delivering goods to warehouses and to their stores within in one day. However it gives a faster response to market demands and low level of inventory. This system has allowed them to decrease its sales cost by 2 to 3 % over the industry.Research and development Wal-Marts innovation keeps it a leading retailer in retail industry as it is regularly turning out new patents/proprietary technology. Development and innovation are high at Wal-Mart with regard to their products/ services which give ultimate profit.Computer tuition System Wal-Mart uses satellite based communications for connecting all the network of stores. Wal-Mart is offering safe, secure and informative complete website where consumer can purchase products easily. Through web-site of Wal-Mart, one can find A to Z information of Wal-Mart.WeaknessesMarketing Aspect One of the biggest marketing weaknesses seems from Wal-Mart lobbying to expand into new market nationally and internationally. There are many areas across the US tried to block the introduction of Wal-Mart because of the economic impact like local stores, traffic and environmental conundrum. Wal-Mart has a damaged reputation because when they move into a new location they end up forcing for opening new stores which is unethical at all. Wal-Mart also shut down its underperforming business in South-Korea and Germany in fiscal year 2007-08.Management Aspect There are few females in top management role and few minorities employed. Wal-Mart is needing equality demand which is not ethical decision for Wal-Mart to be making. They are really hurting their corporate image by maintaining this position in market. There is also lack of union. Because of perception of treating employees poorly, Wal-Mart does not have any union involvement. There is biggest problem is lack of job security for associates.Finance and Accounting Aspect Ratio overtureFixed Asset Turnover8.4 %Earnings Per Share3.35 %Average parade period8 %As above ratio are presented weak finance condition. Fix assets turnover ratio present high investment but not being used. The EPS ratio is not good as compare to the industry. The collection ratio presents that Wal-Mart allowing their debtors to carry account with above average period of time. It increases the likelihood of non-payment.Human Resource AspectWal-Mart is non- unionized firm. Wal-Mart employees commence at lower wages than unionized corporations. Wal-Mart pays low wages to their employees which affect their standard of living. Wal-Mart is presently involved in class action suit behalf of formal and current female employees across its US retails and warehouses. These employees totalling to 1.6 million alleged that the company showed gender discrimination at the time of pay, promotion, training and job assignment. This is one of the biggest gender discrimination cases in the US.Production and operation Aspect Since Wal-Mart sell products across many sectors, it may not have the flexibility of some of its more focused competitors.Research and Development Aspect Wal-Mart is not actively engaged in any R D. Specifically, they do not do prior research before opening a new store in any new area.OpportunitiesEconomic Aspect When any countrys government invite foreign investment with new trade agreements, businesses like Wal-Mart have ability to offer products and services. This simply increases the markets available to retailers. Wal-Mart offers all products under private l abels. Expanding brand portfolio, Wal-Mart incurs lower operational costs, high quality product and gaining higher margin. Wal-Mart has tremendous opportunities for future business in expanding consumer market by acquisition, merge with, or form strategic alliances with other global retailers.Social, cultural, demographic and environmental Aspect To fulfil indebtedness or responsibilities towards social and culture, Wal-Mart announced plans to open in store clinic The Clinic at Wal-Mart to be connect with local hospitals in February 2008. The company could leverage rising wellness care spending in the US to boost revenues of its pharmacies and health clinics.(c) Political, Legal and Government AspectAsian market is virtually untapped by the retail world in many extent. It gives huge opportunities to expand business with unlimited and unexpected potential growth and profits.Technological Aspect Nowadays, online shopping is growing stage. To take advantage and experience of internet shopping, customers can easily purchase products by receives friendly site designs, efficient order fulfilment, fast delivery and response. It can help Wal-Mart to make huge revenue.ThreatsEconomic, social, demographic and environmental Aspect Wal-Mart is facing stiff emulation from a large number of companies in the retail market worldwide and local stores. Intense competition could adversely affect the revenues and profitability of Wal-Mart. They face opposition and resistance from communities by local and international market like small retailer in US and opposition of shopkeepers and retailers on introduction of Wal-Mart in India. Growing opposition to opening new stores from local communities and entry into international markets is presumable to hold back expansion plans of Wal-Mart.Political, Legal and Governmental Aspect Being a global retailer, each firm threaten by political problem in the countries where they operate in by nations industrial and general laws, rules and regulations. Like Chinese government does not take kindly open to their country to foreign establishments.Technological As technological change and advances, products being sold today are gone tomorrow this provides fewer products to sell and continuous change with technology update. Thus, Wal-Mart has to update technology as per current demand and upgrading requires high investment.CONCLUSIONWal-Mart is the largest retail firm in the world with strong market position in the US. The companys strong market position in the US provides economies of scale and enhances the brand image to the company. It derived almost 75% of revenue from the US market. However, the company faces stiff competition with local players which can adversely affect the revenue and profitability of Wal-Mart.In order for Wal-Mart to stay at the top of their game and follow the company strategy and achieve their make policy goals, they are going to have deal better with their stakeholders and make sure they guard their reputation well nevertheless they are criticized by some community groups, womens rights groups, labour union, grassroots organisations, resistance to union representation and alleged sexism.Key Strengths The key strengths are employees, financial position, customer oriented, one-stop shopping, gratification guaranteed programs, employee stock ownership and profit-sharing, well-rounded business, ease of website, good reputation, and favorable access to distribution networks.Key Weaknesses The key weaknesses are some ratios are not sufficient, non-unionization, no formal mission statement, few women and minorities in top management, undifferentiated products and services, site research, slow speed of checkout service, and finally a damaged reputation.Key Opportunities The key opportunities are expansion of business, better segmentation, leverage tech. and financial know-how.Key Threats The key threats are competition, labour unrest, brand loyalty disappearance, supplier backla sh affects performance of company.