Walmart Strengths and Weaknesses Essay Example

The company has numerous strengths that help it maintain its large footprint. The main strength is its strategy of “Every Day Low Prices.” Being such a large retailer, they collaborate with many suppliers around the globe to lock in low rates on numerous items. They also hold an enormously powerful hold over their suppliers and competitors. This helps Walmart essentially “scare” away other businesses smaller than they are from trying to compete with them. They have the comply with what Walmart wants them to do, since some suppliers rely on the company to stay in business. Over the past 2 years Walmart really stepped up their online retail experience. The Covid 19 pandemic really forced Walmart to drastically shift their sales to online due to global closing of businesses to stop the spread. The final strength Walmart has is their brand recognition. You can go to any developed country and find someone who has purchased an item from Walmart. 

Weaknesses 

Walmart has numerous weaknesses it needs to work on before they seriously hurt the company. First Walmart has very thin profit margins. These thin profit margins are caused by the brands low prices on thousands of items they sell. Walmart also has a reputation for mistreating their employees and having bad working conditions. Back in 2021 Walmart raised Sam’s Club minimum wage from $11 to $15 an hour, but only raised the Walmart stores $1 an hour, eventually raising it to $15 an hour in 2022. Other companies can easily imitate Walmart’s business model since they do not own anything competitive over grocery chains like Target or HEB. The only thing that Walmart has is the shear footprint they have that gives them any advantage over other retailers. Finally, the shear size and control Walmart has can leave the company weak in some areas of its business, since it cannot physically track everything all its stores do. 

Opportunities 

Being such a large retailer grants Walmart opportunities that could let them dominate the market. First, Walmart can improve quality standards. Everyone knows Walmart as being cheap and affordable by having low quality items. Increasing the quality of items can help increase new customers to visit the store that would not have previously. Walmart also could benefit from partnering or merging with other global retailers. This will help to reduce competition in the market segment and allow them to expand their footprint while increasing revenue and brand image. Another opportunity that Walmart has is to strengthen online sales. Since the start of Covid internet sales have skyrocketed. Many people now prefer to shop online and have the items delivered to their doorstep or brought to their car. A strong online sales portfolio could help Walmart recover the costs of maintaining physical stores, as well as costing next to nothing to operate since no physical store is need for customers to walk in. 

Threats 

A company as large as Walmart will have numerous threats to combat in the retail market. The biggest threat Walmart has to deal with is the trade tensions between all the different companies it operates in. This has become a growing concern especially with the Russia and Ukraine war going on. This has caused the oil prices to skyrocket and caused prices to become unsustainable. This will cut into the profit of Walmart because the fuel they spend on transporting their products have increased and their profit margins decrease. Another threat Walmart can face is an unstable economy. When an economy is unstable consumers stop spending and try to make their resources last. This makes revenue plumet forcing companies like Walmart to relook at their business plans. Another major threat Walmart has to deal with is technical issues that disrupt their online website. When technical issues disrupt their website for a prolong time which drastically affects their profit. This can hurt the brand image which will cost Walmart in the long haul.