Final Paper

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Company Overview

Walmart Inc is an American multinational retail company. It has its headquarters

in Bentonville, Arkansas. The company has 11,510 stores and clubs in 27 countries.

According to the fortune 500 lists, Walmart is the largest company in terms of revenue

and the largest private employer globally. Walmart's objective is to provide safe,

affordable food and other products to people worldwide (Ellickson, 2016). It aims at

achieving the objective in a way that fosters environmental and social sustainability,

economic opportunity, and creating value for the community.

Walmart Inc provides retail services as its primary product. The company also

offers private-label brands, on-demand digital streaming services as well as house

brands. Some of the products that are sold in its retail business include foodstuffs,

mobile phones, electronics, beauty products, household items, among others.

Although the company's international sales dropped in 2020, they accounted for

almost 25% of its revenue. The company had net sales of $120.1 billion

internationally in 2020. That represents the sales that were made in its operations

outside the US. That was a slight drop from 2019 that can be attributed to the world's

economic condition in 2020 (Walmart Inc, 2020).

The company has some strengths. One of its main strengths is its immense size,

which leads to economies of scale. The company can also access a lot of funds, thus

growing at a faster rate. The company also has an efficient supply chain enhanced by

technological advancement. That ensures that Walmart evades the market risks such

as disruption of the supply chain, thus giving the company a competitive advantage.

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The company also has some weaknesses. The company uses a cost leadership

strategy, which is easy to imitate. Additionally, the company earns very thin profits

from the products that it sells. The company also lacks other specific competitive

differentiators apart from its organizational size and low prices. Thus, it cannot

compete with retailers that promote the quality of their goods and services.

The company has various opportunities for growth and improvement. It has the

opportunity of expanding to developing countries. That is because the cheaper goods

have a higher demand in developing countries. The company also can improve its

human resource practices by employing highly qualified employees and training the

existing employees.

Lastly, the company faces some threats. People are turning into healthy

lifestyles, and most of Walmart's foods are categorized as unhealthy. The company

also faces a threat of competition from both big and small retailers.

Competitive Analysis

One of the main competitors of Walmart in the global market is Carrefour. In this

section, the comparison of the two companies will be analyzed. Both companies are

retailers. Therefore, they sell a variety of goods in their retail outlets. They include

foodstuffs, electronics, clothes, mobile phones, household items, and beauty products.

Both Carrefour and Walmart use cost leadership strategies as they offer discounted

prices for their products. Carrefour used supermarkets, hypermarkets, and discount

stores to reach its customers. On the other hand, Walmart uses an intensive

distribution strategy. It offers its products in physical stores and on its e-commerce

platform. Walmart provides discounts for its product and runs frequent promotions.

On the other hand, Carrefour uses the penetration pricing strategy, which involves

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charging low prices.

Collaborator Analysis

Walmart has a successful supply chain. It has reliable suppliers who supply

products to them. The reliability of the suppliers ensures that the company does not

experience stock-outs. Walmart has also introduced an e-commerce marketplace. The

company partners with third-party sellers who sell on their e-commerce platform. The

company may experience some challenges in the partnerships, especially with third-

party sellers. That is, if such sellers sell low-quality products, it will have a negative

implication on Walmart's brand.

PEST Analysis

The PEST analysis indicates the external environment factors that affect a

company. In this case, the PEST analysis of Walmart will be explained. It will indicate

the political, economic, social, and technological factors that affect Walmart's

international operations. The political and regulatory factors may affect Walmart

either negatively or positively. Walmart operates in countries with high political

stability. That is an opportunity for the business to thrive (Nguyen, 2017). The

company is affected positively by the political support for globalization. However, the

company is affected negatively by the political pressure to increase the minimum

wage. Walmart is under pressure for economic changes. One of the external economic

factors that affect Walmart is the stability of major economies. That creates an

opportunity for the company. Another economic factor is the continuous growth of

developing countries, thus creating another opportunity. It is also affected by the

changes in interest rates and inflation.

Walmart influences consumer perception and preferences. One of the social

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factors that affect Walmart includes the retail market's health lifestyle trend. That is an

opportunity that can be harnessed. It is also affected by urban migration and cultural

diversity trends. Walmart should address the technological trends. That will increase

the company's opportunities and thus make it more competitive n the market. Some of

the technological factors that affect the company include increased business

automation, increased mobile device usage among consumers, and business analytics.

Recommendations

To meet its objectives, the company should come up with various strategies. In

this section, some recommendations will be given to ensure that the company

becomes more competitive. One of the strategies that may be used is to verify the

quality of the products sold by third-party sellers. That will ensure that they sell goods

with high quality. Secondly, the company should foster the quality of its products.

That will increase its competitive advantage in the market as it will be known for

high-quality affordable products. The company should also promote its e-commerce

platform. Currently, Walmart's e-commerce platform is not well-known. Thus, by

promoting it, the company will ensure its e-commerce platform's growth.

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References

Ellickson, P. B. (2016). The evolution of the supermarket industry: from A & P to

Walmart. In Handbook on the Economics of Retailing and Distribution. Edward

Elgar Publishing.

Nguyen, T. T. H. (2017). Wal-Mart’s successfully integrated supply chain and the

necessity of establishing the Triple-A supply chain in the 21st century. Journal of

Economics & Management, 29, 102-117.

Walmart Inc. (2020). 2020 Annual Report. Corporate.Walmart. https://

corporate.walmart.com/media-library/document/2020-walmart-annual-report/

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