Essay, Pages 9 (2160 words)
Walmart is an American based multination retail corporation with over 11,500 stores in 28 countries. Walmart is world’s largest employer with 2.3 million employees worldwide. For many years most of the retailers were averse to the change. It used to be retailers who would decide what to sell and what customers should buy. But recent development in market suggests that now a days it’s the customer who defines the shopping experience and defines what retailers needs to sell and how to sell it.
Now a days with growing internet popularity, retailers are losing businesses if they’re not changing the way they operate. The whole industry including Walmart is moving towards adopting Omni channel trades and creating the online portals and trying to digitalized the whole shopping experience for consumers. Store operations and mindsets are changing nowadays. Treating customers as a priority and focus on satisfying their needs becoming a must have criteria for retailers. Lot of people believe Amazon is the biggest rival of Walmart and the way Amazon is moving forward, it will kill the whole retail industry but this does not seem practical and feasible .
Yes on side Walmart is trying to move forward aggressively with its online business but at the same time amazon is also stepping in to the retail Briggs and mortar stores which is clear with its decision to buy Whole foods.
The current retails industry is moving aggressively with redefining the online shopping experience for consumers and giving a tuff competition to amazon but at the same time Amazon is redefining the shopping trend with acquisition of Wholes food.
If we look at this trend from consumer’s perspective, it is a huge win for them. They are enjoying the special treatment from retails including Walmart but also taking advantage of a lower prices due to high competition. Based on the experts, 2018 will be the year where retailers including Walmart will try the new business models with more focus on customer convenience and great shopping experience to the customers. Walmart is also trying to change its brand image and getting in to fashion retails. Walmart is launching a new clothing line and partnering with Ellen DeGeneres. Also Walmart announced its partnership with Lord & Tyler in early 2018. This move of redefining the whole fashion line is necessity move for Walmart to compete with Amazon and Target. Recent trend and retail industry experts suggest that apparel spending is increasingly moving towards online, Walmart is revamping its website and adding more items to choose from in the fashion department. With offers like free shipping or additional discounts if bought online, attracts more and more consumers every day and Walmart is trying to get the fair share of this trend as well. (walmart.2018)
Walmart is moving forward aggressively with its e-commerce business and has set a really ambitious target of 40 % growth in 2019. Walmart is very well positioned with a huge foundation and large fleet of Briggs and mortar stores which none of its competitors have. With digital revolution within the company and aggressive business strategy, Walmart could be a leader in the e-commerce business within next 5 years. Same-day deliveries from stores and higher stocking power gives Walmart leverage over Amazon which also gives Walmart upper hand even though amazon has an early start in e-commerce business. In 2017 Walmart acquired Jet.com which was the company’s first step in e-commerce business but with acquiring 77% stack in the Indian e-commerce company Flip Kart for 16 billion dollars strong suggest that where a company is heading. With these mergers and actuations, Company will be very well positioned within the e-commerce industry with next 2 years. With the target of 40 % growth of e-commerce business within a year, Walmart has implanted some staller moves in past year to shape up the digital business. It has increased the assortment and options to its digital shopping lists and has largely expanded online grocery pickup and free pick up in-store and free shipping for items over $35. It also offers 2 day shipping on many items to compete with Amazon. It is loud and clear message here that Walmart is stepping up and moving forward rapidly in e-commerce business and it will be a tough competitor for Amazon. (Walmart.2018)
Also on the other side, Walmart makes a big move to boosts its fashion credentials and launching 4 different fashion apparel brands in 2018 including the partnering with Ellen DeGeneres. This will define Walmart to one stop shop for all the consumer’s needs especially for middle-class families. Based on the retail industry experts, Amazon and Walmart will be the top two companies in the eCommerce and retail market and with Walmart investing more in fashion lines and companies like Flip Kart, it’s evident the future direction where Walmart is heading . With stepping up in fashion clothing lines, Walmart could advance its efforts to reach and gain more business from younger and millennial consumers in-store or online.
As discussed earlier key players in the retail industry that could also compete against Walmart are Target, E retail giant Amazon. Walmart also faces competition from local or regional grocers like Kroger’s and Aldi’s but now wholes food being a part of amazon, amazon is the biggest rival of Walmart.
Problem Statement and Symptoms
Walmart’s US commercial enterprise is one of the most productive when it comes to bringing in money with $86 billion in net income in its monetary Q3 2019 but when we look at its worldwide operations, it continues to be especially valuable, racking up $28 billion in income . Despite this, Walmart has been running into some major issues worldwide.
The merger of Walmart’s UK supermarket chain Asda with fellow chain Sainsbury’s may be blocked over the concerns over the competitors.. The deal, in the beginning, said in April 2018, might see Walmart take a 42% proportion in the new company and get hold of about $4.1 billion. It additionally might have resulted inside the organization taking a step lower back from the aggressive grocery marketplace. If the deal cannot be finished, Walmart can be able to discover a private equity purchaser, but it would force the company to rethink its future presence inside the UK. . (Keyes, D.2019)
Another international challenge Walmart is facing now is in India with Flipkart, which Walmart invested $16 billion in, now has to cope with Indian guidelines that focus on e-trade businesses with overseas investors. The new overseas direct funding (FDI) guidelines affect groups’, such as Flipkart’s, capacity to offer reductions and distinctive merchandise and promote merchandise through companies they very own a portion of. Flipkart will continue to exist those adjustments and probably nonetheless thrive, but Walmart might in reality pick it now not face new challenges that modify the high-fee market it made this type of massive funding in.(Keyes, D.2019)
Working out its international troubles may be key to the future of Walmart’s rivalry with Amazon. Walmart apparently wants to cognizance on foreign markets with excessive ability, like India, in place of the ones that are already aggressive, just like the UK and Brazil, however, this effort is becoming complicated. Like Walmart, Amazon has additionally invested heavily in international markets and keeps to enlarge in new areas. For both corporations, this strategy is crucial due to the fact the North American marketplace, whilst pretty precious, is already aggressive and gives lower boom prices than a few rising markets. And for Amazon mainly, worldwide markets are needed to raise growth for its Prime subscriber base, that’s approaching saturation. If Walmart can achieve high boom markets, specifically those who Amazon is likewise in, it is able to propel its commercial enterprise to new heights and better compete with Amazon inside the destiny.
Even though Walmart is trying to expand its business globally and investing heavily in technology platforms and products, it is very clear that overall revenue is almost flat for Walmart for the last 10 years while compared to its competitor Amazon which saw around 30% revenue growth every year. This is a big sign of a problem for Walmart.
- Global Company
- Supply chain spread across the world
- Efficient supply chain
- A strong presence on the ground with an army of retail stores
- Very low-profit margin
- High competition
- Lack of branding and upscale customers and products
- Extensive growth and expansion opportunities in developing countries
- Improve skill level and develop a competitive workplace
- Improvement in quality of products and brand image
- Online retailers like Amazon and Ali express
- New global awareness and trend around healthy lifestyle
- High and aggressive competition
Growing competition, the faster shift towards smart shopping, and internet trends are some of the list worries for Walmart around the globe. With sales slowing down and growth much less than competitors like amazon, improving customer service and the shopping experience is the only thing that’s left on the table for Walmart to offer to its consumer in order to retain them. As per Walmart’s US CEO, Not stocking shelves fast enough and stores lack in basic cleanliness are two major factors in customer’s experience. Also, Walmart is way far behind in its digital services and faster checkout and delivers the smart shopping experience to its consumers. (Mourdoukoutas, P.2018).
Walmart has been caught on many controversies in the last few years about its ethical and Christian practices. There was a protest in Chicago in 2005 against the retail giant. “Wal-Mart is the poster boy for corporate exploitation” is what one of the lead protesters said. They believed that low pay, scant benefits, race and sex discrimination, and profiting from mistreated workers in foreign “sweatshops.” Before the Chicago City Council votes to block one store but allow another, aldermen label Wal-Mart “the worst company in America” and an “evildoer.” Man church leaders joined the protests against Walmart in the last decade as they also started believing that Walmart’s practices are unfair and immoral. The leaders of the churches who joined the protest believed that the business of Walmart was founded on beliefs from Christian principles and when the company developed business outside the country, it was not the case anymore. Race discrimination and exploitation of minors were couples of blames they put on Walmart and as a repercussion on this, there is a wide scarcity of people who protest against the retailer giant but data shoes this has not a huge impact on its revenue.
This SWOT analysis shows that Walmart must prioritize using its strengths to exploit opportunities in the global retail market. The company’s weaknesses and threats should be secondary priorities. Walmart can improve its HR management standards and product quality standards to improve firm performance. Also, the company must continue expanding its business to exploit economic opportunities in developing markets. Walmart’s strengths based on its global organizational size, global supply chain and high efficiency of the supply chain can support aggressive global expansion in foreign markets. Still, the company must implement strategic changes based on the weaknesses and threats presented in this SWOT analysis, to prepare the business for the long-term developments of a globalized and increasingly online retail market. (Smithson, N .2019)
One of the easiest ways to evaluate Walmart’s business improvement would be based on its revenue and growth numbers each quarter. Walmart should see a high jump in its online sales since it putting lot of effort into digital platforms. Also, Walmart should see an increase in its international sales as it’s growing in markets like India. Walmart should see a higher business in the service side of the business like in financial services, gas, and care clinics.
In a nutshell, Even though Walmart is facing challenges within the United stated from internet retailer amazon and targets on the ground, it will continue to be the to-go place and lifeline for millions of people around the world. By investing in online giants like Flipkart in India definitely gives Walmart a strong foundation to grow its e retail business around the world. So it’s clear that the future direction for Walmart is to gain a healthy share in the e-commerce business and also become one-stop-shop for all the generation by boosting its fashion lines and upgrading the apparels. Of course, business practices like free shipping, online shopping, same-day delivery, free returns, and exchanges will boost its business and attract more and more consumers every day and give Walmart an edge to fight against giant’s like Amazon and Target.
Mourdoukoutas, P. (2018, December 8). 3 Things Missing From Walmart’s Strategy To Beat Amazon. Retrieved from https://www.forbes.com/sites/panosmourdoukoutas/2018/12/08/3-things-missing-from-walmarts-strategy-to-beat-amazon/#7f6fb52523c0
Walmart SWOT Analysis & Recommendations. (2019, February 19). Retrieved from http://panmore.com/walmart-swot-analysis-recommendations-case-studyKeyes, D. (2019, February 5). Walmart is facing obstacles overseas. Retrieved from https://www.businessinsider.com/walmarts-international-business-challenges-2019-2Peterson, H. (2015, April 2). Wal-Mart CEO reveals the company’s 8 biggest problems. Retrieved from https://www.businessinsider.com/wal-marts-ceo-reveals-8-main-problems-2015-4Walmart Makes a Big Play to Boost Its Fashion Credentials. (2018, February 27). Retrieved from http://fortune.com/2018/02/27/walmart-fashion-private-label/Deliver Us from Wal-Mart? (2005, April 22). Retrieved from https://www.christianitytoday.com/ct/2005/may/17.40.html