The “Walmart Canada” is one of the divisions of Canadian Walmart. The main headquarter likes in Mississauga in Ontario. The organization started its journey at 1994 with the intention of purchasing the chain of Woolco Canada from F.W. Woolworth Company. It mainly comprised of discount stores. Besides, it has competed in various sectors such as Dollarama, Canadian tire and Home Hardware (Wynne 2016). Further, on the basis of its success of US format, the organization was found to be focusing on widening its Supercentres, originating from converted and new locations. This is done by providing groceries putting them to a similar market, parallel to other supermarket chains. Then the company hold a grand opening of 15 centers in 2016, as they completed their expansion plan for the fiscal year (Alam 2017). During April 2018, the overall count was 410 stores. This included 334 supercentres with 76 discount stores at most of the nation’s territory and provinces. Their main landlord and principal are SmartCentres along with First Capital Reality and Riocan.
Figure 1: “Front store of Walmart Canada”
(Source: O.w.n news network 2016)
It is seen that the total sales in Canada have increased by about 2% for Walmart. Here, the sales at the stories are open till more than a year that grew by 1.0%. Here both of these decelerated as the net sales rose about 3.4 % and computable sales rose to about 2.5%. At Canada, the customers have reacted to the investments that they have made in price and contributing to various market-share gains in different primary categories of traffic-driving (Bushnell et al. 2015). Moreover, they have expanded to multiple locations where they have offered online grocery pickups ad launched e-commerce marketplace. This has doubled their online assortment and continued to concentrate on primary categories such as apparel and home. Further, the overall online sales have soared 50% during the initial quarter that has exceeded the rate of growths in the retail industry. However, it has been slower than the past quarters 60% increment. This has added 8% basis points to various third quarters as compatible to the gain in sales (Konur and Geunes 2018).
Figure 2: “Growth of market share at Walmart Canada”
(Source: Lawrence 2016)
The above statistics have highlighted that the amount of retail stores of Walmart in Canada from the year of 2012 and 2018. It is seen that there are 410 retail stores till 2018. This is same as the number of stores as the prior year.
Figure 3: “Current market position of Walmart Canada”
(Source: The statistics portal 2018)
Walmart Canada has underscored their distinct resources, strong innovation and execution in October 2018. This is done at the Investment Community meeting. At the same place, Walmart was to Webcast 2018 at October 2018. On August 18, in this year Walmart announced their completion of Walmart Investment on one of the leading marketplace ecommerce Platform. Wal-Mart Canada has tightened their levels of inventory in common categories of merchandizes (Myers et al. 2017). Their inventory has increased at a slower pace than its sales. Here, the retailers have never broken out their real Canadian sales, though they have been estimated to be more than 25 billion dollars. They entire fourth-quarter has fallen to about 3.70 dollars U.S. dollars and about 4.57 billion one year earlier. This has reflected the effect from various discounted real estate severance and projects. It has excluded items, and the earnings at every share of about 1.30 dollars have exceeded the average estimations of 1.29 dollars of analysts (Joseph 2015). Here, the revenue has risen about 1 percent to 130.9 billion. This is the depreciation of Mexican peso to U.S. dollar curbing growths. It has excluded the fluctuations in currency and the sales reached about 133 billion dollars.
The issues of the clients are identified with relevant issues around the current research.
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Reduced sales |
Adding huge end-products at low costs, relative to others, is a smart strategy for Walmart Canada. The activity has taken them out of deeper discounter or cheap employee positioning with reduced price or choosing a quality position. However, failing to maintain the idea to be less expensive than the rest has hindered their success. Their base customers and digital clients, who are of a different group than the ones visiting physical stores have seen Walmart breaking faith. This is done with their core principles of the promise of the brand. Thus they have commenced a vital mistake (Diehl and Bishop 2017). However, Walmart Canada should attract slightly distinct demographics, publicized by them as they move on. As the new shopper demographic support higher priced products, lower than the others, then the strategy would take time. However, this is time consuming. |
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Poor customer service |
Walmart being the low-price leader has not always been winning on prices. Competitors of Walmart Canada has been offering lesser process on similar items. Hence it is hated by various customers. Further, it is also found that customers have disliked shopping at Walmart, as they have been facing trouble in seeing what they have needed. Customers have been facing doubts to get in and out of the stores easily that they have liked to do (Pesch and Bennett 2015). Moreover, many of them have left instead of grabbling every item on the lists. Furthermore, Walmart Canada has also involved long waits at checkouts and their return lines. Further, merchandize of Walmart Canada has not always been up to that snuff. |
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Outdated product offerings |
Walmart has not designed products and product lines for maximizing benefits. Here, out of every available potential, Walmart has been unable to decide which one to offer. Further, Walmart Canada has lacked in developing a framework to balance costs to develop and provide an important line of services and products against demands of customers for extra choice (Pesch and Bennett 2015). |
The various problems of Walmart Canada are determined through the following aspects.
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Spiraling problem |
For example, the sales for Levi for Walmart Canada peaked in 1996 at an amount of 7.1 billion dollars. However, it is seen in the previous years that the organization spiraled down in consecutive six years in a row, to the cost of 4.1 billion dollars. Moreover, through the first six months of the year 2003, their sales declined with another 3% (Greco, Figueira and Ehrgott 2016). Hence, Walmart has not brought mew products needed by consumers. Thus Walmart never has benchmarks for driving the people down in prices. |
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Competition |
This can be explained by an example. The retailers of Canada has witnessed stiff competition from organizations like Amazon. This has pushed a lot to invest in terms of home delivery and online sales. |
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Loss of customers |
This can be highlighted by the case where the company has accidentally provided their customers with 21k dollars. However, they have pleas to take that back as not considered seriously. This type of negligence has lead Walmart Canada to lose their customers. |
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A decline in market share due to low sales |
The marketing team of Walmart Canada has a disproportionate quantity of advertising spend on various items with low of price point. Here, the merchandizing team has not been prepared for a surge in demand (Burger, Combs and Bauer 2015). This has led to stock outs and various loss of sales. Hence, they have faced a decrease in market share. |
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Frustration and morale of employees |
It is seen that within 2016 to till date, about 12% of employees are found to leave their job due to technology frustrations. About 45% of office workers complained that their greatest disappointment from technology at the workplace had been too many emails and different email downtimes (Du, Deng and Qian 2018). |
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Bankruptcy |
Walmart Canada has witnessed pretax losses of about 5.4 billion dollars on various discounted operations during 2014. Again there has been projected pretax losses of about 275 billion dollars over cut activities during fiscal 2015 (Santos and Laczniak 2015). |
Conclusion:
The above study shows that Walmart Canada has been failing because of lack of use of demographics to their advantage. The current issues with supply chain have denoted that the retailers struggled to put their primary predicts on the shelves. At other cases, they have gone too far away to “Canadianize” their merchandizes they have in their stock. Their employees have been mismatching data systems that have led to employee frustrations like confusion and delays as sorting products are concerned.
The “situational analysis” indicates method collections, used by managers for examining various external and internal factors. Here, it is used to study the business scenario of customers and capabilities of Walmart Canada. This is done through the following models.
Political Factors:
The potential external elements in a remote or macro environment of Walmart includes the following
These indicate that Walmart Canada must denote the threats of greater wages. It is a threat since it has been going against cost minimizations important for generic strategic of cost leadership of Walmart Canada (Santos and Laczniak 2015).
This includes the following.
All of the above factors are opportunities. These indicate that Walmart Canada must exploit their scopes across the world. They must focus on the fast-growing economies of developing nations (Rashid 2017).
Sociocultural or social factors:
This includes the following.
These are all opportunities for Walmart Canada. They must adjust their strategies for exploiting the rise in consumer demands in various areas (Myers et al. 2017).
They are the following.
Again, the factors are opportunities for the company. It is seen that online marketing and selling has risen their revenues (Wang, Fan and Wang 2018).
These factors are highlighted below.
The various elements, also bringing opportunities and threats for Walmart Canada are listed below.
Here, developing human resource management practices of Walmart has exploited scopes regarding employment regulations (Muda and Windari 2018).
The analysis is done through the following illustration.
Figure 4: “SPICC Analysis of Walmart Canada’s market”
(Source: Created by Author).
While analyzing the business of Walmart Canada and the 7S framework, they have mainly employed three hard elements. These are systems, structure and strategy. Because if their strength is these sections, they have been successful.
Figure 4: “7S Analysis for Walmart Canada”
(Source: Created by Author)
Their CEO had addressed those problems by introducing particular modifications in their business strategy (Myers et al. 2017). The organization announced USD1 billion investment in February 2015, with hourly associates for providing greater wages and more training and rise in scopes to create a career with Walmart.
This has served about 250 million clients every week within 70 banners.
It has included and not restricted to staff recruitment and selection, finance, IT, employee performance appraisals and many more (Park and Chung 2018).
Marketing of Canada’s Walmart is analyzed through the following marketing mixes.
Figure 5: “7P Analysis of Walmart Canada”
(Source: Created by Author).
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Strengths: |
Weakness: |
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This is an internal force for Walmart Canada. These are all related to their size of business. These are Ø High efficiency of a supply chain Ø Global supply chain Ø Global organizational size |
These are related directly to their generic strategy. These are listed below. Ø Model, that can be copied easily Ø Highly thin margins of profits. |
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Opportunities: |
Threats: |
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These are primarily related to the development and expansion of business practices. They involve the following Ø Development in quality standards Ø Development of different human resource practices Ø Expansion in different developing nations. |
These are external forces and related to conditions of retail markets and changes to consumer perceptions. They are highlighted below. Ø Small-scale or individual online selling Ø Healthy trends in lifestyles Ø Aggressive competitions. |
For this, Porter’s 5 model is chosen to be suitable for the present analysis.
The Five forces of Porter analysis implemented on Walmart Canada highlights the implications of their competitive rivalry and intensity of their competition over their retail sector and business. Here, this situation of the industry scenario has pushed them in exploring various strategic measures in managing adverse impacts of competition (Heng and House 2016). Through considering where this retail market has been saturated, the organization has a constant process of development for counteracting the effect of string competitions.
This is a strong force. It involves:
This is a weal force and includes:
This is a weak force. It includes:
This is a weak force and comprises of:
This is strong force and includes the following.
Conclusion:
The study helps in understanding that Walmart Canada must be focusing on their infrastructures to gain benefits from their core competencies in Canadian market. They should be focusing on e-commerce and e-retail for growing their brand quicker. Moreover, they must be investing more in terms of technologies and must raise their presence through extending their distribution networks. It must be reminded that the lifestyles of consumers are changing. Hence, more and more millennial have been shopping online. Hence Walmart Canada should focus on catering to the necessities of the present generation through investing over the latest innovations. This must make their shopping a more convenient one.
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