SWOT Analysis Of Walmart’s E-Commerce Strategy

SWOT Analysis

The inclusion of the information and technology in business practices has changed the overall operations of the economy from traditional to digital. The company Walmart Inc. is a leading global retailer whose headquarter is based at the United States. The business of the entity is widely distributed with operations based at the 27 countries, and including the 11,200 stores.

In addition, there is a well-established e-commerce website network in 10 countries. The E-business strategy of an enterprise refers to the organizational performance by the inclusion of the information and the emerging technologies. The following work explores the various facets of the e-commerce strategies of the entity Walmart. The report will examine the strengths and the weaknesses of the said entity, in addition to the opportunities and the threats in the industry of operation of the entity, in the light of the e-business environment.

SWOT Analysis

The management technique of SWOT analysis deals with the internal resources, weaknesses and the responses to the same. Thus, the analysis aids the management in the policy formulations with respect to the financial sector, marketing strategies, human resource structure and more. The SWOT analysis of the entity Walmart in light of the e-business operations is presented as follows.

Strengths

• One of the significant assets of the entity in terms of the e-commerce business practices is the introduction of the “Omnichannel stores.” The entity opened its first Omni channel store in Mexico. The store is loaded with features like drive-thru facility, free Wi-Fi internet, digital catalogues, and the self-checking out facility as well. The same has been introduced to improve the customer experience, as well as challenging global competitors like Amazon.
• Recently, as reported by the company, the online sales of the entity in the United States rose to about 40 percent in the second quarter.
• In addition, the company has also invested in the online grocery pickup business. This would be a new product to the existing e-business products and therefore a strength.  
• The fact that the revenues of Walmart are around three times more than that of the biggest e-commerce competitor Amazon proves to be its biggest strength. This way the entity can control suppliers to an extent by quoting them the higher and better prices as compared to the local as well as the global competitors. As a result, the overall supply chain can be benefitted as well.

Weaknesses

• One of the major weaknesses of the entity Walmart in terms of the e-commerce operations is that the demographics of the customers is such that the customers are not that tech savvy as in case of the Amazon customers. For instance, one of the chief products of the Amazon is the Amazon Prime, while the Walmart is majorly known for its brick and mortar retailing. As a result, the competitors like Amazon enjoy the tech-savvy base of customers, which aids them in other products as well.  
• Another major weakness for the entity in the e-business operations is that there is a lack of variety in terms of the products offered, in terms of both the numbers and the quality. The entity offers only about the 55 percent of the bestselling products of that of the Amazon. However, the management regards the same at its topmost priority.

Opportunities

• The most recent opportunity in terms of the e-commerce business is the upcoming holiday seasons, and thereby an opportunity to increase the sales as well. The company has very well responded to the same by the recent business strategy of the company in terms of the introduction of the “Black Friday Sale 2018.” The online sales like such are an essential part of the entity’s e-commerce strategy. The existing network of the websites and resources are being combined with the few newly created app-based store maps.
• One of the major opportunities that can be explored by the Walmart in the upcoming month of the holiday season is the wide gap in the sales of toys because of the shutting of the toy stores by the well-known retailer Toys R Us. The said retailer had about 15 to 20 percent market share in the toys sector, which accounted for about 800 stores in the region of America itself. This gives a major opportunity to the entity Walmart to enter into the line, with the existing advantage of brand name and benefits of economies.  

Threats

• The major threat to the e-commerce business operations business of the company is in the form of tough competition posed by the online business giant Amazon, which is the owner of approximately half the e-commerce market.
• The upcoming threat for the company in terms of the industry changes is that the upcoming holiday season might reduce the margin of the entity. This can take place in the event of sustaining competition against the online giants like Amazon, and thereby offering of whooping discounts. In addition, to consistently maintain the existing capabilities, the entity is also needed to maintain the investments in the e-commerce components that could reduce the margins even further.
• Another threat for the entity’s e-commerce business is in the form of the competition posed by the local websites and the players like AliExpress in China, Bol.com in the Netherlands, and many more.

Thus, the SWOT Analysis as conducted above depicts that the investment in the e-commerce sector has proved to be a beneficial business strategy in terms of the existing market conditions as identified.

Conclusion

As per the discussions conducted in the previous parts, it can be stated that the e-commerce strategies play an important role in the success of the entity. These must be combined with the overall business strategies, as depicted from the case study of the company Walmart Inc. above. The company made investments in the various components of the information and technology to boost up its revenue and the customer base.

The entity combined its e-commerce efforts with the business strategies of growth and expansion in terms of region and new product lines as well. The efforts have proven to be positive for the company over the years. However, a few weaknesses and threat exist in the form of industry changes and competitors to the company Walmart as well. The strategy to get past the same can be stated to be continuous innovation and adapting to the technological upgrades and changes. Accordingly, it would be right to state that global business enterprises cannot function without a strong framework of information, technology, and connectivity.

Websites and Articles

Badkar, Mamta, Walmart US Sales Rise At Fastest Clip In More Than 10 Years | Financial Times (2018) Ft.com <https://www.ft.com/content/244e17f2-a0b7-11e8-85da-eeb7a9ce36e4>

Brian Deagon, Amazon vs. Walmart: Locking Horns In A Battle For Retail’s Future (2018) Investor’s Business Daily <https://www.investors.com/news/technology/walmart-vs-amazon-retail-stores-e-commerce/>

Carlo Versano, It’s Time To Accept That Walmart Is An E-Commerce Company (2018) Cheddar <https://cheddar.com/videos/its-time-to-accept-that-walmart-is-an-ecommerce-company>.

Curran, Kevin, Industry, Macro Pressures Could Squeeze Walmart’s Margins Into Holidays (2018) RealMoney <https://realmoney.thestreet.com/investing/stocks/industry-macro-pressures-could-squeeze-walmart-s-margins-into-holidays-14783497>

Darren, Geeter, Here’s what it’s like to shop at Toys R Us for the last time (2018) CNBC < https://www.cnbc.com/2018/06/29/toys-r-us-closing-sales-stores-retail-toys.html>

Investor’s Business Daily, Black Friday: How Target, Walmart, Amazon Deals And Shipping Match Up (2018) <https://www.investors.com/news/black-friday-sales-target-walmart-amazon/>

Jon Dages, Mei Li, and Chris Moore, Walmart vs. Amazon (2016) The Economist < https://www.economist.com/sites/default/files/ballstate_ws.pdf>

Lisa Lacy, Local Ecommerce Players Around the World Are Giving Amazon and Walmart a Run for Their Money (2018) AdWeek <https://www.adweek.com/digital/overseas-local-ecommerce-players-are-giving-amazon-and-walmart-a-run-for-their-money/>.

Mexico News Daily, Walmart Has Brought Its Omnichannel Store Concept To Mexico (2018) <https://mexiconewsdaily.com/news/walmart-opens-its-first-omnichannel-store/>

Walmart, About Us (2018) <https://corporate.walmart.com/our-story>