The modern organizations are able to operate in the industry with the help of value which is provided to the customers. The customers are able to play a pivotal role in the ways by which organizations are able to increase levels of profitability. Multinational organizations also need to provide effective value to the customers in order to improve their position as compared to its competitors. The report will be based on the analysis of the internal and external environment of Walmart and the ways by which the company aims at providing value to the customers (Ethiraj, Gambardella & Helfat, 2018).
Walmart Inc. is a multinational retail based organization which has its origins in the United States of America. The organization is known for operating a huge chain of hypermarkets, and discount based stores in different countries. The headquarter of Walmart is located in Arkansas and was established by Sam Walton in the year 1962. The organization has been able to establish more than 11,000 clubs and stores in 27 countries of the world. Walmart has been able to become the largest organization in world based on revenues which are generated (Walmart.com, 2018).
SWOT analysis of the organization will be helpful in providing insights related to the external and internal forces which have proved to be significant in development of the strategy of Walmart. The factors can however change with time and the levels of growth of the company are also able to affect the operations of Walmart. The strengths of Walmart can be useful in exploitation of different opportunities. The factors related to different aspects of Walmart are thereby able to affect the leadership of the retail organization as well (Doz, 2017).
Strengths – The major strengths of Walmart are based on the size of the business organization. The organization is thereby able to withstand various levels of threats the which are posed by its competitors. The global size of the company is able to provide Walmart with huge amounts of funds for its expansion and growth. The organization is provided with effective levels of resilience from different market risks with the help of its efficient supply chain. The high efficiency levels of the global supply chain are considered to be major strengths of the organization (Ethiraj, Gambardella & Helfat, 2018).
Weaknesses – The generic strategy which has been implemented by Walmart has led to a major weakness of the company. The low levels of profit margins are considered to be an effect of the implementation of cost leadership based strategy. The minimization of selling based prices of the company is related to the levels of reliance on the sales based volume. The lack of effective competitive differentiators is a major disadvantage (Frynas & Mellahi, 2015).
Opportunities – The opportunities which are provided to Walmart are related to the levels of expansion and improvement of different business based practices. The opportunities provided to Walmart are thereby related to global situation of the economy. The expansion in different developing countries is a major growth based opportunity for Walmart. The organization can further improve quality of products in order to attract more consumers towards the stores (Hanson et al., 2016).
Threats – Threats which are related to business operations of Walmart are based on the condition of retail market and changes which have taken place in the consumer perceptions. The changes in consumer demands can lead to implementation of changes in different competitive strategies. The major levels of threats which are thereby faced by the organization are also related to the lack of prioritization provided by Walmart to different healthy products in the stores. Aggressive levels of competition which are faced by Walmart in the retail industry are able to pose huge amounts of threat to the company (Hill, Jones & Schilling, 2014).
The segmentation based marketing strategy can be implemented by Walmart in order to divide group of consumers based on their preferences. The homogenous targeting based strategy has been previously implemented by Walmart and can be further used by the company in order to capture different customers. This can increase the levels of advantages which are provided to Walmart based on its target market. The strategy related to marketing which has been developed by the company is based on market positioning of Walmart. Development of proper competitive advantage is also considered to be a major strategy which is helpful in developing the position of Walmart and provide value to its customers as well (Lasserre, 2017). The customers of Walmart are provided with utmost levels of importance by the company which is related to the management of different operations. The distribution related activities of Walmart can be improved in order to reach a larger group of consumers within less amount of time. The improvement of distribution based strategy can play a key role in proper levels of operations of Walmart (Morden, 2016).
1st objective – The major marketing based objective of the implementation of the strategies is based on the division of customer segments based on their likes and preferences.
2nd objective – The targeting based strategy can be implemented in order to offer the effective products to the appropriate group of consumers.
3rd objective – The development of proper competitive advantage is based on the sustainable operations of Walmart in the huge levels of competition which are provided by different organizations.
4th objective – The development of effective distribution strategy can play a key role in providing the products and services to the customers based on their preferences.
The marketing mix which has been developed by Walmart is mainly based on the retail based business operations of the company. The organization has implemented cost leadership related strategy in order to operate in the competitive retail industry. The marketing mix which is used by Walmart is considered to be similar in different areas of the world. Walmart thereby aims at providing high levels of value to the consumers with the help of its marketing mix (Morschett, Schramm-Klein & Zentes, 2015).
Product – The retail service which is provided by Walmart is considered to be a major product. The organization is able to attract the customers with the help of effective services. The ease of shopping offered to the consumers is considered to be a major component of products which are offered to them. The ways by which customers feel are influenced highly by the sales personnel of the company.
Pros – The services which are offered to customers can thereby differentiate the organization from its competitors in the industry. The company can develop its position in the industry with the help of effective services (Rothaermel, 2015).
Cons – A major disadvantage of this aspect of marketing mix is related to the differences between preferences of the customers. The levels of services which are provided to the customers and their preferences can differ which can lead to a major disadvantage.
Price – The pricing strategy which has been implemented by Walmart is termed as “Everyday Low Price” or EDLP. The pricing based strategy is thereby based on the ways by which huge population of consumers can be attracted towards the products and services. Pricing based component of the organization is helpful in the huge volumes of sales of Walmart. The prices of Walmart have been able to contribute in a huge manner to the competitiveness of the company.
Pros – The major advantage of this pricing strategy has been the increase in levels of sales and revenues of Walmart (Wheelen et al., 2017).
Cons – A disadvantage which is related to the pricing strategy is related to association of low prices of products with low quality.
Placement – Intensive levels of distribution based strategy have been able to provide opportunities to Walmart to provide services to the customers. The responsibilities and roles which are offered to the employees are also related to the choice of consumers. Walmart has opened huge number of stores in order to reach the consumers.
Pros – The most important advantage which is provided by the placement of products is related to the ways by which the company is able to reach huge number of customers within less amounts of time (Madsen & Walker, 2015).
Cons – A disadvantage of this aspect of marketing mix is related to the lack of proper services in all the stores of Walmart.
Promotion – The promotional mix developed by Walmart is mainly based on different factors including sales promotions, advertisements, public relations and personal selling. The special discounts and deals are used for the purpose of sales promotions by Walmart. The organization also sponsors charity based programs which are also a part of the promotional strategies.
Pros – The promotional mix plays a key role in developing the position of Walmart in the industry and further increasing the levels of awareness as well.
Cons – A major disadvantage related to marketing mix of the company is based on the development of appropriate promotional strategies for different customer segments (Rothaermel, 2015).
Conclusion:
The report can be concluded by stating that Walmart has been able to develop its competitive position in the retail industry with the help of proper distribution and promotional strategies. The objectives which have been set by the company are thereby based on the ways by which Walmart can improve its position further with the help of effective strategies.
References:
Doz, Y. L. (2017). Strategic management in multinational companies. In International Business (pp. 229-248). Routledge.
Ethiraj, S. K., Gambardella, A., & Helfat, C. E. (2018). Theory in strategic management. Strategic Management Journal, 39(6), 1529-1529.
Frynas, J. G., & Mellahi, K. (2015). Global strategic management. Oxford University Press, USA.
Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2016). Strategic management: Competitiveness and globalisation. Cengage AU.
Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.
Lasserre, P. (2017). Global strategic management. Macmillan International Higher Education.
Madsen, T. L., & Walker, G. (2015). Modern competitive strategy. McGraw Hill.
Morden, T. (2016). Principles of strategic management. Routledge.
Morschett, D., Schramm-Klein, H., & Zentes, J. (2015). Strategic international management (pp. 978-3658078836). Springer.
Rothaermel, F. T. (2015). Strategic management. McGraw-Hill Education.
Walmart.com (2018). [online] Walmart.com. Available at: https://www.walmart.com/ [Accessed 25 Nov. 2018].
Wheelen, T. L., Hunger, J. D., Hoffman, A. N., & Bamford, C. E. (2017). Strategic management and business policy. pearson.
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