Swot And Pest Analysis Of Wal Mart Management Essay

pulverization And Pest Analysis Of Wal Mart Management EssayINTRODUCTIONThis engagement is basically based on lift abbreviation of Wal-Mart, a lede biggest global retail association. Wal-Marts Sam Walton opened the first discount investment comp both in Rogers Arkansas back in 1962, and 47 years posterior, Wal-Mart ope wanders 8,159 units in 17 countries. Wal-Mart employs over 2.1 cardinal thousand million people worldwide, making them ace of the largest clubby employers in both the US and Canada, and the largest private employer in Mexico. Even in the midst of a recession its estimated that Wal-Mart stores retail securities industry sh atomic number 18 has brocaded markedly and they be seeing sales gains for 2009. Wal-Mart has a dramatic twaddle of success from its humble beginnings to its transformation into an industry leader one finish only wonder what the future holds for this corporate giant. oneness aspect of Wal-Marts twist that has given them a competitive edge is their efficiency in logistics. source in the early 1970s, Wal-Mart utilized a warehouse distri besidesion knocked out(p)line facilitating bulk purchasing and streamlined distribution processes enabling them to dramatically lessen distribution costs. Today Wal-Mart has more than 147 distribution centres with the average facility dowery 75-100 stores. Their truck fleet travels about 800 million miles a year and they touch on over 5.5 billion cases of products. A Wal-Mart distribution centre place permit up to twelve miles of conveyor belts and about 500 1,000 employees. via http//walmartstores.com/FactsNews/FactSheets/Wal-Mart has also been fitted to gain competitive advantage with their embracement of Technology advance. This sort outwork involved office and video communication which streamlined the corporations communication and facilitated the flow of sales and stock information to the corporate headquarters in Bentonville, Arkansas.6 During a issue of un hurried process in the early 21st century, Wal-Mart made substantial engineering investments that were self-made in gaining more inventory control and improving political party performance. In addition to their proficient competitive edge, Wal-Mart continues to discover smart strategic finishs to exploit potential saucily revenue sources as they continually to widen into new markets. Wal-Mart opened the first Wal-Mart Super centre in 1988. Wal-Mart include a complete super-market, garden centre, pet shop, pharmacy, tire and lube express, optical centre, photo processing centre, and some additional smaller shops ranging from hair, nail, video, and fast-food outlets. Today thither are over 2,700 supercenters in the US. By 1998 they introduced the Neighbourhood market concept which catapulted them into bonnie the largest US food retailer by 2001.via http//walmartstores.com/FactsNews/FactSheets/By 1991, Wal-Mart began its internationalist elaboration with the doorway of its first store into Mexico. Two years later they formed Wal-Mart International their rapidly growing third division. Today, Wal-Mart has a congeries of 3,859 international locations and operates in Argentina, Brazil, Canada, China, Chile, Costa Rica, El Salvador, Guatemala, Honduras, India, Japan, Mexico, Nicaragua, Puerto Rico, the United States and the United Kingdom. Wal-Mart is resembling a shot planning on expanding their operations in India and China even further. via The bulwark Street JournalSome innovative products and courses Wal-Mart has created stimulate contributed to their popularity and profit business leader. Wal-Mart began its lay to store program in 2007 which offers free shipping or delivery to a local anaesthetic store for purchases on their website walmart.com. via CNET Wal-Marts signage and logo allow recently evolved in 2007 they revise their long time slogan Always Low Prices, Always with the original Save Money Live Better motto.Wal-Marts three B asic Beliefs and set as follows are Respect for the individual, Service to our customers, and striving for Excellence. via http//www.walmartmovie.com/facts.php These long-standing beliefs havent stopped them from becoming the source of some controversy and damaging press over the ancient decade including involvement in multiple lawsuits involving questionable business practices. there have been multiple allegations of sexual discriminatory practices and cases involving unpaid wages.To achieve a greater understanding of Wal-Mart Stores, Inc., it is important to analyze the strengths, weaknesses, opportunities and threats as to what one should birth in their future performance as a come with.PEST epitomeThe way businesses operate is influenced by the wider political, frugal, social and technological milieu. These are normally referred to as PEST promoters PEST is an acronym for political, stinting, social and technological By analysing trends and developments in their busi ness environment, steadys disregard spot new market opportunities and threats.Political doer Wal-Mart is circulating(prenominal)ly operates its operation worldwide. In this operation Wal-Mart make to follow reliable rules and regulation of drove countries. Last year 2009, international operations generated 27.2% of Wal-Marts net sales. via wikiinvest They are facing big challenge from Chinese government and pressure to Wal-Mart to acquire its operation with local firm. Political condition includes political instability, economic condition, currency regulation, legal and regulation constrains, intellectual property rights, tax organisation etc. Wal-Marts international operations have greater impact of host countries law and regulation like Indian government open admittance for foreign investment to operate business acquire with local firm. For Eg, currently, Wal-Mart acquired with Bharati Airtel leadership Telecommunication Company and open new retail store in year 2009 and shut their operation in Ger more and South Korea.Economic factor Economic condition of host countries has greater impact on any business firm. Recently, Wal-Mart facing high inflation rate and currency devaluations. In US, Wal-Mart facing challenge of high interest rate, higher fuel and ability cost, inflation, higher aim of unemployment, higher consumer debt level, unavailability of consumer credit, higher tax rates, economic slow dismantle and other economic factor could adversely shine consume demand of the product or usefulness offering by Wal-Mart.Social factor Wal-Marts international operation should operates according to local enculturation of host countries. It includes population growth, age distribution, career attitude and emphasis on safety. Trend of host countries affect demand of Wal-Marts products and services. via wikipedia.orgTechnological factor nary(prenominal)adays, engine room has a grater impact on any business. This factors includes ecological and environment aspects. Wal-Mart need to invest in Research Development activities, automation, engineering science incentives and respond the rate of technological change for remain in competitive market and No. 1 retailer. Wal-Marts spend huge amount behind continuous new advanced technology upgrade program.PEST analysis helps to wee care influences macro instruction environment and with the help of PEST analysis, firm butt successful examine its strengths, opportunities, weaknesses and threats i.e. gussy up. Wal-Marts SWOT analysis as follows SWOT ANALYSISThe internal and immaterial environment scanning is an important part of the strategic planning process. SWOT is acronym, standing for strengths, weaknesses, opportunities and threats. A SWOT analysis enables an organisation to place itself and its products into perspective. The analysis helps to highlight the main strength and weaknesses of the organisation, together with any external opportunities and threats.SWOT Ana lysisInternal AnalysisExternal AnalysisThreatsOpportunitiesWeaknessesStrengthsStrengthsMarketing candidate Wal-Mart emphasis is on its patsy number everyday low prices and superb quality of products when marketing by using different channels. Wal-Mart is become prize to their competitors by using their expertise core competencies. Wal-Mart involving local communities and they are sponsoring local teams. This is a major competitive advantage Wal-Mart has over the competitors. Wal-Mart has roughly 4000 stores in US. In UK, Wal-Mart takeover Asda on 26 July 1999 for $10.8 billion, internationally it has more than 1300 stores and this name is set to grow dramatically. Wal-Mart has excellent logistic system. They create the ideal one stop shopping have intercourse. Because of conglomeration of its wide product range customers can do one stop shopping products, the typical customer can go into any Wal-Mart and walk out without having to stop at a nonher(prenominal) store for anyth ing that they could need.Management expectation Wal-Marts policies and practices are designed to ensure an environment that is inclusive and equitable. Wal-Mart has 2,100,000 employees including international operation. They provide training on working with people, fit employment opportunities, leading skills, diversity and help to achieve career objectives. Wal-Mart has bulletproof community based initiatives. Corporate structure of Wal-Mart is very advantageously move and managed with core values like respect for the individual, striving for excellence and service to their customers. The management of Wal-Mart is the backbone to the entire firm and these core values have propelled them to the top of their industry. They have allowed Wal-Mart to be worlds largest caller.Finance and Accounting persuasion The company operates nearly 7,873 stores worldwide, with over 3,000 of them in international markets, where the company has grown its front at an average annual rate of 30% between 2005 and 2009. The company focuses on offering the lowest prices crosswise its business segments, which together gain $408 billion in revenue in 2010, a 1% plus from 2009 which is rapidly incr tranquillitys in revenue shows good financial position.Key Figures (via wikiinvest.org) mental processGrowth Rateof Revenueof Operating IncomeSams Club63.7%79.6%Wal-Mart (International)11.7%7.4%Wal Mart (US)24.6%21.7% certain share price$ 53.90Human Resource Aspect Wal-Mart has more than 2.1 million associates or employees worldwide. They provide continuous training to their workforce to run successful business.Production and Operation Aspect Wal-Mart has unafraid distribution system and its cognise as cross docking. They are continuous delivering goods to warehouses and to their stores within in one day. However it gives a faster response to market demands and low level of inventory. This system has allowed them to decrease its sales cost by 2 to 3 % over the industry.Research and development Wal-Marts innovation keeps it a leading retailer in retail industry as it is regularly turning out new patents/proprietary technology. Development and innovation are high at Wal-Mart with regard to their products/services which give ultimate profit.Computer Information system of rules Wal-Mart uses satellite based communications for connecting all the network of stores. Wal-Mart is offering safe, promise and informative complete website where consumer can purchase products easily. Through web-site of Wal-Mart, one can find A to Z information of Wal-Mart.WeaknessesMarketing Aspect One of the biggest marketing weaknesses seems from Wal-Mart lobbying to expand into new market nationally and internationally. There are many areas across the US tried to block the introduction of Wal-Mart because of the economic impact like local stores, traffic and environmental problem. Wal-Mart has a damage reputation because when they move into a new location they end up forcing for opening new stores which is unethical at all. Wal-Mart also shut down its underperforming business in South-Korea and Germany in fiscal year 2007-08.Management Aspect There are fewer females in top management post and few minorities employed. Wal-Mart is lacking equality demand which is not ethical decision for Wal-Mart to be making. They are really hurting their corporate image by maintaining this position in market. There is also lack of union. Because of perception of treating employees poorly, Wal-Mart does not have any union involvement. There is biggest problem is lack of chew over security for associates.Finance and Accounting Aspect RatioProposition meliorate Asset Turnover8.4 %Earnings Per Share3.35 %Average collection point8 %As above ratio are presented weak pay condition. Fix assets turnover ratio present high investment but not being used. The EPS ratio is not good as compare to the industry. The collection ratio presents that Wal-Mart allowing their debtors to ca rry account with above average period of time. It increases the likelihood of non-payment.Human Resource AspectWal-Mart is non-unionized firm. Wal-Mart employees commence at impose wages than unionized corporations. Wal-Mart pays low wages to their employees which affect their standard of living. Wal-Mart is concisely involved in class action suit behalf of formal and current female employees across its US retails and warehouses. These employees totalling to 1.6 million alleged that the company showed sexuality discrimination at the time of pay, promotion, training and job assignment. This is one of the biggest sexuality discrimination cases in the US.Production and operation Aspect Since Wal-Mart sell products across many sectors, it may not have the flexibility of some of its more focused competitors.Research and Development Aspect Wal-Mart is not actively busy in any R D. Specifically, they do not do antecedent research before opening a new store in any new area.Opportunit iesEconomic Aspect When any countrys government absorb foreign investment with new trade agreements, businesses like Wal-Mart have ability to offer products and services. This simply increases the markets available to retailers. Wal-Mart offers all products under private labels. Expanding brand portfolio, Wal-Mart incurs lower operational costs, high quality product and gaining higher margin. Wal-Mart has painful opportunities for future business in expanding consumer market by acquisition, merge with, or form strategic alliances with other global retailers.Social, cultural, demographic and environmental Aspect To fulfil obligation or responsibilities towards social and culture, Wal-Mart announced plans to open in store clinic The Clinic at Wal-Mart to be connect with local hospitals in February 2008. The company could leverage rising health care spending in the US to boost revenues of its pharmacies and health clinics.(c) Political, Legal and Government AspectAsian market is vir tually untapped by the retail world in many extent. It gives huge opportunities to expand business with unlimited and unexpected potential growth and profits.Technological Aspect Nowadays, online shopping is growing stage. To take advantage and experience of internet shopping, customers can easily purchase products by receives friendly site designs, efficient order fulfilment, fast delivery and response. It can help Wal-Mart to make huge revenue.ThreatsEconomic, social, demographic and environmental Aspect Wal-Mart is facing stiff disputation from a large number of companies in the retail market worldwide and local stores. Intense argument could adversely affect the revenues and profitability of Wal-Mart. They subject opposition and resistance from communities by local and international market like small retailer in US and opposition of shopkeepers and retailers on introduction of Wal-Mart in India. Growing opposition to opening new stores from local communities and inlet into i nternational markets is likely to hold back expansion plans of Wal-Mart.Political, Legal and political Aspect Being a global retailer, each firm venture by political problem in the countries where they operate in by nations industrial and general laws, rules and regulations. Like Chinese government does not take kindly open to their country to foreign establishments.Technological As technological change and advances, products being sold today are gone tomorrow this provides fewer products to sell and continuous change with technology update. Thus, Wal-Mart has to update technology as per current demand and upgrading requires high investment.CONCLUSIONWal-Mart is the largest retail firm in the world with strong market position in the US. The companys strong market position in the US provides economies of scale and enhances the brand image to the company. It derived almost 75% of revenue from the US market. However, the company faces stiff competition with local players which can ad versely affect the revenue and profitability of Wal-Mart.In order for Wal-Mart to stay at the top of their game and follow the company strategy and achieve their key policy goals, they are going to have deal better with their stakeholders and make sure they guard their reputation well nevertheless they are criticized by some community groups, womens rights groups, fight union, basic organisations, resistance to union representation and alleged sexism.Key Strengths The key strengths are employees, financial position, customer oriented, one-stop shopping, satisfaction guaranteed programs, employee stock ownership and profit-sharing, well-rounded business, ease of website, good reputation, and favorable access to distribution networks.Key Weaknesses The key weaknesses are some ratios are not sufficient, non-unionization, no formal mission statement, few women and minorities in top management, undifferentiated products and services, site research, slow speed of impediment service, and finally a damaged reputation.Key Opportunities The key opportunities are expansion of business, better segmentation, leverage tech. and financial know-how.Key Threats The key threats are competition, labour unrest, brand loyalty disappearance, supplier backlash affects performance of company.