I.

ABOUT WALMART
II. COUNTRY ATTRACTIVENESS
1. CULTURAL DISTENCE
Cultural distance between Vietnam and Walmart’s home country America can be analyzed using
Hofstede's cultural dimensions framework. One key dimension is "Uncertainty Avoidance," which
looks at how societies handle situations. Another important dimension is "Power Distance," which
examines how power is distributed within institutions.

Power distance: In Vietnam, organizational and cultural standards are strongly embedded with respect
for authority and hierarchical systems. There are obvious differences between individuals in positions of
authority and their subordinates, and rank and seniority are given more weight. Top-down decision-
making methods involve commands being sent from superiors to subordinates with little opportunity for
discussion or involvement. This stands in stark contrast to the more egalitarian communication
approaches and flatter organizational structures frequently observed in American corporations like
Walmart. Within Walmart's culture, open communication and managerial accessibility are frequently
prioritized, with staff members being encouraged to express their thoughts and participate in decision-
making. Overcoming this cultural divide in power relations might be difficult for Walmart to implement
its management style and encourage employee involvement in Vietnam.

Uncertainty Avoidance: Vietnamese society is generally more flexible and accepting of uncertainty
than American society, which is where Walmart first started. In the midst of uncertainty, Vietnamese
culture frequently values adaptability and improvisation, with a readiness to move through murky
circumstances without rigidly adhering to established norms or institutions. This is in contrast to
Walmart's corporate culture, which prefers precise guidelines, protocols, and standardized processes.
Walmart's concentration on predictability and structure may make it difficult to modify its operations in
Vietnam, a country that values flexibility and agility. In order to successfully navigate the cultural
terrain and establish operations in the Vietnamese market, Walmart will need to strike a balance
between its demand for consistency and predictability and the Vietnamese inclination for flexibility and
improvisation.

2. RESOURCES

2.1. Human resource

Vietnam has a large and relatively low-cost labor force, which is one of the key attractions for foreign
investors like Walmart. The labor market in Vietnam is distinguished by a youthful and energetic
working force, with a large proportion of workers in the 15-54 age group. In addition, Vietnam's labor
expenses are often less than those of industrialized countries. To support its retail operations and
corporate expansion, Walmart can invest in building and maintaining a skilled and motivated workforce
in Vietnam.

2.2. Natural resources

Regarding raw materials, Vietnam clearly has an edge. Walmart can access a wide range of materials for
its worldwide supply chain or private label manufacture because of this diversification. Due to Vietnam's
fertile land, skilled workforce, and competitive production costs, raw materials can be sourced at
potentially lower prices compared to other regions.

- Agricultural Products: Coffee, rice, cashews, fruits (mango, dragonfruit), vegetables (spices,
herbs), nuts (macadamia) – ideal for Walmart's global supply chain or private label food
processing.
 - Textiles and Apparel: Cotton, silk, man-made fibers – a potential hub for garment
manufacturing under Walmart's private labels.

Walmart may fortify its supply chain, perhaps lower manufacturing costs, and even become a pioneer in
sustainable sourcing methods by strategically utilizing Vietnam's varied and reasonably priced raw
resources.

2.3. Infrastructure and support industry resources

Transportation and Logistics:Due to significant government expenditures aimed at enhancing the

nation's transportation network, Vietnam's transportation infrastructure has seen a significant transition in
recent years. The government has made major investments in infrastructure, particularly in the areas of
highways, airports, and seaports, as part of its aim to accelerate the nation's economic growth. The
economy has benefited greatly from these investments which have made it possible for businesses to
transport goods and people more effectively while also cutting costs and boosting competitiveness.

Warehousing and Distribution Centers: Vietnam has seen an increase in the establishment of modern
warehousing and distribution centers, particularly in major cities like Ho Chi Minh City and Hanoi. These
facilities provide efficient storage, order fulfillment, and distribution services, which can support
Walmart's supply chain operations.

3. COUNTRY RISK

Vietnam generally offers a peaceful environment for investors, characterized by political stability and a
relatively low level of internal conflict. The country has enjoyed decades of political stability under the
leadership of the government which has implemented policies aimed at promoting economic
development and attracting foreign investment.

3.1 Political risks

There are mainly 3 risks that may affect the performance of business: shareholders’ value, employee’s
exposure, operational exposure.

- Shareholders’ exposure: asset destruction, spoliation, inflexibility.

+ Asset destruction: In some situations, there may be a risk to shareholders' assets in
Vietnam being destroyed. This might involve occurrences like typhoons, floods, or civil
upheaval causing damage or destruction of physical assets like buildings, machinery, or
goods. Vietnam has improved its readiness and reaction to natural disasters, but it is
still susceptible to them, especially in its rural and coastal regions.
+ Asset spoliation: Certain instances might not be publicized extensively, and companies
and shareholders may be exposed to dangers associated with corporate fraud,
disagreements, legal action, and regulatory inquiries. Companies should create internal
controls, engage legal advice, retain appropriate paperwork, audit on a regular basis,
and promote responsibility and openness in order to reduce this risk. In Vietnam's
economic climate, these steps can assist safeguard shareholder interests and lessen the
negative effects of asset spoliation on operations and reputation.
- Employee’s exposure: gangsterism, crime, or kidnapping in Vietnam's workplace is not
commonly reported or considered a prevalent issue. Vietnam generally maintains a safe and
secure environment for businesses and investors, with low crime rates compared to some other
countries in the region.
 - Operational exposure: There aren't many examples of operational vulnerability in Vietnam that
cause disruptions to the market. It is not, however, impervious to internal or foreign shocks that
can cause its markets to collapse. As an instance, the COVID-19 pandemic significantly
affected international markets, especially the Vietnamese market, causing supply chain
interruptions, alterations in consumer behavior, and changes in economic activity. Vietnam may
not experience as many or as severe market disruptions as some other nations, but investors and
companies should nonetheless be on the lookout and ready to adjust to shifting market
circumstances.

3.2 Economical risks

1. Low economic growth:

- Vietnam has enjoyed years of high economic growth, often exceeding 6%. However, due to a
global slowdown, experts predict a decrease to around 4.7% in 2023. This might not be a bad
growth rate compared to others, but it's a significant shift for Vietnam.

2. Economic unstable:

- External Pressures: Global factors like the war in Ukraine and ongoing trade tensions are
creating economic uncertainty worldwide. This can affect foreign investment and disrupt supply
chains, impacting Vietnam's export-reliant economy.
- Domestic Challenges: Issues like high public debt from inefficient state-owned enterprises
(SOEs) and a fragile banking system can also contribute to domestic economic instability.

3. Inflation:

- Rising Costs: The annual inflation rate in Vietnam advanced to 4.4% in April 2024 from 3.97%
in the previous month. It was the highest inflation rate since January 2023, with food prices
rising the most in eight months (4.32% vs 4.05% in March) and also, prices accelerated for
transport due to higher gasoline prices, for clothing, health services, etc. This translates to
higher prices for everyday goods and services in Vietnam, putting pressure on household
budgets and potentially reducing consumer spending.

4. Input Costs:

- Global Squeeze: The cost of raw materials and components used in manufacturing, often
imported, has increased due to global factors. This puts pressure on Vietnamese businesses,
especially exporters, who may struggle to maintain profit margins.

5. Exchange Rate:

- A Strong Dollar: The price of USD on the date of 9/5/2024 increased in the global market, the
USD-Index rose by 0.2 points to 105.5 points. The USD strengthened in the past trading session
as investors bet on the US economy outperforming other economies. The US dollar's rise
weakens Vietnam's currency, the VND. This makes imports more expensive (as discussed
above) and can discourage foreign investment.
- Central Bank Balancing Act: The Vietnamese central bank needs to manage the exchange rate
to control inflation but also avoid discouraging exports, a crucial part of the economy.

3.3 Competitive risks:

In Vietnam, the rate of corruption remains at a relatively high rate, 45.6% in 2022 on the scale from 0-
100 where 0 is absolute corruption and 100 is no perception of government corruption according to
World Economics. Corruption messes up how markets work, making it harder for everyone to compete
fairly and scaring away investors. When there's a lot of corruption, it's tough for the economy to grow
and get better, because people spend more time trying to get around the corruption than actually getting
work done.

Yet, Vietnam’s government has been making a strong push against corruption in recent years and there
are seemingly no cartels in the Vietnamese retailing industry for Walmart to consider facing at the
moment. However, there are still many competitors in the country. Established players like Saigon
Co.op and Big C in the supermarket sector, The Gioi Di Dong and WinMart in the convenience store
space, and Lotte Mart in the discount arena would be formidable rivals. Walmart would also need to
contend with e-commerce giants like Shopee and the enduring presence of traditional wet markets to
make a name for itself here.

3.4 Operational risks:

Coming to Vietnam’s market, Walmart might have to face certain regulations that protect local goods
and in return, receive government incentives. As a foreign investor, Walmart will be subject to the
Trade Remedies law which ensures a level playing field for both domestic and foreign investors,
providing a favorable environment for foreign investment, the same as first comers like Big C. While it
seems to give fairness and equality in the market, Walmart might face increased competition from
domestic players who have a better understanding of the local market and consumer preferences. This
could make it harder for Walmart to gain market share and establish a strong foothold in Vietnam,
especially if domestic competitors have already built strong brand loyalty among consumers.

III. Incentives
- Taxes:
+ Corporate Income Tax (CIT): Vietnam offers preferential tax rates (reduced tax rates)
and tax holidays (tax exemptions) to both foreign and local investors. These incentives
are granted to promote investment in sectors aligned with national development
strategies. The CIT incentives can apply for a certain period or throughout the project
execution1.
+ Import Duties: Exemption or reduction of import duties or tax on goods imported as
fixed assets, raw materials, supplies, and parts used for the project.
+ Land Rent and Levies: Exemption or reduction of land rents and land levies.
- Foreign Direct Investment (FDI):
+ Investment projects in certain sectors are encouraged. These include:
● High-Tech: Information technology, biotechnology, new material technology,
automation technology, and supporting products for high technology.
● Large-Scale Manufacturing: Projects with a minimum invested capital of VND
6,000 billion (with annual revenues of VND 10,000 billion by the fourth year or
employment of at least 3,000 workers).
● Social Importance Sectors: Education, vocational training, healthcare, culture,
sports, and environmental projects.
- Subsidies
+ Corporate Income Tax (CIT) Incentives:
● 10% CIT for 15 years.
● CIT exemption for 4 years.
● 50% reduction on payable CIT for 9 years.
- Land rental:

Investment projects are given a land rental fee exemption in encouraged sectors or certain
business fields, varied from 3, 7, 11, 15 years of exemption or exemption for the whole
operational period depending on particularly difficult socio-economic conditions.
IV. ENTRY
1. FIRM ANALYSIS:
1.1. Vision and mission statement:

“Save money, live better.”

“Be THE destination for customers to save money, no matter how they want to shop.”

The company’s vision is to be the first choice for customers who are looking to save money, no matter
how they choose to shop. Rather than being a statement, this proved to be a guiding principle that
shapes every decision the company makes. It reflects Walmart’s commitment to understanding and
meeting the primary needs of its customers. The “no matter how they want to shop” also implies
flexibility. Whether customers choose to shop in-store or online, Walmart aims to be their go-to
destination for savings. This vision is not limited to just products and prices but extends to the overall
shopping experience. Walmart strives to provide a seamless and convenient shopping experience,
whether customers are in a physical store or browsing online.

This vision also underscores Walmart’s dedication to its customers. The company is committed to
understanding the needs and wants of its customers and strives to meet these needs in the best possible
way. This customer-centric approach is evident in everything Walmart does, from the products it offers
to the way it interacts with its customers. In the past, Walmart’s vision was to be the best retailer in the
hearts and minds of consumers and employees. While this vision served the company well, it evolved to
reflect the changing retail landscape and the evolving needs of its customers. The current vision,
focused on being the preferred shopping destination for customers seeking to economize, is a testament
to Walmart’s adaptability and its commitment to staying relevant in a rapidly changing retail
environment.

Walmart’s vision is not just about being the biggest or the most profitable retailer. It’s about making a
difference in the lives of its customers by providing them with affordable, high-quality products and a
convenient shopping experience. It’s about helping customers save money so they can live better. This
vision is what drives Walmart and sets it apart in the competitive retail landscape. It is also the principle
that guides the company’s decisions and actions, ensuring that it remains focused on its mission of
helping customers live better.

Walmart’s statements did receive criticism, however, for being more like a slogan than a clear
articulation of the company’s purpose. There are also arguments on the negative economic impact and
concerns about wages. These criticisms highlight the importance of having a well-defined and
comprehensive mission and vision that not only guide a company’s strategies but also consider the
welfare of all stakeholders, including employees and the communities in which the company operates.

1.2. Core value:

“The three cardinal beliefs Wal-Mart’s founder relied on for attracting and keeping customers were:
providing great customer service, showing respect for the individual and striving for excellence. These
beliefs were translated into ten specific business rules that he tried to implant into the heart of every
executive, manager and associate.”

SAM’S TEN RULES:

1. Commit to your business
 2. Share your profits with all your associates, and treat them as partners
3. Motivate your partners
4. Communicate everything you possibly can to your partners
5. Appreciate everything your associates do for the business
6. Celebrate your success
7. Listen to everybody in your company
8. Exceed your customers’ expectations
9. Control your expenses better than your competition
10. Swim upstream

Walmart places a high emphasis on customer service, or simply put, to give customers what they want,
at the lowest price possible, in the most pleasurable environment. The company is dedicated to
providing exceptional shopping experience, always putting the customer’s needs first and striving to
exceed their expectations. This value is not just about meeting the customer’s needs, it’s about going
above and beyond to ensure customer satisfaction. Since the early days of operation, Walmart
understood the vital importance of customers and made immense effort to ensure their return, by
providing economical value and granting comfortability to their customers.

The father of the US retail giant - Sam Walton - also stressed the value in treating all individuals with
respect, whether they are customers, employees, or partners. This value underscores the importance of
diversity and inclusion, and it fosters a culture where everyone is treated with dignity and respect.
Along with this, the company is committed to continuous improvement and innovation. This value
encourages employees to learn, grow, and strive for excellence in everything they do, which fosters a
culture of high performance and continuous improvement.

Walmart’s core values are the guiding principles that shape the company’s culture and influence its
strategies. They are integral to Walmart’s mission of saving people money so they can live better. These
values guide how Walmart operates and interacts with its customers, employees, and communities,
ensuring that the company stays true to its statements and preserve its ways of doing business.

1.3. Positioning:

“Always Low Prices. Always.”

Walmart has positioned itself as a retailer that offers the convenience of one-stop shopping for everyday
products at the lowest possible price. This positioning is primarily targeted towards price-sensitive
customers. The company’s operational excellence, inventory management, and logistics infrastructure
enable it to maintain this positioning. Walmart also uses a mono-segment type of positioning, appealing
to a single customer segment that places greater value on the price attribute of products compared to
other attributes. Due to its low price positioning, Walmart has had a significant impact on several
smaller retailers over the decades of its operations.

In the dynamic landscape of retail, Walmart is transitioning to an omnichannel marketplace, leveraging

its presence through an extensive network of stores, and drawing customers in with the old-aged
promise of Everyday Low Prices (EDLP). The company is also building strength via its emerging
digital operating model, utilizing online platforms and e-commerce to reach a broader audience.
Walmart seeks to combine low prices, taking up any methods to cut costs, whilst providing a wide
range of products, and ensuring convenience for its customers. This strategy has been effective in
establishing Walmart as a dominant player in the retail industry. However, it’s important to note that
this positioning also comes with its own set of challenges and criticisms, particularly in terms of its
impact on smaller retailers and local communities.

“To avoid head-on competition with giants such as Sears and Woolworths which dominated big cities,
Walton opened stores in “one-horse”, rural, backwater towns ignored by other retailers. The stores
aimed to serve customers who, up until then, had to travel long distances to save money. Now they
could buy the same goods cheaply at home. This positioning proved to be critical to Wal-Mart’s success
in the years to come as it grew outside competitors’ radar screens to a substantial size to command
economies of scale.” - Walmart Stores: “Everyday Low Prices” in China

1.4. Value chain:

Walmart has a value chain that is a testament to its operational efficiency and effectiveness, which
comprises primary and support activities:
- Logistics and Operations: Walmart owns an optimized and enhanced logistics and procurement
system that allows full and real-time tracking of transportation and transactions to ensure that
the right products are available at the right time. This system also involves interactions with its
suppliers. Additionally, the system is a tool to manage the supply chain and Walmart’s
extensive network of stores.
- Marketing, Sales and Service: Walmart’s marketing and sales activities focus on promoting its
value proposition of low prices and enhancing customer relationships. Customer service
involves all activities required to maintain the product or service’s effectiveness for the buyer
after it is sold and delivered. Walmart strives to provide excellent customer service to enhance
customer satisfaction and loyalty.
- Other supporting activities: Include investment in infrastructure, human resources management
and technology. These acts are vital especially in the new era for Walmart to adapt and retain its
competitiveness long-term.

1.5. Business model:

The cornerstone of Walmart’s business model is its commitment to offering products at the lowest
possible prices. This value proposition is achieved through efficient supply chain management,
economies of scale, and operational efficiencies. Walmart’s ability to procure goods at a lower cost than
its competitors allows it to pass on these savings to its customers, thereby reinforcing its position as a
price leader. Another key component of Walmart’s business model is its focus on providing customers
with convenient access to a wide range of products. With a vast network of physical stores and a
growing online presence, Walmart ensures that customers can shop for their needs whenever and
wherever they want. This convenience, coupled with low prices, enhances the overall shopping
experience and encourages customer loyalty.

Walmart also differentiates itself through the wide assortment of products it offers. From groceries to
electronics, clothing, and more, Walmart caters to a broad customer base with diverse needs. This wide
assortment not only attracts more customers but also increases the chances of cross-selling and up-
selling, thereby driving revenue growth.Walmart’s operations are divided into three main segments:
Walmart in the U.S., Walmart International, and Sam’s Club. Each segment contributes to the
company’s overall revenue and plays a unique role in its growth strategy. For instance, while Walmart
in the U.S. focuses on maintaining its leadership position in the domestic market, Walmart International
is tasked with expanding the company’s footprint in global markets.

1.6. Strategic objectives: (maybe skip)

1.7. Key partnership:

Partnerships also play a crucial role in Walmart’s business model. The company works with various
partners, including suppliers and technology companies, to support its operations. These partnerships
not only enhance Walmart’s operational capabilities but also enable it to offer a wider range of products
and services to its customers. Some key cooperators include
- Flipkart and Rakuten, which are results of Walmart’s attempt to further upgrade its e-commerce
capabilities and overseas expansion.
- Plug Power Inc Plug Power, a leading developer of hydrogen fuel cell technology, assisted
Walmart to refine its technology and install it on a mass scale.
- Proctor & Gamble is one of Walmart’s key suppliers of consumer goods.

1.8. Competitive advantage:

“The secret of success lay in a unique combination of culture and strategies at Wal-Mart that set it apart
from its competition.”

- Optimal costs: Walmart’s primary competitive advantage is its ability to offer customers low
prices. The company achieves this through efficiency at scale, logistics expertise, private labels,
and purchasing power.
- Adaptation: Since the first years Walmart has been a fast mover among its competitors in
adopting digital trends like barcode, RFID, and cross-checking supply chain strategy. This has
given Walmart an edge in the increasingly digital retail landscape. Later generations of the firm
also invest heavily in IT and data analytics, along with improving logistics operations.
- Private labels: Walmart earns higher margins on its popular private brands like Great Value,
Member’s Mark, Marketside, Freshness Guaranteed, Ol’ Roy, Parents Choice which brings the
ability to offer national brands at low prices.

Walmart Mission Statement - Strategic Management Insight

Walmart’s Mission Statement, Vision Statement & Strategies - Panmore Institute
Walmart’s Competitive Advantages: The Keys to Retail Dominance - 33rd Square
Walmart Mission and Vision Statement Analysis | EdrawMind
Walmart Segmentation, Targeting and Positioning - Research-Methodology
Walmart's Rise: Powering Global Retail Dominance (vstar.com)
https://businessmodelanalyst.com/walmart-business-model/#Walmarts_SWOT_Analysis
https://dollarmakers.com/who-are-walmarts-joint-venture-partners/
2. Market analysis.
2.1. PESTEL
2.1.1. Political factors:
- Government policies and regulations
- Political stability
-
2.1.2. Economic factors:
-
2.1.3. Socio-Cultural factors:
2.1.4. Technological factors:
2.1.5. Legal factors:
2.1.6. Environmental factors:

2.2. 5 FORCES ANALYSIS

2.2.1. Threat of New Entrants (Low):
- Economies of scale: with the existence of giants such as Walmart, Amazon, Aeon,
Costco Wholesale, Alibaba Holding,... These enterprises have economies of scale
which result in their average cost being much lower due to the production of items in
large scales.
- High Capital Investment: new entrants have to invest an enormous amount of money
for marketing, sales, distribution and also product development which is a barrier to
penetration in the market.
2.2.2 Bargaining power of buyers (Medium):
- Large number of buyers: according to 2022 data, Vietnam's population was about
98,2 million people including 38,1 million people living in urban areas. They are
potential customers for the retail industry. Therefore, Buyers bargaining power causes
a weak pressure imposing in this industry.
- Switching cost: due to the diversity of substitutes, the difference in promotion
programs, the geographical location and poor loyalty towards brand; customers can
easily switch from one brand to another.
2.2.3. Threat of substitutes (Non)
 -
2.2.4. Bargaining power of suppliers (Very Low)
- Large number of suppliers: Walmart’s supply network consists of over 100000
suppliers globally. Specifically in Vietnam market, there are various foreign and
domestic suppliers for many kinds of products such as apparel, supplements, skincare,
beverages, and cleaning.
- Uniqueness: Each kind of product has its alternative products. For instance, there are
tons of soft drinks companies namely The Coca-Cola, Pepsico, URC Vietnam. Many
products of each company have some similarities such as Pepsi and Original Coke,
Pepsi light and Coca Cola Zero. Similarities between products reduce suppliers
bargaining power.
2.2.5. Rivalry among existing competitors (High)
- The number of competitors: Vietnam retail market is very dynamic. There are
numerous retail chains and supermarkets in Vietnam, ranging from small-scale grocery
stores and convenience stores to large-scale like supermarkets and malls. Typical
examples of grocery stores and convenience stores are GS25, Ministop, Circle-K, 7-
Eleven and Bach Hoa Xanh. Besides, Aeon Mall, Emart, Co.opmart, Big C and Lotte
Mart are prominent names in the large-scale retail sector. This would cause some
difficulties in entering new markets and taking market share.
- Similarities in what's offered: Almost all retail stores sell same kind of products, have
same ways of payment with nearly same price for a same product. This creates
difficulties in building customer loyalty.
- Industry growth: VIetnam retail industry has grown significantly in recent years. With
a rising in middle class, increasing urbanization and changing consumer preferences,
the demand for retail goods and services has surged
https://365financialanalyst.com/knowledge-hub/business-analysis-and-strategy/porters-5-
forces-analysis-of-walmart-a-practical-example/https://www.portersfiveforces.org/walmart-
porters-five-forces/

2.3. S.W.O.T
Internal:
2.3.1. Strengths:
- Strong Brand Recognition:
One of Walmart's biggest advantages as a business is the awareness of its brand. Without a
doubt, one of the biggest retail companies in the world is Walmart. Being a pioneer in the
industry, the firm has put a lot of effort into being well-known through persistent marketing
and advertising efforts. Walmart's logo, tagline, and other brand identification elements are
widely recognizable and have come to represent affordable pricing and convenience globally.
Walmart is known for its low costs, but it also offers a large variety of goods in a number of
categories, including apparel, electronics, and food.
- Efficient Supply Chain Management:
Walmart's supply chain management plays a significant role in its performance as well. The
coordination and management of all processes involved in the manufacture and delivery of
products and services, from the procurement of raw materials to the delivery of the completed
product to the client, is referred to as supply chain management. Effective supply chain
management is a vital component of Walmart's competitive advantage, since it guarantees the
company's ability to provide customers with premium goods at affordable rates.
- Diverse Revenue Streams:
Walmart is a hypermarket, thus despite the quickly shifting business landscape, the corporation
has a variety of income streams that provide it stability and flexibility. Walmart sells a variety
of commodities, such as home goods, electronics, apparel, food, and more. Walmart's wide
range of product offerings enable it to appeal to a wide range of consumers, which contributes
to the stability and predictability of the company's income streams.
- Economies of Scale:
The cost benefits that a business might obtain by expanding its production or operational scale
are known as economies of scale. Economies of scale are very beneficial to Walmart, one of
the biggest retailers in the world, because they enable the business to sell goods at cheaper
costs than its rivals while still turning a profit.
- Strong Customer Base:
With its stores spread across several nations, Walmart is a global retail behemoth with millions
of satisfied customers. North America is where Walmart has the largest client base. In 2016,
ninety-five percent of American shoppers either shopped at one of Walmart's many locations
across the country or on its website. A single Walmart supercenter in the United States of
America serves 10,000 consumers on average per day, according to Zippia. Walmart's
competitive edge stems from its robust client base, which also plays a major role in the
company's performance.
2.3.2. Weaknesses:
- Overdependence on the U.S. Market:
Walmart still receives a significant portion of its revenue from the US market despite its global
development. Approximately 10,500 Walmart locations can be found worldwide. Of Walmart's
stores, 4,648 are situated in the United States. Walmart is susceptible to shifts in the American
economy due to its excessive reliance on the domestic market. Walmart's revenue is mostly
derived from the US market, thus any slowdown or recession there has the potential to have a
big effect on the company's financial results. A prime illustration of this occurred during the
global financial crisis of 2008. Walmart's earnings and sales were not immune to the negative
consequences of the American economic crisis.
- Labor Practices:
Walmart employs more than 2 million people, making it the largest private employer in the
world, yet its labor policies have long been the focus of debate and criticism. The business has
been charged with mistreating workers, which has raised various worries about worker safety
and brought Walmart bad press.
- Limited E-commerce Presence:
In addition to its extensive global network of physical locations, Walmart has recently made
large investments in e-commerce. However, because it currently trails behind other rivals in
this market, the company's e-commerce growth is restricted. Many of Walmart's rivals,
including Amazon and Alibaba, have developed strong online stores with a large selection of
goods and services. Customers may shop with ease from any location at any time thanks to
these platforms, which is a big benefit in the current market. Walmart's e-commerce platform
remains relatively tiny as compared to its competitors, which may provide a competitive
disadvantage for the corporation.
- Inconsistent Customer Service:
Walmart's operation of hypermarkets has drawn criticism due to its poor customer service,
characterized by lengthy wait times, disorganized stores, and challenges in locating
merchandise. This outcome is a direct consequence of inadequate training, insufficient
remuneration, and other related factors. Insufficient training and support for employees can
hinder their ability to deliver consistent and excellent customer service. This might result in
employee discontent and dissatisfaction, which can have a negative impact on their job
performance and overall morale. This can have a detrimental influence on both the
organization and its customers.
- Thin Profit Margins:
Walmart is well-known for offering affordable products to its patrons. Although this is a
strength that helps the business draw in new clients and keep hold of current ones, it is also a
vulnerability. Walmart may have narrow profit margins as a result of its cost leadership
approach. Walmart just generates extremely little money on each item sold due to its narrow
profit margin. This is a result of the company's extremely low profit margins stemming from its
branding strategy of maintaining the lowest feasible costs. Walmart's profitability may be
impacted by the need to sell a lot of things in order to turn a profit. Walmart's low pricing is
also a weakness since they are susceptible to changes in the state of the world economy.
Walmart's profit margins will be harmed if labor or raw material costs rise.
External
2.3.3. Opportunities:
- Global Expansion:
Walmart is the biggest retailer in the world, with more than 10,000 locations in about 27
countries. Nonetheless, there is still room for the business to grow into other areas. Walmart
has a great opportunity to grow internationally since it can enter new countries, diversify its
sources of income, and attract more customers. Entering new overseas markets will benefit
Walmart in a number of ways.
- E-commerce Growth:
Global retail e-commerce sales are expected to surpass US$ 7 billion, indicating the e-
commerce industry's strong expansion. The COVID-19 epidemic is among the many causes
that have expedited the shift to online buying, creating a wealth of potential for businesses in
the e-commerce sector. Walmart may gain a substantial portion of this market by utilizing its
current advantages and making investments in its online storefront.
- Demand for Environmental Friendly Products:
Demand for sustainable and eco-friendly products is rising as people get more aware of
environmental issues. Walmart may take advantage of this by publicizing its eco-friendly
policies and providing a large selection of sustainable products. Walmart's sustainability
initiatives have already yielded notable results. The corporation has set aggressive targets to
boost the usage of renewable energy sources in its operations and lower its greenhouse gas
emissions. Walmart, a prominent retailer, can, nevertheless, step up its efforts to enhance its
reputation and appeal to a wider spectrum of customers.
- Diversification:
Walmart should think about diversifying into related industries like healthcare and financial
services as a major chance to further increase its business as the retail market continues to
change. Walmart can increase the range of products it offers in these new markets even if it is
currently involved in some of these categories.
- Technological Advancements:
One of the most important aspects of Walmart's growth strategy is technological advancement.
In order to streamline operations and boost customer satisfaction, the corporation has already
made large investments in technology, including machine learning, artificial intelligence, and
data analytics. Walmart can still improve its operations, customer experience, and online
presence by utilizing technological advancements.
2.3.4. Threats:
- Intense competition:
Due to the numerous big and small companies fighting for market share, the retail sector is
extremely competitive. Several major shops, such as Amazon, Target, and Costco, compete
with Walmart. Walmart finds it difficult to compete with these shops as they have substantial
resources and a strong web presence. Walmart's profits is at risk since this gives shoppers more
options.
- Economic Downturns:
A major risk to Walmart's operations is fluctuations in customer spending and economic
downturns. Consumer spending tends to decline and price sensitivity increases during
economic downturns. Walmart may see a decline in sales and revenue as a result of this.
Furthermore, shoppers may be more likely to shop at discount stores or buy cheaper goods
during economic downturns, which might put Walmart under additional competition.
- Changing Consumer Preferences:
The Walmart Business Model has additional challenges due to the dynamic nature of consumer
preferences and buying behaviors. A variety of factors, including alterations in society ideals,
technological improvements, and economic fluctuations, can influence changes in consumer
preferences. For instance, customers' awareness of ethical corporate practices and
environmental sustainability has grown in recent years. Consequently, even if it takes shelling
out more money, consumers could be more likely to purchase at establishments that uphold
these ideals. Consequently, if Walmart is unaware of these shifting preferences, they risk losing
a lot of business.
- Increasing Regulatory Scrutiny:
One of Walmart's biggest obstacles is the growing regulatory scrutiny given by different
countries because the company is bound by the rules of the nations in which it conducts
business. Governments all throughout the world are growing more and more concerned about
the sway and power that big businesses like Walmart have. They have therefore implemented a
number of laws intended to safeguard consumers and advance just competition. Governments
may, for instance, apply taxes, tariffs, or other rules that make it more challenging for Walmart
to conduct business in a given area.
- Litigation:
The act of pursuing legal action is referred to as litigation. Walmart faces up to 5000 lawsuits
annually, with roughly 20 cases every day. It is common for customers, governmental
organizations, and even Walmart personnel to file these claims. Walmart is a major
international firm that faces many legal dangers, thus lawsuits are nothing new to it.
Intellectual property conflicts, product liability lawsuits, and employment issues are just a few
of the potential causes of these hazards. Nonetheless, Walmart may be impacted by these
claims in a number of ways.
https://businessmodelanalyst.com/walmart-swot-analysis/#Walmart_Strengths

III. Implementation analysis.

Walmart, one the the most renowned retail giants came from USA, has seen Vietnam not only
as a good supply center in Asia but also a promising market for it to expand. The strategic
solutions that appear to be the most appropriate for Walmart to enter this new market are:

1. Joint Ventures.

What? Joining in a business arrangement with another local retail company.

When? After finding a company/ party agrees to cooperate.

Where? Stores and supermarkets of the party.

Whom? Those retail companies that have similarities to Walmart.

How? Walmart formed an alliance with a local retail company and both brought their strengths
to the joint venture. Walmart provides financial support, its globally recognized trademark and
experiences in information and distribution management to manage its partner’s stores and
supermarkets. If the strategy is successful, Walmart will introduce its own brand to Vietnam
later on.

Pros: A joint venture can help Walmart gain access to new geographic markets which provide
cost-effectiveness and also to another company’s customer base. Besides, both the companies
can combine expertise and their diverse pool of resources such as suppliers, manpower,…

Cons: There will be high potential for conflicts during the cooperation within the holding
company and the local one about cultures and management styles. The exclusivity of joint
ventures can affect individual partner growth because of the clauses/concessions about interest.

2. Wholly owned subsidiary: Greenfield venture.

What? Setting up a new operation in Vietnam with 100% investment from the holding
company.

When? After having a place of business whether by itself or through any of the agents.
Where? Walmart’s stores.

Whom? Middle class demographics, rural families, …

How? Walmart imports products from international suppliers, uses products also from
international brands but produced in Vietnam or from domestic suppliers to supply the stores.
Walmart also built a logistic and managing system from warehouses and distribution centers to
the stores.

Pros: This strategy gives Walmart the highest level of control over business operations,
manufacturing quality, brand image, staffing and sale of products. By setting up wholly-owned
subsidiaries, Walmart can protect their vision and core value from those region-specific
conditions.

Cons: This strategy requires higher setup costs due to additional cost for researching the
market, managing supply chains, branding and staffing. There are challenges from government
regulations that hamper direct investment like this from a foreign company like Walmart.

3. Acquisition.

What? Purchasing either a portion or all of another retail company’s shares.

When? After finding a company/party that is suitable with Walmart’s system.

Where? Stores and supermarkets.

Whom? Middle class demographics, rural families, …

How? Walmart investigates and values promising targets. After the company is selected, it’s
time for the negotiation. If both companies reach an agreement, the integration of them is
necessary due to differences in many aspects: culture, information systems, strategies,…

Pros: The biggest advantage of this strategy is tax benefit by making full use of tax-shields,
boost financial leverage and take advantage of alternative tax benefits.

Cons: Walmart will face difficulties in managing staff of the united companies which easily
lead to frictions and internal conflicts. In addition, merging two firms with similar activities
means duplication and over capability.

IV. Entry mode.

Wholly owned subsidiaries strategy chart:

Branding factor: Wholly owned subsidiaries strategy helps Walmart bring their brand directly
into the Vietnamese market, build a strong brand identity to differentiate themself from other
competitors more effectively than the other two options.

Low Expense: A wholly owned subsidiary can be costly to establish and maintain from the
financial point of view. Cost of physical presence, legal and administrative fees has to be
considered when Walmart joins an unfamiliar market like Vietnam.

Customer Satisfaction: Wholly owned subsidiary strategy can provide local expertise and
insights into the new market. This helps Walmart decide the appropriate marketing campaigns
to organize, the right products/services to target to win the customer goodwill.

Controllable/Management: Since the holding company has complete control over the
subsidiary’s operations, Walmart can make decisions about overall company matters and
strategies. This avoids the conflicts that can be met during cooperating or partying.

Low risk: There are many risks that Walmart has to deal with while choosing this strategy. The
risk of investment funds, loss of brand equity, customer attitude towards the brand are some to
name.

Quick: Establishing a wholly owned subsidiary requires considerations and preparations which
take a lot of time. This strategy needs a longer process to make it work out than the other two
options.