SWOT Analysis of Walmart:
Strengths:
1. Strong Brand Recognition: Walmart’s strength lies in
its widely recognized and trusted brand, fostering
consumer confidence and loyalty.
2. Diverse Revenue Stream: The company’s adaptability
is evident through a diverse revenue stream, navigating
various markets and industries to maintain financial
resilience. Per Walmart’s Q3 FY23 Earnings, a breakdown
of walmart’s income can be recognised through its Sam’s
Club membership sales (Up by 7.2%), Walmart U.S Comp
Sales (Up 4.9%), Walmart U.S. eCommerce (up by 24%),
and Walmart International sales (up by 5.4%).
3. Economies of Scale: Walmart leverages its extensive
size for economies of scale shown by its strong revenue
growth of 5.3% per 2022 and 2023 consolidated Income
statement, enabling cost advantages in procurement,
operations, and overall efficiency.
4. Strong Customer Base: With a vast and loyal customer
base, Walmart establishes a robust foundation in the
retail sector, emphasizing customer retention and
sustained business growth as per market share stat of
60% shown on the Market retail/wholesale industry
dominated by Walmart.
Weaknesses:
1. Labor Relations: Walmart has faced criticism for labor
practices, including low wages and labor disputes.
2. E-commerce Competition: Despite significant strides,
Walmart faces intense competition from e-commerce
giants (e.g, amazon, eBay), impacting its online market
share.
3. Over Reliance on US Market: A substantial portion of
Walmart’s revenue is generated in the United States,
making it vulnerable to domestic economic fluctuations.
4. Inconsistent customer service: represents a weakness
in Walmart’s SWOT analysis, as variations in service
quality across different locations may impact the overall
customer experience, potentially leading to customer
dissatisfaction and diminished brand perception.
Opportunities:
1. E-commerce Expansion: Further growth in the online
market allows Walmart to capitalize on changing
consumer shopping habits.
2. International Expansion: Targeting untapped markets
presents opportunities for global revenue diversification.
3. Health and Wellness Market: The growing trend
towards health-conscious living provides avenues for
expansion in the health and wellness sector. Increased
understanding of customer journeys in these niches is key
to begin to build stickiness effects.
4. Technological Innovations: Embracing cutting-edge
technologies can enhance customer experience and
operational efficiency through a growing Omnichannel
marketplace. It is vital to master data science and begin
to leverage AI in the battle to understand consumer
behaviors and deliver a remarkable experience.
Threats:
1. Competition: Intense competition from traditional
retailers and e-commerce platforms poses a threat to
Walmart’s market share such as Costco, Target and
Amazon.
2. Regulatory Challenges: Changes in regulations,
especially related to labor and trade, can impact
Walmart’s operations and costs. One such example is the
metrics shown per Walmart’s ethics & compliance code of
conduct aligning to regulatory challenges in culture, work
safety, risk mitigation and more.
3. Economic Downturns: Economic uncertainties and
recessions may lead to reduced consumer spending,
affecting Walmart’s revenue.
4. Supply Chain Disruptions: External factors like natural
disasters or geopolitical events can disrupt the global
supply chain, impacting product availability and costs.
Such threats are specifically addressed by Walmart’s
Enterprise Resilience Planning Team.
