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SWOT and PEST Analysis of Wal-Mart

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Introduction

Wal-Mart is an international store that offers working families with the items they require

at prices which are quite competitive. In each of their worldwide markets, they make use of their

strengths as a worldwide corporation to meet the regional needs of their consumers, and offer

assistance to communities through their corporate social responsibility drives. The PEST

(political, economic, social and technological) and SWOT (strength, weakness, opportunity and

threat) analysis of Wal-Mart store forms the basis of this discussion.

Strength

Wal-Mart is the largest wholesaler in the globe. It was ranked number one in 2011 by

Fortune 500, among the largest companies in America (DATAMONITOR, 2011). The wide

spread of its operations is exceptional and there is no comparable competitor of such size. It has

been increasing its influence in international operations. By it being a market leader, it is capable

of replicating its best strategies regularly on an unrivaled scale across the globe.

Wal-Mart’s market dominance leads to advantageous terms on everything ranging from

the goods on its shelves to stock leases. This competitive advantage has generated its positive

economic proceeds and market share advantages.

On the other hand, Wal-Mart stores provide a large variety of generally known products.

Additionally, it provides personal label retail across a number of categories, which comprise of

entertainment, grocery, home wares and apparel.

Moreover, its dominant position and the variety of products that it offers permit it to

quickly vary its products. This enables it reap the benefits of economies of scale. For instance, by

shifting floor space share, Wal-Mart can gain from low-income customers’ growing wish for

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consumable staples as an alternative of discretionary items. This sort of flexibility and influence

enables it to maintain its marketplace position.

Weaknesses

Wal-Mart is a big box vendor and runs supercenters which necessitate large area for

every new stock. This limits its expansion in urban places where the space available is limited.

Studies show that store sales at Wal-Mart in America have reduced for eight repeated quarters

due to its market place space limitations and costs. Thus, it has become more crucial for Wal-

Mart to come up with a new set up that accommodates its limitations and which is more apt to

the urban areas. This is because its competitors like Costco and Tesco are also aiming to come up

with new workable setups. Therefore, if they manage to be successful then Wal-Mart will have a

competitive disadvantage.

Opportunities

Wal-Mart has been increasing its existence in a number of developing economies like

Mexico, South Africa and Brazil. These economies have been described as some of the fasting

growing economies in the globe. By establishing in these places, thus, Wal-Mart is guarantee on

increased volume of sales as time progresses.

Threats

There has been a high increase of employees which indicates a possibility of increase in

payroll expense and health care benefit expenses. The labor expenses for corporations in the

United States have been increasing as the health care charges and wages rose in the recent times.

According to business estimates, health care prices for the US workers are estimated to rise by 8

percent in 2010 and 8.5 percent in 2012. The rise in medical charges continues to outdo inflation

and pay rise (Big Lots, 2008).

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One of the basic drivers that are likely to cause the rise in medical charges in 2012 is that,

employees are worried about losing their positions and possibly their health cover. Thus, they

make use of their health care excessively while they still contain it.

PEST Analysis for Walmart

PEST analysis presents an evaluation of macroeconomic framework that affects a

particular industry or firm.

Currently, the understanding of continuously changing environment, technology, and

competition compels Wal-Mart to think strategically and to decide pretty fast. Its strategic plans

take the place of long term plans.

Wal-Mart has been at times subjected to political actions and law suits. For instance, it

has been subjected to the law suit for gender and racial discrimination.

In the economic side of it, the US has its plan to moderate the increase of supercenters in

order to leverage capital assets through a plan which is designed to increase returns and sales in

U.S. stores. On the part of social analysis, consumers in US who want one stop service go to

Wal-Mart as their first choice.

Wal-Mart retail uses modern technologies for the core purpose of marketing. This is

because in the recent business situations adopting the modern marketing strategies is essential.

For instance, reliance on the internet and social media for advertising and selling is vital for the

company’s development. Similarly, technology is among the foremost concerns on the agenda of

marketing in Wal-Mart as this leads to productivity, creativity, and sustainability.

In conclusion, this paper has discussed more about the SWOT and PEST analysis of Wal-

Mart Company. Under the SWOT analysis the strengths, weakness, opportunities and threats

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have been discussed. On the other hand, on the PEST analysis the political, economic, social and

technological factors have been discussed.

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Bibliography

Big Lots, Inc. SWOT Analysis." Big Lots, Inc. SWOT Analysis (June 2008): 1.

DATAMONITOR: Wal-Mart Stores. Wal-Mart Stores. SWOT Analysis (August 2011): 1-13.

Goode, Adam S. Wal-Mart: a case study in innovation and change. Consortium Journal Of

Hospitality & Tourism 13, no. 2 (January 2009): 49-60.