walmart swot analysis 2018

WAL-MART STORES, INC.

SWOT ANALYSIS 2018

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ABOUT WALMART

Name Wal-Mart Stores, Inc.

Logo

Industries served Retail (discount department stores and warehouse stores)

Geographic areas served Worldwide (11,695 stores in 28 countries)

Headquarters Bentonville, Arkansas, U.S.

Current CEO C. Douglas McMillon

Revenue (US$) 485.873 billion (2017) 0.77% 482.130 billion (2016)

Profit (US$) 13.643 billion (2017) 7.2% 14.694 billion (2016)

Employees 2.3 million (2016)

Main Competitors

Alibaba Group Holding Limited, Amazon.com, Inc., Costco Wholesale

Corporation, Dollar General Corporation, Dollar Tree, Inc., Kohl's

Corporation, Macy's, Inc., Sears Holdings Corporation, Target Corporation

and many other retailers/wholesale companies.

Wal-Mart business overview from the company’s financial report:

“Wal-Mart Stores, Inc. helps people around the world save money and live better – anytime and anywhere – in retail stores, online, and through their mobile devices. We earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ("EDLP"), while fostering a culture that rewards and embraces mutual respect, integrity and diversity. EDLP is our pricing philosophy under which we price items at a low price every day so our customers trust that our prices will not change under frequent promotional activity.”[1]

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BUSINESS DESCRIPTION (1/2) “ ”

“Wal-Mart Stores, Inc. helps people around the world save money and live better – anytime and anywhere – in retail stores or through our e-commerce and mobile capabilities. Through innovation, we are striving to create a customer-centric experience that seamlessly integrates digital and physical shopping and saves time for our customers.

Physical retail encompasses our brick and mortar presence in each market

where we operate. Digital retail is comprised of our e-commerce websites and

mobile commerce applications. Each week, we serve over 260 million

customers who visit our 11,695 stores under 59 banners in 28 countries and e-

commerce websites in 11 countries.

Our strategy is to lead on price, differentiate on access, be competitive on assortment and deliver a great experience. Leading on price is designed to earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices.”[1]

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BUSINESS DESCRIPTION (2/2) “ ”

1. Being the largest retailer in the world, with unmatched scale of operations and strong market power over suppliers and competitors

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STRENGTHS

S W

O T

Wal-Mart is the

world’s largest

company by

revenue and the

largest retailer in

the world.[2]

Figure 1. Comparison of the top 5 retailers in the world in 2016

Source: The respective companies’ financial reports[1][3][4][5][6]

Wal-Mart Carrefour Costco Tesco Amazon.com

Revenue

(US$ billions)485.873 80.645 116.073 66.963 114.424

Locations 11,695 11,935 715 6,665 34

Countries

served28 35 9 11 13

Employees 2.3 million 380,000 218,000 476,000 341,400

What does ‘being the largest retailer in the world’ mean to Wal-Mart?

• economies of scale;

• efficient and effective use of resources;

• huge gains from implementing best practices;

• experimenting with less risk;

• market power over suppliers and competitors.

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STRENGTHS

S W

O T

Wal-Mart’s revenue

reached US$485.9 billion

in 2017, more than

Carrefour, Costco, Tesco

and Amazon.com

revenues combined.

1. Overdependence on sales from the U.S. market

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WEAKNESSES

S W

O T

In 2017, 75.7%

of all company

revenue and

more than 85%

of its operating

income came

from the U.S.

Figure 4. Wal-Mart’s revenue growth in 2015-2017 (in US$ billions)

Source: Wal-Mart’s financial report [1]

Walmart U.S.Walmart

InternationalSam’s Club

2017

Net sales 307.833 116.119 57.365

% share of total revenue 64.0 24.1 11.9

% revenue growth 3.2 (5.9) (2.1)

2016

Net sales 298.378 123.408 56.828


% revenue growth 3.6 (9.4) (2.1)

2015

Net sales 288.049 136.160 58.020


% revenue growth 3.1 (0.3) 1.5

1. The e-commerce market is forecast to reach US$4 trillion by 2020

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OPPORTUNITIES

S W

O T

Figure 6. Total e-commerce sales worldwide (actual and forecast), 2015-2020

Source: eMarketer[16]

1.548 1.915 2.3522.860

3.4184.058

7.4

8.7

10

11.5

13

14.6

2015 2016 2017 2018 2019 2020

Total E-Commerce Sales (in trillions, US$) Change (%)

• Wal-Mart currently operates in 6 of the 10 largest e-commerce markets in the world, including China, the U.S., the U.K., Japan, Canada and Brazil.

• The company could expand its e-commerce operations in other countries as well.

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OPPORTUNITIES

Countries 2015 2016 2017 2018

1. China 426.26 562.66 871.79 1,011.28

2. U.S. 305.65 349.06 442.55 493.89

3. UK 82.00 93.89 114.64 124.96

4. Japan 70.83 79.33 96.87 106.07

5. Germany 63.38 73.46 91.97 99.33

6. France 38.36 42.62 49.71 53.26

7. South Korea 33.11 36.76 44.07 47.82

8. Canada 24.63 28.77 37.61 42.67

9. Russia 17.47 20.30 26.88 30.91

10. Brazil 16.28 18.80 23.79 26.17

Figure 7. Top 10 countries ranked by total e-commerce sales worldwide (actual and forecast, 2015-2018 (in US$ billions)

Source: eMarketer[17]

S W

O T

1. Slowing growth of the China, Brazil, Japan and Chile retail markets

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THREATS

S W

O T

Figure 10. Retail sales growth in China, Brazil, Japan and Chile in 2013-2017 (in percentages)

Source: Trading Economics [28][29][30][31]

Wal-Mart’s foreign retail

markets are becoming

increasingly saturated

each year and their

growth is slowing.

2013 Jan 2014 Jan 2015 Jan 2016 Jan 2017 Jan

China 12.2 11.8 10.7 10.2 9.5

Brazil 5.9 6.2 0.6 (10.6) (1.2)

Japan (1.1) 4.4 (1.1) (0.1) 1

Chile 9.5 6 1.8 3.4 3.8

1. Wal-Mart Stores, Inc. (2017). Form 10-K for the fiscal year ended January 31, 2017. Available at: http://d18rn0p25nwr6d.cloudfront.net/CIK-0000104169/c3013d40-212d-409e-bf30-5e5fd482fc2f.pdf Accessed January 20, 2018

2. Fortune (2017). Global 500. Available at: http://fortune.com/global500/ Accessed January 20, 2018

3. Carrefour (2017). 2016 Financial Information. Available at: http://www.carrefour.com/sites/default/files/carrefour_press_release_fy_2016_20170309.pdf Accessed January 20, 2018

4. Costco Wholesale (2017). Financial Reports. Available at: http://phx.corporate-ir.net/phoenix.zhtml?c=83830&p=irol-reportsannual Accessed January 20, 2018

5. Tesco PLC (2017). 2016 Annual Report. Available at: https://www.tescoplc.com/media/264194/annual-report-2016.pdf Accessed January 20, 2018

6. Amazon.com, Inc. (2017). Form 10-K for the Fiscal Year Ended December 31, 2016. Available at: http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-reportsannual Accessed January 20, 2018

7. Forbes (2017). The World’s Most Valuable Brands. Available at: http://www.forbes.com/powerful-brands/list/ Accessed January 20, 2018

8. Boomerang Commerce (2015). Introduction to Price Perception Index (PPI). Available at: http://www.boomerangcommerce.com/ppi-whitepaper-rboomerang/ Accessed January 20, 2018

9. Lundberg, A. (2002). Wal-Mart: IT Inside the World's Biggest Company. Available at: http://www.cio.com/article/2440726/it-organization/wal-mart--it-inside-the-world-s-biggest-company.html Accessed January 20, 2018

10. Walmart (2017). History Timeline. Available at: http://corporate.walmart.com/our-story/history/history-timeline Accessed January 20, 2018

11. Alexa.com (2017). The top 500 sites on the web. Available at: http://www.alexa.com/topsites/category/Shopping Accessed January 20, 2018

12. Walmart.com (2017). Quarterly earnings. Available at: http://stock.walmart.com/investors/financial-information/quarterly-results/default.aspx Accessed January 20, 2018

13. Wal-Mart Stores, Inc. (2017). Annual report 2017. Available at: http://s2.q4cdn.com/056532643/files/doc_financials/2017/Annual/WMT-2017-AR.pdf Accessed January 20, 2018

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SOURCES (1/3)

14. Osterndorf, C. (2015). 10 reasons Walmart is the worst company in America. Available at: http://www.dailydot.com/opinion/walmart-labor-unions-bad-company/ Accessed January 20, 2018

15. American Customer Satisfaction Index (2017). Available at: http://www.theacsi.org/index.php?option=com_content&view=article&id=147&catid=&Itemid=212&i=Department+and+Discount+Stores Accessed January 20, 2018

16. eMarketer (2016). Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year. Available at: https://www.emarketer.com/Article/Worldwide-Retail-Ecommerce-Sales-Will-Reach-1915-Trillion-This-Year/1014369 Accessed January 20, 2018

17. eMarketer (2015). Retail Sales Worldwide Will Top $22 Trillion This Year. Available at: http://www.emarketer.com/Article/Retail-Sales-Worldwide-Will-Top-22-Trillion-This-Year/1011765 Accessed January 20, 2018

18. YCharts (2017). US Grocery Store Sales. Available at: https://ycharts.com/indicators/grocery_store_sales Accessed January 20, 2018

19. Daniels, J. (2017). Online grocery sales set to surge, grabbing 20 percent of market by 2025. Available at: http://www.cnbc.com/2017/01/30/online-grocery-sales-set-surge-grabbing-20-percent-of-market-by-2025.html Accessed January 20, 2018

20. YCharts (2017). US E-Commerce Sales as Percent of Retail Sales. Available at: https://ycharts.com/indicators/ecommerce_sales_as_percent_retail_sales Accessed January 20, 2018

21. Food Marketing Institute and Nielsen (2017). Grocery is the next big retail sector being Re-Shaped by Digital. Available at: http://www.fmi.org/digital-shopper/?utm_source=fmi-blog-post-link&utm_medium=blog&utm_campaign=DigitalShopper Accessed January 20, 2018

22. Bensinger, G. (2015). Amazon Plans to Add Its Own Line of Food. Available at: http://www.wsj.com/articles/amazon-plans-to-add-its-own-line-of-food-1432843763 Accessed January 20, 2018

23. Quality Assurance and Food Safety (2016). 2015 Private Label Sales Set Sales Record. Available at: http://www.qualityassurancemag.com/article/2015-private-label-sales-set-sales-record/ Accessed January 20, 2018

24. Food Institute (2015). Private Label & National Brands: Dialing in on Core Shoppers Together. Available at: https://www.foodinstitute.com/images/media/iri/TTJan2015.pdf Accessed January 20, 2018

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SOURCES (2/3)

25. Progressive Grocer (2013). 1 in 3 Grocery Shoppers Use Mobile Devices in Store: Study. Available at: http://www.progressivegrocer.com/1-3-grocery-shoppers-use-mobile-devices-store-study Accessed January 20, 2018

26. UPS (2016). UPS Pulse of the Online Shopper. Available at: https://solvers.ups.com/assets/2016_UPS_Pulse_of_the_Online_Shopper.pdf Accessed January 20, 2018

27. Smith, M. (2016). Retail & Mobile Apps: What Works and Why. Available at: https://www.apptentive.com/blog/2016/09/15/retail-mobile-apps-works/ Accessed January 20, 2018

28. Trading Economics (2017). China Retail Sales YoY. Available at: http://www.tradingeconomics.com/china/retail-sales-annual Accessed January 20, 2018

29. Trading Economics (2017). Brazil Retail Sales YoY. Available at: http://www.tradingeconomics.com/brazil/retail-sales-annual Accessed January 20, 2018

30. Trading Economics (2017). Japan Retail Sales YoY. Available at: http://www.tradingeconomics.com/japan/retail-sales-annual Accessed January 20, 2018

31. Trading Economics (2017). Chile Retail Sales YoY. Available at: http://www.tradingeconomics.com/chile/retail-sales-annual Accessed January 20, 2018

32. Identity Theft Resource Center (2017). Data Breaches Increase 40 Percent in 2016. Available at: http://www.idtheftcenter.org/2016databreaches.html Accessed January 20, 2018

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SOURCES (3/3)

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STORES, INC. SWOT

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walmart swot analysis 2018

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