Productivity Loop
Walmart Profile
SWOT – SWOT
Strengths
● Global scale – not only is Walmart the largest food and grocery retailer in the world, it is also one of the largest companies in the world, and this scale provides it with a major competitive advantage in terms of product sourcing, marketing and the ability to transfer best-practice across its international markets.
● Low price credentials – Walmarts operating model is based on delivering low prices, everyday, and this resonates with shoppers in all countries. The retailer is committed to delivering the EDLP model in all of its international markets, as it believes that the lowest priced retailer will win out in what it describes as the “era of price transparency.”
● Scale of domestic operations – in a largely fragmented US retail sector, Walmart has a strong market leadership position which is supported by an un-matched store network, which is viewed as a major asset as multi-channel retailing continues to evolve.
● Fast growing international business – Walmarts international operations are now the key growth engine of the business, helping it to reduce its dependency on its US operations and take advantage of the potential for high returns in fast growing, emerging markets. Walmart also has a highly disciplined approach to capital allocation in new markets.
● Multi-format capability – due to its wide range of formats and banners, Walmart is able to meet the needs of a broad range of shoppers and catchments. The retailers growing expertise in small format retailing, driven by developments in South America, is likely to be of value across all of its markets.
● Clear business model – Walmarts simplified and clear business model provides clarity of purpose for all levels of the organisation. Walmart has a very strong corporate culture and benefits from a ‘can-do attitude. The retailers lean cost structure and EDLC (Every Day Low Cost) approach allows it to deliver the EDLP model for its shoppers, reinforcing its price leadership in key markets around the world.
● Logistics and systems expertise – Walmart claims to have the most efficient distribution systems in the world and has introduced centralised distribution into each of its international operations. Its ‘Retail Link system also provides internal teams with highly detailed product information to enable it to track sales, profitability and inventory levels. The system also provides its suppliers with a high degree of transparency.
● Succession planning – almost all the senior management and chief executive officers at Walmart have long been part of the Walmart culture and the company very rarely recruits externally for senior level positions.
Weaknesses
● Weakness