This Walmart SWOT analysis reveals how the largest company in the world uses its competitive advantages to dominate and successfully grow in the retail industry.
It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. If you want to find out more about the SWOT of Walmart, you’re in the right place.
Company Background
Name | Walmart Inc. |
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Founded | July 2, 1962 |
Logo | |
Industries served | Retail |
Geographic areas served | Worldwide (11,718 stores in 28 countries) |
Headquarters | Bentonville, Arkansas, U.S. |
Current CEO | C. Douglas McMillon |
Revenue (US$) | 500.343 billion (2018) 2.98% increase over 485.873 billion (2017) |
Profit (US$) | 9.862 billion (2018) 27.7% decrease over 13.643 billion (2017) |
Employees | 2.3 million (2017) |
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. |
Walmart business description taken from the company’s financial report:
“Walmart Inc. (“Walmart,” the “Company” or “we”) helps people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.
Through innovation, we are striving to create a customer-centric experience that seamlessly integrates our eCommerce and retail stores in an omnichannel offering that saves time for our customers.
Each week, we serve nearly 270 million customers who visit our more than 11,700 stores and numerous eCommerce websites under 65 banners in 28 countries.
Our strategy is to lead on price, invest to 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 (“EDLP”).
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.
Price leadership is core to who we are. Everyday low cost (“EDLC”) is our commitment to control expenses so those cost savings can be passed along to our customers. Our omni-channel presence provides customers access to our broad assortment anytime and anywhere. We strive to give our customers and members a great digital and physical shopping experience.
Our operations comprise three reportable segments: Walmart U.S., Walmart International and Sam’s Club.
During fiscal 2018, we generated total revenues of $500.3 billion, which was primarily comprised of net sales of $495.8 billion.”[1]
You can find more information about the business in Walmart’s official website or Wikipedia’s article.
Walmart SWOT analysis
Strengths
1. Being the largest retailer in the world, with unmatched scale of operations and strong market power over suppliers and competitors
Walmart is the world’s largest company by revenue and the largest retailer in the world.[2] It is also the world’s largest private employer, with more than 2.3 million staff. The company is a retail market leader in the U.S. and is a major competitor in all geographic markets in which it operates.
Walmart | Carrefour | Costco | Tesco | Amazon.com | |
---|---|---|---|---|---|
Revenue (in US$ billions) | 500.343 | 94.760 | 126.172 | 62.433 | 177.866 |
Locations | 11,718 | 12,300 | 746 | 6,809 | 80 |
Countries served | 28 | 35 | 11 | 9 | 14 |
Employees | 2.3 million | 378,923 | 239,000 | 460,000 | 566,000 |
Source: The respective companies’ financial reports[1][3][4][5][6] (Walmart reports its revenue for 2018, but most of its financial year is in 2017, so we compare the company’s 2018 data with other businesses’ 2017 data.)
Walmart’s revenue reached US$500.343 billion in 2017, more than Carrefour, Costco, Tesco and Amazon.com revenues combined. The company employed twice as many people and owned about 5 times more retail space than its top 3 rivals.
Forbes listed Walmart as the 24th most valuable brand in the world in 2018[7], worth US$24.1 billion. No other direct competitor, except Amazon, has made it to the Forbes list of the top 50 most valuable brands.
What does ‘being the largest retailer in the world’ mean to Walmart?
- Economies of scale. The company can share its fixed costs over many products, which makes Walmart one of the cheapest places to shop.
- Efficient and effective use of resources. Walmart can use its resources, such as distribution facilities, information systems, knowledge and other capabilities and skills, more efficiently and effectively over a large number of locations.
- Huge gains from implementing best practices. The company can identify better ways of performing tasks, managing stores and hiring new employees and can achieve huge gains by implementing these best practices in its vast network of stores.
- Experimenting with less risk. The company can engage in many experiments within its stores or in new store formats without the risk of losing a substantial amount of profits or revenue.
- Market power over suppliers and competitors. Due to its size, Walmart can exercise its market power over suppliers by requiring lower prices from them. The company can also affect the competition by selling selected items at a loss, thus driving competition out of the market.
2. International presence
Walmart went international in 1992 through a joint venture with Cifra, a Mexican retail company, opening a Sam’s Club in Mexico City.[10] Since then, the company has expanded globally to become the largest international retailer (by revenue), operating 6,360 retail units in 27 countries outside the U.S.
The company operates under different brand names, such as ASDA in the U.K., Walmex in Mexico and Seiyu in Japan. Walmart’s non-U.S. revenues reached US$119.763 billion or 23.9% of its total sales in 2018, a significant source of revenue.[1]
Walmart strongly focuses on its international segment as this provides an opportunity for growing the company’s operations. The company added 47 new supermarkets/stores in Central America, 15 in Chile, 4 in China and 11 in the UK in 2017, which allowed it to grow the international sales.[1]
Walmart’s international expansion strategy not only helps the company to grow, but also strengthens the company’s retail leadership position. By growing internationally, the company diversifies its income sources, gains valuable new experience and further benefits from economies of scale.
https://strategicmanagementinsight.com/swot-analyses/walmart-swot-analysis.html
Jurevicius, O. (2020, January 10). Walmart SWOT Analysis (5 Key Strengths in 2020). SM Insight. https://strategicmanagementinsight.com/swot-analyses/walmart-swot-analysis.html.
Acknowledgement: We gratefully acknowledge the Strategic Management Insight. organization for their efforts in sharing information about strategic management and corporate analyses. Thank you Strategic Management Insight team.
- Walmart Inc. (2018). Form 10-K for the fiscal year ended January 31, 2018. Available at: http://d18rn0p25nwr6d.
cloudfront.net/CIK-00 00104169/a25e7a cb-aa07-49f3-8c0c-0 c69e5a8d372.pdf Accessed January 10, 2019 - Fortune (2018). Global 500. Available at: http://fortune.com/global500/ Accessed January 10, 2019
- Carrefour (2018). Consolidated Financial Statements as of December 31, 2017. Available at: http://www.carrefour.com/
sites/default/ files/comptes_consolides _2017_eng_0.pdf Accessed January 10, 2019 - Costco Wholesale (2018). Financial Reports. Available at: http://phx.corporate-ir.
net/phoenix.zhtml ?c=83830&p=irol- irhome Accessed January 10, 2019 - Tesco PLC (2018). 2017 Annual Report. Available at: https://www.tescoplc.com
/media/392373/68336 _tesco_ar_digital _interactive_250417.pdf Accessed January 10, 2019 - Amazon.com, Inc. (2018). Form 10-K for the Fiscal Year Ended December 31, 2017. Available at: http://phx.corporate-ir.net
/phoenix.zhtml?c=97664& p=irol-sec Accessed January 10, 2019 - Forbes (2018). The World’s Most Valuable Brands. Available at: http://www.forbes.com
/powerful-brands/list/ Accessed January 10, 2019 - Market Track and Reuters (2017). Price check. Available at: http://fingfx.thomsonreuters
.com/gfx/rngs/WALMART- PRICING/010051T543J /index.html Accessed January 10, 2019 - 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 10, 2019 - Walmart (2018). History Timeline. Available at: http://corporate.walmart.
com/our-story/history/ history-timeline Accessed January 10, 2019 - Alexa.com (2018). The top 500 sites on the web. Available at: http://www.alexa.com/
topsites/category/ Shopping Accessed January 10, 2019 - Walmart.com (2018). Quarterly earnings. Available at: http://stock.walmart.com
/investors/financial- information/quarterly -results/default.aspx Accessed January 10, 2019 - Walmart Inc. (2018). Annual report 2018. Available at: http://s2.q4cdn.com/
056532643/files/ doc_financials/2018 /annual/WMT-2018_Annual -Report.pdf Accessed January 10, 2019 - 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 10, 2019 - American Customer Satisfaction Index (2018). 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 10, 2019 - eMarketer (2017). Total Retail Sales Worldwide, 2015-2020 (trillions and % change). Available at: http://www.emarketer.com
/Chart/Total-Retail-Sales-Worldwide-2015-2020-trillions-change/194243 Accessed January 10, 2019 - Statista (2018). Retail e-commerce sales worldwide from 2014 to 2021 (in billion U.S. dollars). Available at: https://www.statista.com
/statistics/379046/ worldwide-retail-e- commerce-sales/ Accessed January 10, 2019 - YCharts (2018). US Grocery Store Sales. Available at: https://ycharts.com/
indicators/grocery_store_sales Accessed January 10, 2019 - 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 10, 2019 - Statista (2018). Online grocery market share in the United States from 2015 to 2020. Available at: https://www.statista.com/
statistics/531189/online-grocery-market-share-united-states/ Accessed January 10, 2019 - YCharts (2018). US E-Commerce Sales as Percent of Retail Sales. Available at: https://ycharts.com/
indicators/ecommerce_sales_as_ percent_retail_sales Accessed January 10, 2019 - Nielsen (2018). The Rise and Rise Again of Private Label. Available at: http://www.nielsen.com/
content/dam/corporate/us/en/reports-downloads/2018-reports/global-private-label-report.pdf Accessed January 10, 2019 - Supermarket News (2017). The Next Wave of Private Label. Available at: http://www.supermarketnews.com/
sponsored-content/next-wave-private-label Accessed January 10, 2019 - Statista (2018). Leading countries ranked by retail e-commerce sales from 2014 to 2019 (in billion U.S. dollars). Available at: https://www.statista.com/
statistics/377624/leading-countries-retail-e-commerce-sales/ Accessed January 10, 2019 - 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 10, 2019 - UPS (2017). UPS Pulse of the Online Shopper. Available at: https://solvers.ups.com/
assets/2016_UPS_Pulse_ of_the_Online_Shopper.pdf Accessed January 10, 2019 - 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 10, 2019 - Trading Economics (2017). China Retail Sales YoY. Available at: http://www.tradingeconomics.com/
china/retail-sales-annual Accessed January 10, 2019 - Trading Economics (2017). Brazil Retail Sales YoY. Available at: http://www.tradingeconomics.com/
brazil/retail-sales-annual Accessed January 10, 2019 - Trading Economics (2017). Japan Retail Sales YoY. Available at: http://www.tradingeconomics.com/
japan/retail-sales-annual Accessed January 10, 2019 - Trading Economics (2017). Chile Retail Sales YoY. Available at: http://www.tradingeconomics.com/
chile/retail-sales-annual Accessed January 10, 2019 - Identity Theft Resource Center (2018). 2017 Annual Data Breach Year-End Review. Available at: https://www.idtheftcenter.org/
2017-data-breaches Accessed January 10, 2019
https://strategicmanagementinsight.com/swot-analyses/walmart-swot-analysis.html
Jurevicius, O. (2020, January 10). Walmart SWOT Analysis (5 Key Strengths in 2020). SM Insight. https://strategicmanagementinsight.com/swot-analyses/walmart-swot-analysis.html.
Acknowledgement: We gratefully acknowledge the Strategic Management Insight. organization for their efforts in sharing information about strategic management and corporate analyses. Thank you Strategic Management Insight team.