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Retails Industry Essay

3416 words - 14 pages

Business 478 D200 Group 6
Laura Wei Shuojun Wang Jiangbo Zhang Yongheng Ao
Strategic Analysis For:

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History
Walmart was founded in 1962 by Sam Walton in Rogers, Ark. It is an American multinational retail
corporation that runs chains of large discount department stores and warehouse stores. They focus on
making a difference in the lives of their customers, and helping customers and communities save money
and live better. In 1969, the company officially incorporated as Walmart Stores, Inc. Walmart started its
public trade on the New York Stock Exchange in 1972. With the continued rapid growth, Walmart was
operating in 11 states with 276 stores by the end of 70's decade. In the ...view middle of the document...

With the balance growth, Walmart is a $466 billion company. In addition, Walmart's net sale achieve
$274.5 billion, with the international contributed $132.5 billion by 2013 (Walmart 2013 Annual report,
2013).

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Due to the expansion around the world, Walmart is also facing a lot of competitors in different countries
with different kinds of competition. Primary competition includes department stores like Kmart, Target,
ShopKo, etc. Moreover, some smaller retailers focus on a small niche market, which can also compete
successfully against Walmart.
General Environment
• Social --- The social cultural segment is concerned with a society's attitudes and cultural values. A
major social cultural trend is the continued growth of suburban communities. The increasing number
of people living in the suburbs has a number of effects. Walmart continues expanding its current store
capacity to include new products and services for customers. Walmart will build new supercenters in
previously unexplored regions in Canada, which includes plans for 37 new stores in the next fiscal
year (Canadian Press, 2013). In America alone, Walmart established 4,017 stores in central and
convenient locations to serve communities (Global Responsibility, 2013).
• Political/legal --- Walmart must carefully analyze the business-related polices. Competition laws,
taxation laws, and labor training laws are areas in which policies can affect Walmart's operation and
profitability a lot. Walmart is facing an issue regarding discrimination of employees based on their
gender. Women are discriminated by not allowing them to sit in supervisory and managerial levels
(Walmart: An Analysis, 2008). There are said to be pending lawsuits waiting for Walmart's notions as
the company has allegedly went against the labor laws. This negative reputation could result in a loss
of competitive advantages, sales, and possibly Walmart's reputation as the world's leading retail
company. Therefore, engaging in gender equality practices will help contribute to Walmart's success.
• Demographic --- For Walmart, demographic segments are analyzed on a global basis, because it
operates internationally. Demographic segments is concerned with many areas such as population size,
age structure and geographic distribution. Walmart is using its wealth of sales and inventory data to

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segment based on demographics, allowing it to market to specific age, ethnicity and income brackets
(Brian, 2006). By analyzing the demographic segment, Walmart will know their customers better, so
better services could be provide.
• Economic --- Walmart is always sensitive towards economy growth, their sales model which depends
on low margins of profit and a high volume of sales, could alter relatively fast. When economy doing
well, Walmart's low price strategy would be of less importance to customers, in the other hand, during
a time of recession Walmart goal of high volume of sales would be...

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