Walmart’s Expansion In Africa: A New Exploration Strategy

3069 words - 13 pages

I. INTRODUCTION
The mission statement for Walmart is a simple statement to focus on consumer needs. “We save people money so they can live better. If we work together, we’ll lower the cost of living for everyone we’ll give the world an opportunity to see what it is like to save and have a better life”(Walton S.)
Walmart’s company culture includes a list of values and beliefs it establishes through its management and employee relations. The company’s marketing efforts are to establish awareness that they are the price leaders in their market. In recent times, the company has focus on becoming involved more in local communities by charity and service.
With the general instability of the ...view middle of the document...

The global supply chain also provides business resilience from market-specific risks. In addition, Walmart’s supply chain has high efficiency because of advanced technologies for monitoring and controlling the movement of products from suppliers to its stores.

Weaknesses:

Walmart’s weaknesses impose challenges on the firm’s ability to withstand threats also identified in this SWOT analysis. These weaknesses are directly related to the company’s generic strategy. Walmart uses the cost leadership generic strategy, which leads to the following weaknesses:

• Complains regarding products quality
• Product recall
• Thin profit margins
• In the past Walmart was criticized for pressurizing the employee Union
• Easily copied business model
Thin profit margins are a typical effect of using the cost leadership strategy. Because Walmart minimizes selling prices, it also needs to minimize profit margins and rely more on sales volume. The cost leadership strategy also makes Walmart’s business model easy to copy. The firm does not have significant competitive differentiators, except for its business size.

Opportunities:
Walmart’s opportunities are mainly about expansion and improving business practices. These opportunities are linked to the global economic situation. Also, the human resources situation in the organization presents issues that are actually opportunities for the firm to improve. In this portion of the SWOT analysis, Walmart’s opportunities are:
• Massive growth of the African’s population
• Increased consumer spending
• Expand brand portfolio
• Green initiatives
• Contribute to corporate social responsibility
• Improvement in human resource practices
• Expansion in existing domestic and international markets
• Improvement in quality standards, inhabitants welcome the store concept: high quality and packaged

Walmart’s opportunity to expand in developing countries is based on their high-growth economic condition. On the other hand, the opportunities on HR practices directly relate to the criticisms on the company’s employment practices. Walmart’s opportunity to improve quality standards addresses consumers’ concerns on the health effects of using low-cost and sometimes low-quality products.

Threats:
The threats to Walmart’s business are linked to the retail market condition and the changes on consumer perceptions about the products they buy. These factors should compel the company to make some competitive strategic changes. In the context of this SWOT analysis, the threats to Walmart are:
• Government regulation in different countries
• Employee Union
• Facing strong and aggressive competition
• Healthy lifestyle trend
• Infrastructural barriers and cultural differences in consumer behavior, preferences
• Slow expansion in Africa

The healthy lifestyle trend is a threat and an opportunity. It threatens Walmart’s business because most of the company’s goods are not healthful, organic or natural. It is an...

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