The Competitive Analysis of Walmart

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Walmart is a huge, massively successful corporation that can serve as a useful case study for anyone who wants to build a successful business. There are a variety of factors that have impacted Walmart's success. In order to properly understand this success, it is useful to perform a competitive analysis that looks at the firm's strengths, weaknesses, opportunities and threats.

Strengths

Walmart's key strength is that it is a cost leader. A cost leader is a firm that can provide goods to the public at the lowest possible prices. Walmart is able to achieve this by using its large buying power to negotiate deals with manufacturers and by sourcing many of its products from low-cost countries like China.

Weaknesses

Walmart's weakness is that it is a very broad company. Walmart stores offer a range of products that encompasses everything from produce to hunting equipment and services that range from pharmacies to photography. Because Walmart is broadly focused, it is difficult for the company to excel at any one particular area.

Opportunities

Although Walmart is huge in many markets, there are also several large markets that it has not yet entered. Continental Europe and many regions of Asia are areas where Walmart can potentially expand its business. There is also room for Walmart to expand and develop larger stores in the markets where it is currently doing business.

Threats

Walmart has managed to dominate the discount department store industry. Its real competition may come from more focused businesses, however. Businesses that focus on a single area such as groceries, automotive services or clothing may be better able to satisfy customers than Walmart is able to with their broad focus.

References

About the Author

Wendel Clark began writing in 2006, with work published in academic journals such as "Babel" and "The Podium." He has worked in the field of management and is completing his master's degree in strategic management.

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