Wal-Mart store was founded in 1962, and became listed in the New York stock exchange in the year 1970. Substantial capital investment enabled Wal-Mart to expand to 276 stores in 11 countries at the later stage of 70’s. In 1991, it became an international company (Wal-Mart website n.d, p.2). Wal-Mart has become a successful chain of stores due to proper utilization of strategic planning.
According to Rogers (1995), strategic planning is the process where an organization describes its course and makes decisions on apportioning resources (capital, labor among others) to achieve this course (p. 2). An organization emphasizes an analysis on what to do, to whom, they are doing it for and how they will outshine from what they are doing. One of the business techniques used is SWOTT (Strengths, Weakness, Opportunities, Threats and Trends). Factors internal to the firm can be termed as strengths and weaknesses while those external to the firm are termed as opportunities, threats and trends (Kemp 1995, p.3). The discussion below analyzes the factors (external and internal) that influence strategic planning of Wal-Mart stores using Strengths, Weakness and Opportunities analysis.
Despite Wal-Mart being the most powerful retail shop in the world, it has been criticized heavily but, its strengths are the most powerful resource for the expansion of competitive gain. Wal-Mart has gained a reputable name due to the sale of a broad range of products, expediency and the worth for money it offers. Wal-Mart has experienced global growth over the years and is extremely competent in supporting its international logistics systems. Wal-Mart has a fully functional and competent human resource department; in which developing, training and retaining employee is one of the core objectives (Jotheeswaran 2008, par. 5).
It is believed that if certain strengths are not showcased then they automatically become weaknesses. Therefore, Wal-Mart has been keen in identifying its weaknesses so that it can capitalize on them. Wal-Mart has expanded enormously in the world and management of these stores all over the world can become difficult despite its information technology advantage. There can be an absence of flexibility of its most competitive products as it sells a wide range of commodities. Its presence is only felt in a few countries despite being a global retail store. The huge investment in manufacturing can become an obstacle if it can not respond quickly to changes in the environment (Jotheeswaran 2008, par. 6).
The internal environmental analysis discussed above is well linked to the external factors where opportunities are categorized. Ratheeswaran (2008) states that, it is important for a company to surface its opportunities to maximize profit and expand. Wal-mart can form a coalition with other retailers operating globally spotlighting specific markets. It can also enlarge its customer based markets as they are operating in a small number of countries. Finally, big opportunities are present for Wal-Mart to progress with its strategy of large centers.
Apart from the above, Wal-Mart should also consider the competence of its employees and the management at large. So that productive capacity can be enhanced. Also, strategies of the competitors should be at the fingertips of Wal-Mart top management so that it can secure its clientele and even possibly expand to the territory of its competitors. SWOT analysis therefore helps a company, Wal-Mart in particular, to match the resources and the ability it has with its operating environment.
Kemp, L.R. (1995). Handbook of Strategic Planning. New York: East Rockaway.
Ratheeswaran, V. (2008). SWOT Analysis-Wal-Mart. Thoughts and Tips. 2009. Web.
Wal-Mart website, n.d. about us. 2009. Web.