Table of Contents
This study will consist of an analysis of Wal-Mart stores as well as a proposal of any improvements that may be required. Wal-Mart is a multinational retail company that operates large warehouses and discount stores. It was first incorporated less than five decades ago by two brothers Walton an Bud in Bentonville, Arkansas. In order to better address its analysis, it will be necessary to examine the economic environment in which the organization operates. Since Wal-Mart operates stores and warehouses globally, an in-depth micro and macro-economic analysis will be required.
The Retail industry
At the onset of 2014, there was news of stores being closed down by the biggest U.S. retail industry chains such as Home Depot, Wal-Mart and Costco. This trend was getting accelerated not because the retail industry was undergoing a crisis but because some of the stores and retail chains found it extremely difficult to continue competing in a fast moving and highly competitive worldwide retail environment. However the number of retailers that closed or went bankrupt in 2014 was still relatively lower than previously. In the new global market that is characterized by consumers preferring to make purchases over the internet or via mobile shopping, it has become increasingly clear that the retail industry is approaching a point of saturation especially when it comes to physical retail stores.
Legal and Political
Wal-Mart’s home country, the United States, is a federal constitutional republic whereby the President is the head of both the government and the state. The U.S. has a liberal economy and thus a free-market retail industry. However, there are laws that govern the activities in the retail sector such as those touching on truth advertising, consumer protection laws as well as laws that state that it is illegal for companies to make consumers to believe that there is a discount in terms of prices in cases whereby none is existent (Lichtenstein, 2011).
Lately, the consumer’s profile has changed and now the retail consumers make deliberated decisions based on lifestyle desires as well as his willingness to play his part in taking care of the environmental impact of his or her shopping choices. Issues like climate change currently play a significant role in swaying consumer preferences
Threat of new entrants
One of the factors that Wal-Mart is supposed to be aware of is the significance of new competitors more so with the onset of e-commerce and m-commerce. Companies like Amazon are aggressively eating into the market share of traditional brick and mortar stores (Canak, 2006).
Industry competitive rivalry
Due to its expansion across the globe, Wal-Mart is facing significant home grown competition in different countries that offer a relatively different type of competition. The competitors include Target, Kroger, Costco as well as IKEA.
Role of Technology
The internet has brought with it the convenience of e-commerce. Wal-Mart has had to embrace e-Commerce to reach out to young shoppers and penetrate markets that were previously beyond its reach (Kneer, 2009).
- Industry competitive rivalry
- Threat of new entrants
- Micro Analysis
- Legal and Political
- Macro Analysis
- The Retail industry
- Role of Technology
- Canak, N. (2006). Wal Mart Business Case Study. Munich GRIN Verlag
- Kneer, C. (2009). The Wal-Mart Success Story. München: GRIN Verlag.
- Lichtenstein, N. (2011). Wal-Mart: The face Of twenty-first-century capitalism. New York: New Press.