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PORTER Five Forces Analysis of Wal-Mart

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Wal-Mart was founded in 1962 by Sam Walton with a philosophy to save people’s money so that they can live better lives. The company was incorporated on Oct. 31, 1969 as Wal-Mart Stores, Inc. In 1972, the shares of the company got listed on the NYSE. It has over 8,613 retail outlets under 55 different banners in 15 countries. It has over 2 million employees globally. Its headquarters are in Bentonville, Arkansas. It is the largest grocery retailer in the United States. In the U.S., it operates through discount stores, supercenters, neighborhood markets, and through walmart.com (About us 2012).

Strategy Development

Wal-Mart’s basic strategy revolves around low costs and high volumes. The company’s strategic planning aims at maintaining low prices and offering quality customer service so that customers could be fully satisfied. If the average operating expenses throughout the industry are compared against that of Wal-Mart’s, then still the operating expenses of Wal-Mart turns out to be relatively lower. The reason for such low operating costs lies in its high quality and efficient distribution network. The distribution network derives its efficiency from the fact that it locates its stores in a strategic manner, manages supply and order related information efficiently through latest information technological tools, makes use of cross-docking, and strategic expansion designs. The pricing strategy being followed by Wal-Mart is of market penetration, as it concentrates on offering “everyday low prices”. It captures significant market share through this strategy and takes advantage of economies of scale in production, and produces on a mass scale. Another vital strategy that is instrumental to its success and growth is the quality customer service it offers. High quality customer service in comparison to other discount retailers is derived through employees who are high in morale, prices that are relatively low, and customer information that is managed efficiently. As there are a wide range of products available in the stores of Wal-Mart, therefore it is very convenient for the customers to shop for all their needs at just one destination (Kneer 2009).

SWOT Analysis

Strengths

Market Capitalization:.

Human Resource Capital

Technology:

Customer oriented approach:.

Weaknesses

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PORTER Five Forces Analysis of Wal-Mart

Strategy Development

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