Market Analysis: Wal-Mart

However, Walter released a statement saying their actions were not illegal because the employees were leaving their scheduled shifts to participate in protests. This potential lawsuit could not only affect how customers view the company, but also how many people are willing to continue to work for the company. Economic Landscape while Walter has companies all over the world, the majority of Its business Is In the United States. The united States has a mixed economy of industrialization and industrial, but leaning heavily towards a more industrial economy that largely relies on service Industries.

According to a 2013 report, the average income for Individual In the U. S. As around $40,000. However, of people are at or below the poverty level. This income distribution situates Walter to be the ideal store for many families. The prices are low enough to cater to those with no money to spare but also stocks higher end products for those with extra funds. Since the united States has been In a recession since 2008, household debt Is higher than ever. At the same time, people have also been trying to save what money they have left to prepare for more hard times ahead.

However, according to one report published by CNN consumers are now saving less than they did In the pest part of the recession because they feel that they are now more secure. This frees up more money to spend on luxury items in stores such as Walter. Socio- cultural Landscape Society today is more different today than ever before and continues to change at a rapid pace. Household dynamics have changed as the “norm” has shifted from a nuclear family to the Idea of a family that Is much more nontraditional. Single parent families or children being raised by grandparents have skyrocketed over the last income available within the household.

Fewer luxury items may be purchased due to sees money and more “quick-cooking” grocery items may be purchased because single parents have little time to cook between working one or two Jobs and taking care of their children. In addition to the family dynamic changing, where they live is changing as well. Renting a home or apartment is quickly becoming a more attractive option than having a mortgage. With loans being so hard to secure, it makes sense that more consumers are interested in the easily available apartment or rental home.

The impact that renting versus owning has on a company like Walter can be greatly aired; on one hand, it offers flexibility. Living in a rental home means that individuals can move much easier than if they owned a home. This could offer more diverse spending to companies because consumers are moving more frequently. Consumers could also be more likely to be in the market for home goods and cleaning products if they are moving more frequently. Technological Landscape The fact that technology is changing at such a rapid pace affects Walter in many different ways.

For one example, with incremental innovation, the products they need o stock to keep up with consumer desires are constantly changing. If demands are not met, consumers can easily go somewhere else to get the technology they need or want. However, technology has had the most impact on transformation innovation. As technology has increased, online marketing efforts have changed pace. The rise of social media has allowed Walter to broadcast to consumers multiple times a day, as many consumers are constantly plugged into their computers or smartness.

In turn, the rise of the smartened has allowed Walter to create an application that allows consumers to have the whole store at their fingertips. All of these marketing techniques can and have increased revenue for the company in times that require constant innovation. Natural Landscape The natural landscape of the US is stable yet unsteady at the same time. While the access to raw materials needed to produce goods is stable, the cost is constantly fluctuating. The cost fluctuations come from rising energy costs. It all is a never ending cycle. Problems in the Middle East raise oil prices which in turn creates higher energy costs for us.

The price of gas also rises which creates higher shipping costs for companies which then creates higher final costs for consumers. When the prices of all goods are raised, consumers are forced to make a choice between name brand or store brand foods, and luxury goods or essentials. Consumers are more likely to go with the cheaper options, which reduces revenue for the company. Demographic Landscape It is true that the United State is a melting pot with all different types of people as part of the culture. As the baby boomers age into their fifties and sixties, they may to be doing the primary shopping for their household.

Their children or grandchildren may be doing the shopping for them as well as for their own household. The choices that younger versus older generations make in the store can be very different. For examples, younger shoppers may care more about organic fruits and vegetables, free-range chicken, and grass-fed beef than their elders and these products definitely come with a higher price tag. Immigrate to the US, they bring their primary language with them. Some never assimilate to the culture and learn to speak English. While Spanish is the most moon language other than English, Chinese and Korean are also prevalent.

These language barriers can prevent consumers from shopping at store like Walter in favor of smaller, local stores where there is more likely to be someone to understand them. If a translator was available in every store, more minority business might be generated. However, some could find it intimidating and it could end up being a loss. Strengths Walter’s scale of operations is impeccable. It is known as the largest retailer in the world with more than $400 billion in revenue and 10,130 total stores. Due to this argue scale of operations, it is able to exercise strong buyer power on suppliers to reduce their products prices.

Walter is also able to achieve higher economies of scale than most of It’s competitors because of its large size. When a company has higher economies of scale this can result in lower prices that can be passed down to the consumers. By implementing a cost leadership strategy, Walter has striver to become the low cost leader in today’s retail market. The cost leadership strategy involves the selling of products at the lowest price possible and providing no frill service in order o achieve higher economies of scale and attract the majority of consumers.

While Walter sells products at a much lower price, and displays them all in warehouse style superstores it doesn’t offer many additional benefits or services. O Proficient in information systems. Walter can achieve significant cost savings due to its extensive information systems that track orders, inventory levels, sales and other related information in real time. All of this information can be instantly accessed and analyzed, so decisions can be made in store. Walter’s above par management of apply chain and logistics is one of the key factors for their success.

Walter offers a wider range of products than any other retailer. It’s able to sell groceries, entertainment, wellness, apparel, and home good products. They are also able to offer them with branded labels and labels of their own. This wide range of products attracts customers to stores Just on convenience alone. Weaknesses Walter has little differentiation compared to its competitors, which may hurt the company in the future if the average consumer income were to increase. If that were to happen, the low cost leadership strategy would not be as effective as it is with today’s consumers.

Without the implementation of a new strategy Walter might lose long term customers who were only shopper their at their stores for lower prices. It seems that Walter has always struggled with high employee turnover. This high employee turnover drives costs up, due to having to train new employees more frequent. Some Employee’s have stated that this turnover is brought on by the low skilled, poorly paid Jobs Walter offers. The negative publicity Walter receives could also be seen as a weakness.