Free Essay on Walmart Incorporation: PESTEL and SWOT Analysis

Published: 2022-04-08 09:30:08
Free Essay on Walmart Incorporation: PESTEL and SWOT Analysis
Type of paper:  Essay
Categories: Walmart SWOT analysis
Pages: 7
Wordcount: 1776 words
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A. Examination of Walmart Incorporation

Walmart Stores Incorporation is one of the leading retailers in the world regarding the number of employees and revenue. Studies report that by 2015, the firm had more than 2.4 million personnel globally (Lombardo, 2017). Established in 1962 at Arkansas, the organization has developed into the world's retail cutting-edge company. With the current top rank in the retail commerce, Walmart's yearly income surpassed $525 billion at the end of the 2017 fiscal year. This success is founded on efficient execution of the firm's strategy to realize its mission and vision. This article provides an exploration of the organization's external environment as it captures various aspects of the retail industry (with specific focus on Walmart Corporation) concerning the PESTEL Analysis, the analysis of the organizations structure and culture and SWOT analysis reflecting on some of the my strength and weaknesses as well as the opportunities in relation to those of Walmart Retail Store. I am employed as the chief marketing officer for the company in the United States. I am therefore responsible for all the elements regarding the company's marketing operations which consist of consumer communications and research as well as the organization's program development, branding and strategy.

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B. Walmart PESTEL Analysis

Walmart's macro-environment includes elements that contribute to the firm's success. The PESTEL analysis approach adequately presents these aspects. Since Walmart Group is the retail industry frontrunner, the company continues to face numerous potential challenges of threats in the sociocultural, economic, legal, technological and political factors of its commerce.

Conversely, the firm's success relies on a continuous assessment of the retail business environment (Lombardo, 2017). The PESTEL aspects transform over time hence imposing profound challenges to Walmart Corporation. The company must, therefore, exploit the existing opportunities and safeguard itself from the external threats. Through the application of PESTEL analysis, the company leaders and executives can determine which aspects need to be prioritized in the firm's strategy development (Lombardo, 2017).

The external dynamics in Walmart's macro-environment, based on PESTEL analysis approach, reveal the necessity for a strategy that is directed towards solving the sociocultural, economic and ecological concerns. For instance, the company considers some of the political aspects of the retail industry commonly related to government regulations. Some of the external political elements that influence the company's success are the political backing towards globalization and the high solidity of politics in different regions of the world which both act as the firm's opportunities. Other political factors include the political pressure for improved employee salaries which act as a threat to the company. The macro-environmental aspects of the firm are essential as they can be applied in the development of the company's business strategies (Lombardo, 2017). The external environmental analysis, for example, can be used to address the current threat of higher personnel salary. The increase in pay is a threat to the organization since it contradicts the company's principle of cost reduction which is vital in Walmart's cost management generic approach.

Secondly, the organization currently faces substantial pressure from the economic transformations since any of such changes dramatically impacts on the firm's revenues. Some of the external financial aspects in the company's macro-environment include the continued growth of the third world countries which is an opportunity to the corporation and the decreasing unemployment rate in the U.S. that serves as a threat to Walmart. The PESTEL analysis model, allows the company to acknowledge the need to exploit more opportunities around the globe (Brea-Solis et al. 2014). Hence, Walmart emphasizes its market penetration in the rapidly-developing economies of the third world nations which have an enhanced demand for the commodities from retail companies.

Additionally, the socio-cultural aspects of the retail business environment of Walmart Corporation influence the customer preferences and perception. Some of the socio-cultural factors as indicated through PESTEL analysis include the cultural dynamism trends (firm's opportunity) and urban migration (Walmart's threats). These factors have a substantial influence on the company's growth, for instance, through use of the corporation's opportunities, a variety of products can be increased about the current cultural preferences such as health products. The company can also modify its business strategy to exploit the growing customer demand in towns and their surrounding zone (Brea-Solis et al. 2014). On the other hand, to deal with some of the company's technological concerns, Walmart Inc. needs to enhance its investments in the firm's business automation as well as the smartphone usage amongst its clients (opportunities). By taking advantage of the opportunity in the smartphone use of consumers, the brand has to increase its online existence which will increase the company's revenue.

Lastly, through the technological innovation, the company can expand its business efficiency which is another opportunity that needs to be exploited (Brea-Solis et al. 2014). Moreover, in respect to the legal aspects, Walmart Group is a subject to the necessities of regulations and laws. Based on the PESTEL evaluation approach, the existing external features impose limits on all retail companies. For instance, the tax reform is a probable threat to Walmart Corporation since it can result in high tax rates. The firm, must therefore, consider implementing the food safety regulations as an opportunity to enhance the quality standards of its products.

G. Walmart Organizational Culture and Structure

Walmart Corporation possesses a hierarchical practical administrative structure. The structure consists of two fundamental features: Function and hierarchy-based description. The function-based description features of Walmart administrative structure entails a group of employees managing specific duties. For instance, the company has the department for the role of information technology, human resource management as well as the department of marketing in which I oversee its operations. On the other hand, the hierarchy aspects of the company's structure pertain to the vertical positions of authority and command, for example, excluding the firm's Chief Executive Officer, each of the company's employee has a superior. The mandates and directives issued from the top ranks of the company management team are implemented through the middle managers down to the file-and-position personnel in the retail store.

The entire stores of the company have similar job descriptions, job categories, and the executive hierarchy (Brea-Solis et al. 2014). For instance, found at the ladder's bottom, the main entry stage hourly ranks are the sales stocker and associate as well as the cashier. The initial step up is the hourly manager of the department. The remaining hourly managerial ranks comprise of Check-Out Supervisor who is also the Client Service Manager at Sam's Pub. The subsequent step up position is the management trainee, which is a five to six months platform that prepares the personnel for jobs as Assistant Managers. The Assistant Managers form part of the first remunerated management team. Every retail store consists of an Assistant Manager depending on its size. Co-Manager makes the next level, and it is a rank utilized only within large stores. The General Manager of Sam's Pub or Store Manager is the top rank within the corporation. The chart below indicates the company's administrative structure.

Figure 1: Walmart Group Organizational Structure

Source: The respective companies' financial reports

In respect to the corporation's culture, the Walmart Group defines this term as their values in operations. This denotes the manner by which the firm constructs an essential front-line work atmosphere or the way it delivers superior consumer service and enhances its performance with the aim of attaining the common goal of saving individual's money to improve their living standards. Some of the company's value statements relate to the aspect of customer service and strive for excellence. These statements are frontline centered (customer service) which articulates that Walmart Company has the mandate to empower and support its associates to serve clients on a daily basis and strategically focused (Strive for excellence) which further states that the firm must make clear decisions, expect transforming conditions and prepare for the future (Brea-Solis et al. 2014).

D. SWOT Analysis

a. Strengths

The firm enjoys an effective and efficient use of its assets. Walmart Company can hence utilize its resources such as its competent distribution facilities which ensure proper service delivery to its consumers (Lombardo, 2017). I also strength in my line of duty and profession which is of great significance to the firm. For example, my skills, knowledge, and capabilities in the field of marketing allow the company to excel in its performance vis-a-vis the marketing operations universally.

Secondly, Walmart also enjoys a massive market power over its competitors and suppliers. Because of the firm's size, the corporation exercises its market power over its suppliers through the acquisition of lower prices (Brea-Solis et al. 2014). Walmart Group also impacts on the retail industry's competition by the trade of certain commodities at a loss to drive rivalry away from the market. About my strengths, my excellent marketing proficiency performs a pivotal role in the acquisition of the company's new clients. I have made individual contributions to the company's success such as assisted in the current demographic profiling and market research to capitalize on and identify the unmet market needs in various parts of the globe.

v. Weaknesses

The company has high employee turnover and a lack of motivation among existing employees due to the lack of social responsibility towards its workers (Brea-Solis et al. 2014). Moreover, Walmart Group has a high personnel turnover and nonexistence of motivation for the current workers attributed to this dearth of social responsibility towards its employees which further impacts on the firm's image. In respect to some of my weaknesses, at times I get easily impatient and bored to tackle the problems associated with the company such as the notable lack of social responsibility towards Walmart employees. This sometimes affects my level of performance during the execution of my duties at work. However, I do have faith in the company's capacity to fulfill my expectations concerning its monetary benefits and rewards and the job content since the firm has well-designed recognition policy. The policy establishes a work atmosphere where all the personnel feels appreciated for their contribution and efforts, serves to motivate, retain and attract employees.

An individual who exhibits similar strengths as mine may also fit well in Walmart Corporation since they will be able to correctly perform the required tasks within the organization's marketing department. Examples of these tasks include overseeing Walmart Group marketing budget as well as coordinating the marketing campaigns with the sales operations. The individual's improvement of his or her strengths can be achieved through years of training to gain more experience in their skills.

E. Conclusion

Based on the analysis of Walmart Corporation, it is indisputable that the company's culture and organizational structure play a pivotal role in its success. The company's corporate struc...

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