Wal-Mart Analysis

Wal-Mart has been successful in the United States because of their buying of manufactured products for less then as a result passing their savings onto consumers. This has led to their expansion all over America and throughout the world. They have modeled their way around selling products cheaper, thus, changing the way we as consumers shop. They have also managed to outgrow all other retailers within their industry. Not to mention create a multi-billion dollar company in the process.

Product Life Cycle

Wal-Mart is one of the leading retail stores in the U.S. and is quickly growing around the world as well. Today however, Wal-Mart appears to be at the end of its growth and starting to reach the beginning of its maturity stage. There are over 6,000 stores within the U.S. alone and the growth rate percentage is steadily leveling out.

Product Life Cycle

U.S.

Intro

Growth „П

Maturity

Decline

As we can see in my graph, it is believed that the U.S. is nearing the saturation point of Wal-Marts, nevertheless, with the developments of Wal-Mart Super Centers and increasing housing developments around the country the question arises, ÐŽ§is Wal-Mart done growing?ЎЁ However I donÐŽ¦t believe so, because their will be more and more Wal-Mart stores being built as long as sells from existing stores continue to increase.

P.E.S.T.E.L. Analysis

I. Political, Legal, Government

a. Employment Laws & Government Regulations

b. Class Action Law Suits, Business Contracts

An opportunity Wal-Mart faces is the potential to grow their Super Centers and enter into the grocery market. Relatively, there are a lot more traditional Wal-Mart stores around the U.S., however, the popularity and awareness of the Super Center is continuing to grow. An important issue Wal-Mart must be aware of is their opposition by opposing communities. They have experienced this a little bit in certain cities around the U.S. and will need to be conscientious of this potential problem.

II. Economics

a. Gas/Oil prices for delivery & transportation

b. Interest rates, Disposable Income

Economically speaking for Wal-Mart to maximize their profits they must have an efficient supply-chain management system in place throughout the organization. This can prove to be costly if not optimized because of todayÐŽ¦s rising gas, energy and oil prices around the world. Also, simple economics tell you that as interest rates go up around the United States, peopleÐŽ¦s income decreases, causing them to consume less.

III. Social, Cultural, Environmental

a. Convenient Shopping

b. Population Growth (Hispanic Population Increase)

c. Healthier / Organic trends

The organic food and product market is one of the fastest growing categories in food retailing and Wal-Mart has noticed. According to Datamonitor, Wal-Mart focuses on being the low-price leader in organics, not just in food, but also in clothing and other household products. Environmentally speaking, a recent report in the WSJ noted that retail Wal-Mart has intent on becoming a "clean energy force," with plans to sell energy-efficient lighting, improve fuel efficiency of its trucks and use solar power.

IV. Technology

a. Supply Chain supported by I.T.

b. Transportation

c. Internet Technology (Online Shopping)

Wal-Mart is taking advantage of the opportunity that presents itself on the internet today by having internet shopping. Wal-Mart has created an easy to use website which allows you do almost everything you could in the actual store (i.e. buy, return, refund, rebates). This site could helps Wal-Mart distribution of products to specific locations and cut down on transportation costs.

Industry Analysis / Threats

I. Rivals

Wal-Mart faces competition world-wide, however specially in the U.S. alone they compete directly with companies such as Target, Costco, Home Depot, Sears, and Kmart. With Wal-Marts vision of expansion so does competition and this facilitates slower industry growth. Also, being number one means that you are the target of competition, locally and globally.

II. Entry

In this particular industry the barriers to entry are almost impossible due to Wal-Marts dominant presence. Wal-Mart is significantly influential on the industry in general and this is true whether youÐŽ¦re a firm already in the industry or looking to enter. Wal-Marts price control supremacy allows them to engage in an unfair battle of ÐŽ§price wars.ЎЁ Wal-Mart

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