Walmart SWOT Analysis
Walmart is among the major competitors in the retail industry and it has managed to secure significant control in the markets it operates in both locally and in the international market. Since it was founded in 1962, the company has over 11718 stores in the 28 countries it operates in. its corporate policy combined with the 2.3 employees working towards accomplishing the company objectives has helped the company to achieve a large market share in all the regions it serves (Berg & Robertson, 2012). The main objective for the company is to help its customers save money yet still live comfortably by ensuring setting low prices for its products and services. The company also innovates its products and services to ensure that customers can access high quality products at their convenience. The company has an Every Day Low Prices policy which strives to set the lowest prices possible for all its products. By maintaining the high quality that customers have gotten used to, the company is able to develop customer loyalty especially with the inclusion of Ecommerce which makes it easier for customers to access Walmart products. Although Walmart has maintained a huge market share over its years in operation, the leadership policies used have greatly challenged its success in today’s society and lack of good management has made it difficult for the company to satisfy its customers’ needs.
Walmart uses the transactional theory approach which gives most of the authority to the management. Managers are tasked with various responsibilities that are fulfilled through the various leadership practices. Managers within the company are responsible for supervising employees and helping them to meet the company’s objectives (Hargaden & Sills, 2014). Leaders in the company often rely on corridor supervision where management responds to the immediate needs of both customers and employees. Although effective, the method often requires leaders to make rushed decisions that may not always satisfy the customers or employees. Another leadership quality practiced at Walmart is organization where the leaders are tasked with the responsibility of assigning duties and setting up teams needed to meet the goals set by the company. When organizing, leaders use information related to employee skills and experience, the requirements needed to successfully accomplish a specific task and the time frame in which a task should be accomplished. Lastly, leaders are responsible for maintaining appropriate group performance levels and this is achieved through the Risk vs. Rewards approach (Gandossy & Sonnenfeld, 2004). When employees perform exceptionally well, they are rewarded with bonuses, retreats and acknowledgements such as being labelled employee of the month. Failure on the other hand is reprimanded to discourage employees from being laxative or failing to take their responsibilities with the level of professionalism expected by the management.
Although Walmart has been relatively successful in the retail market, the current leadership has had negative implications on the company’s organizational culture as it makes it difficult for employees to fulfill their duties. This is especially because the company does not place enough effort in training employees and addressing their needs as it does in satisfying customers’ needs. The company has had a significant number of lawsuits due to its poor treatment of employees and lack of an ideal working environment (Mourdoukoutas, 2016). Some of the issues that employees raise include unequal wages, poor working environments, unpaid overtime and poor benefits for the work the employees perform when fulfilling their duties. The poor treatment has greatly affected the company’s organizational culture as employees are not motivated enough to perform their duties to the best of their capabilities. Lack of motivation has made work monotonous because employees only strive to achieve average performance. Most people who work for Walmart only focus on fulfilling their duties with little interest in improving quality of service or finding better ways to carry out tasks assigned to them.
SWOT Analysis
While the challenges at Walmart make it difficult to meet the set goals, the company can rely on its strengths and opportunities that exist in the market to build on weaknesses and overcome threats. One major strength that Walmart has is its brand (Berg& Roberts, 2012). The company brand is recognized across the different parts of the world the company operates in. Being among the largest retailers, the company brand is also associated with quality products and this makes it easy to attract and retain customers (Kneer, 2009). Another strength is the incorporation of new forms of technology to assist in keeping inventories, establishing good customer relationship and improving the ease in which customers access its products.
One major weakness for Walmart is the negative image created due to the poor treatment of employees at Walmart. The company is known for the lawsuits and high employee turnover which creates a negative image for the company brand. There is also the issue of inferior products that further degrade the company brand (Smithson, 2019). In line with Walmart’s strategy of offering the lowest prices possible for its products, the company also stocks low end products that some shoppers view as inferior. The association with such products reflects poorly on the company and its products and customers seeking luxurious products may opt for other retail businesses from competitors.
Walmart’s success in the international market creates opportunities such as the chance to serve developing countries in different parts of the world. Developing countries have more disposable income and are therefore ideal targets for Walmart products (Amanchunkwu et al, 2015). The developing countries are ideal markets as the competition is not stiff and Walmart could assert its dominance and make market entry difficult for competitors. Another opportunity is the potential for new business in the regions that the company already has branches in. Most Walmart stores also have a McDonalds that sells fast foods. The company can opt to start its own cafes and fast food restaurants as a way of getting more income from its customers.
Competition is the major threat that Walmart faces. Companies like Target and Carrefour are major competitors and their presence in the market makes it more challenging to attract and retain customers. Another threat has to do with the price for commodities which makes it difficult for the company to maintain its policy of offering the lowest possible prices (Faarup, 2010). High manufacturing costs forces Walmart to raise the price of its products and some customers may view this as a deviation from the company objective to help customers save money by offering low priced products.
Leadership evaluation
The primary leader at Walmart has various strengths that assist in performing the duties delegated to him. The leader has successfully mastered the requirements of a situational leadership theory approach. The leader has good decision making skills which greatly assist in managing the large number of employees. Since decision making is reserved to top management, the leader has to make most of the serious decisions that help make profits (Achua & Lussier, 2012). Another strength is his visionary skills that enables the leader to anticipate customer needs and wants. An example is the sundown rule that strives to answer customer queries and resolve conflicts before close of business. The leader is also a good team player and often leads by example. Even though there is a tense relationship between employees and management, the leader has managed to run an effective team and achieve company objectives. Situational theory gives leaders the liberty to determine the most appropriate course of action depending on the situation being resolves (Clarke, 2005). The good decision making skills; being a visionary and a team player ensures that the leader has the tools needed to adapt to any challenge and come up with the most appropriate solution in line with situational leadership.
While situational leadership requires swift decision making, the leader tends to be hesitant before making decisions and this greatly slows down operations. Another weakness is the leader’s poor delegation skills. While situational leadership requires a leader that adapts quickly, the leader faces a lot of challenges when delegating duties especially when resolving a conflict (Bertocci, 2009). The leader spends too much time assessing the most appropriate course of action and more time is wasted before determining the best employees to carry out specific tasks. The leader also faces challenges when communicating with employees. In scenarios where a situation requires involving other leaders, the primary leader fids it challenging to communicate what needs to be done and this makes it difficult for them to adapt to the challenges as is a requirement under situational leadership.
The leader can implement the use of theory based practices and follow the requirements of the situational leadership approach to maximize his success and also that of the business. One practice that can be used is individualized consideration where the leader provides support, training and motivates individual employees to make them better at their jobs. Motivated and skilled employees are best suited to adapt to adapt to the requirements of situational leaderships as they have the motivation and competence needed to adapt (OUP, 2010). There is also management by exception whereby leaders focus on standards set by the organizations and assesses whether employees adhere to them. Since situational leaderships adapts to situations, management by exceptions ensures that the same problems do not keep reoccurring once they have been resolved. Lastly, the leader can use inspirational motivation to encourage employees to maintain the expected quality of work. Under situational leadership, adhering to the job requirements reduces the occurrence of negative implications in the company and therefore assists in maintaining a conducive working environment.
References
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