Table of Contents
Walmart Stores Inc. Profile. 1
Retail Industry Description. 2
Walmart Influence in the Retail Industry. 3
Market Expansion Product/Services. 4
Company’s Rationale for International Expansion. 5
Buyer’s Demographic, Psychographic and Lifestyle. 8
Walmart Stores Inc. Profile
Walmart Corporation is engaged in wholesaling and retailing commerce globally. The company operates via the use of three trading segments which are U.S and international Walmart alongside Sam’s Walmart Club (Chekwa, Martin & Wells, 2015). The Walmart segment that is located in the United States is an incorporation of retailing stores as well as the technology or digital retailing business within the United States (Chekwa, Martin & Wells, 2015). The company also provides financial servicing as well as all the other related goods like bill payment, money orders as well as wireless transfers. On the other hand, the International Walmart is mainly involved in the category segment of wholesaling, retailing as well as other business formations outside the United States (Chekwa, Martin & Wells, 2015). The business categories that are within the segment include supermarkets, hypermarkets, electronics, clothing, home advancement, digital retail, drug as well as convenience stores (Timilsina, 2015).
Walmart Company is categorized to be among the top largest corporations in the global context in regard to finance, resources, profitability and market share (Timilsina, 2015). The success has particularly been acquired through the use of strategic marketing and operations. The primary strategies that the company has applied and acquired a competitive position are differentiation and cost leading. Walmart Stores Company is today not only categorized as the largest retailing company globally, but it is graded among the prevalent companies internationally (Chekwa, Martin & Wells, 2015). Walmart as the retail gigantic overpowers its close competition by creating close to three times the general profit that is generated by the seconding global retailer, Carrefour that is a France based company (Chekwa, Martin & Wells, 2015). Locally the company holds more than one million workers which makes it be the largest private employer in the United States. The position that is held by the corporation gives it the highest responsibility of making communal contributions in order to support its operations. Given that it is an organization that has risen strategically its success is particularly payable to the shareholders.
As the leading seller in the retailing industry, the company’s operates under the influence of the philosophy of saving individual’s money in order to ensure that they exist in life’s quality (Timilsina, 2015). The statement is, therefore, a representation of the company’s focus towards lowering the general products and services costs consistently in the quest of satisfying their needs as well as acquiring a foremost position in the retailing sector. The retailing industry is today characterized by intensifying competition by well-established corporations such as Tesco and Carrefour a trend that Walmart acknowledges (Timilsina, 2015). In order to overcome this competition, the primary vision of the company is to raise the general standard of existence to all individuals by ensuring that they provide quality goods at reduced prices a strategy that has played part in growing its consumer base and supported it in becoming the leader in the retailing sector. The company is mainly driven by being a shareholder-centric business where it values the needs and concerns of the employees, consumers, and investors. The company, therefore, strives in increase its shareholders earning while encouraging employees for focus on quality performance which has, in turn, resulted in quality and preference of its services and products among consumers (Timilsina, 2015).
Walmart Influence in the Retail Industry
The company’s mission clearly demonstrates that it is basically focused on the needs of the consumers and its primary stakeholders. In that, it seeks to ensure that it offers quality goods and services at the least prices in order to maximize life’s quality (Hazzawi, Palladini & Martinelli-Lee, 2014). This strategy has served the company significantly, by growing its consumer base and ensured that it outweighs its competitors. It is this focus that the employees are encouraged to work collaboratively which leads to cost reduction and increased demand of its provisions among the consumers. The company’s management additionally incorporates flexible and supportive regulations which encourage the workers to offer their utmost contributions which have assisted the organization in achieving success. Simultaneously the company is able to sustain its cost leading approach given that it is committed to reducing its operating expenses regularly in order to achieve a larger consumer base. With the changing demands and preferences of the retailing market, consumer satisfaction is of the essence in achieving and sustaining success (Hazzawi, Palladini & Martinelli-Lee, 2014). Today, as the demands of the consumers change the consumers are becoming highly sensitive to prices, convenience, flexibility as well as quality and these forces must be accounted in order to achieve satisfaction that leads to competitive positioning and increased sales.
Market Expansion Product/Services
Similarly, to most grocery and retail companies, Walmart provides generic brands which are characterized by reduced prices when equated to the name brand goods (Hazzawi, Palladini & Martinelli-Lee, 2014). Most of the services and products that the company provides are privately labeled but the capacity of production is adequate for Walmart to run the entire manufacturing works. This market expansion that is mainly targeting to venture in Russia and Vietnam will focus mainly on electronic specialty. In that, today, individuals make a higher investment in home and workplace electronics based on technology demands. The electronic specialty will, therefore, be useful for the organization in expanding while targeting the low and medium earning individuals in the market who make the highest populace in both countries. The products were mainly selected given that they are characterized by lesser competition given that the online and the discounting stores have intensified the retailing competition even further. In order for the company to sustain its competitiveness within the industry then it is better to focus on this specialty with little competition and lesser risks in order to establish its self well prior to making additional ventures (Hazzawi, Palladini & Martinelli-Lee, 2014).
The electronic specialty will mainly focus on innovative and quality products. In that individuals are interested mainly by the quality of products despite being sensitive to the prices. The products will be of high quality, easy to operate with the necessary features, convenient and lower prices when compared with what is being offered in the market (Hazzawi, Palladini & Martinelli-Lee, 2014). The products will not only provide entertainment to the consumers but will also be objected at ensuring that their life’s quality is enhanced. The prime priority of the company is to improve individual’s existence through the provision of quality as well as lower prices that can support money saving for other purchases. In addition, the products will ensure that the consumers are well informed in regard to technological innovation. This will not only create flexibility but also convenience in general based on the availability and less need for maintenance. In that quality is bound to serve the consumers for a longer period with fewer expenses which will not only increase their loyalty but also the willingness to make more purchases in general from the company (Ireland, Hoskisson & Hitt, 2008).
Walmart Company creates value by focusing on consumer’s satisfaction. The needs of the consumers must be accounted for adequately in order for value to be created. Consumer satisfaction is, therefore, created by quality as well as low cost. In that consumers might be willing to buy certain products based on the convenience and quality but the premium costs discourage them (Ireland, Hoskisson & Hitt, 2008). This leads to poor life’s quality given that the consumers are not able to enjoy the products. Walmart, therefore, strives to lower its general cost of operation consistently in order to offer quality goods at lower prices without affecting its profitability (Hazzawi, Palladini & Martinelli-Lee, 2014). This strategy has enabled the company to acquire success, a larger consumer base, high profits as well as the leader in regard to offering quality at minimal prices.
Company’s Rationale for International Expansion
Walmart Company has consistently strived to sustain its competitive position given that the retail market is characterized by intense competition. To begin with, the company is required to expand its ventures even further on the ground that there is a large market in the global context that is not yet exploited which would help it in acquiring success in general (Ireland, Hoskisson & Hitt, 2008). The company has the financial size given that its business size is significant in regard to resources, human resource, market share as well as a positive reputation. It is through these forces that the company would withstand pressure adequately. With the significant market share globally this provides the company with more sources for financing acquisition. The expansion, into fresh markets and particularly those that are characterized by more trade risks such as Russia and Vietnam based on the political status in the countries necessitates more resources in creating awareness as well as products familiarity (Williams, 2011). In addition, Walmart contrary to the other retailers has an efficient and dependable chain supply which provides the company with resilience from any threats that might be derived from the market. The supply system is efficient because the company has made the high-technology investment that plays part in the managing as well as controlling of products movements especially from the traders to its stores.
Despite the fact that Walmart has a lot of consumers and has acquired a significant market share the low entry barriers into the retailing market create even higher threats for competition. This, therefore, implies that Walmart must expand into other distinct markets in order to grow its brand and consumer base as the primary approach to fighting the persisting competition (Williams, 2011). Most companies in the retailing industries are also investing heavily on cost leading and differentiation strategies which, therefore, implies that the move is bound to affect its profitability and competitive strategy. The company should, therefore, be searching for fresh international markets in order to sustain its competitive position and grow its market even further. Its leading position is not permanent and therefore measures should be taken in order to guard it against any kind of threats that might affect its profitability as well as share in the market in general (Williams, 2011). More so the company is focused on building high brand images globally which can best be generated via extensive expansion to those market that is not adequately exploited. This will also play part in increasing the company’s efficiency in general given that the company will have the experience to outweigh the benefits over the threats of the investment in general. The expansion will not only bring financial gains but will also be useful in building a wider market share from the different markets. The retailing market, particularly in the United States, is characterized by increased regulations and high competition which affects business profitability. In this context, Walmart can choose to expand in order to avoid the regulation while venturing in markets that have lesser regulations, therefore, promoting business growth (Williams, 2011).
Walmart Stores targets the low and medium earners and not particularly the wealthy individuals. This is individuals who are willing to purchase products of quality but are sensitive to the prices. The high-income earners are not excluded given that the company focuses of superiority of goods as well as services. Given that the products sold are not those that would be accounted as high-end this implies that the company does not target the rich (Williams, 2011). The target for the company is for the larger populace from the individuals in need of finding low-priced products at convenience as well as quality. This is the target populace that the company seeks to ensure that their lives are made to be better by providing satisfaction based on their needs. The products buyers are the users of the products given that sales are made in retail from the stores. The buyers who are the consumers acquire the goods from the company’s stores which are located to their convenience (Williams, 2011). The buyers can be characterized as prices and quality sensitive and therefore the market venture should be guided by quality as well as affordability to attract majority and create consumer satisfaction.
Buyer’s Demographic, Psychographic and Lifestyle
Walmart targets persons of all ages both male as well as females. The minimal education level of the target is high school or college. These are the populace that holds a clearer understanding of the general understanding of quality, convenience and cost efficiency (Williams, 2011). The income level that is targeted is for the individuals or families that are characterized by low up to middle income. This incorporates single individuals, children, and youths, older, married and retired persons. Occupation includes students, laborers, subordinate workers, middle leveled staffs as well as those from the private sector. This is the persons that make products purchases with a lot to inquire about particularly in regard to using, prices and quality (Chekwa, Martin & Wells, 2015). The populace is not particularly loyal to any given brand and when making purchases they are not in specific search of any given brand but they will but the one that is available based on their needs and convenience. The behavioral characteristics of these demographics are that they are in search of benefits which in this case is the cost and quality benefits. Their personality is the restricted or the cost-sensitive based on their limited disposable income. The targeted social classes are the low, middle and the working ones while they might be first-time, probable, regular and products buyers (Chekwa, Martin & Wells, 2015).
It is important to note that Walmart mainly targets persons of all ages through the use of its customized marketing messages. However, specified attention is subjected to the young buyers based on the strategic significance of acquiring young buyer’s loyalty for the long run gains (Ireland, Hoskisson & Hitt, 2008). In addition to the low prices focus, Walmart is able to attract the young buyers through an effective collaboration of online marketing. Based on the group’s sensitivity to prices and quality they prefer the company’s products over those offered by other companies such as Tesco, Trader Joe’s, Carrefour and so on (Chekwa, Martin & Wells, 2015). For the electronic specialty, the target populace is the early adopters. These are mostly the young buyers who are willing to taste technological advancement early. For the young generation, all that is important to them is technology as well as innovation. These are the consumers who are in the changing lifecycle where their needs change gradually. Products are therefore purchased in order to improve their living through creating entertainment on regular grounds (Ireland, Hoskisson & Hitt, 2008).
In order for Walmart to create value in the expansion countries, it will be required to have adequate human resources, stores and reliable supply and distribution channels. In order to sustain its primary values which are low cost and quality the company will be required to operate under low expenses in order to sustain the goods at lower prices and yet quality (Ireland, Hoskisson & Hitt, 2008). This will require it to exploit low labor workforce which will play part in lowering its operative expenses. The company will be required to distribute the products in the country as well as invest on consistent marketing in order to create awareness as well as familiarity with the products given that the expansion is in fresh markets. The consumers should be made to understand the low prices, convenience and quality benefits that the products are bound to offer (Ireland, Hoskisson & Hitt, 2008). The workforce will be playing part in the distribution of products, selling in the stores as well as marketing operations. These will, therefore, require individuals will appropriate marketing as well as consumer relation in order to build better relationships with the public (Ireland, Hoskisson & Hitt, 2008). Marketing and servicing facilities will be necessary in order for facilitating the needs of the consumers as well as the promotion operations that will seek to build familiarity and awareness.
Walmart has made some irresistible developments in the recent years being the largest retailing company globally. However, its competition is mainly driven by several companies which are well established in the industry such as Tesco, Carrefour, Trader Joe’s and Whole foods (Timilsina, 2015). Walmart has, however, made strategic development given that it generates three times the general revenue that is developed by the competitors. However, it cannot be ignored that the companies are well established and have acquired significant shares in the market and are well situated in the global context (Timilsina, 2015). This means that Walmart should expand to fresh markets as well as ensure that it is completely differentiated from the competitors. These are the same competitors that will be competing with the firm in Vietnam and Russia.
Walmart is particularly an authoritative retail brand in the global context. It has created a positive image in regard to its money value, opportuneness and extensive products range in a single store (Timilsina, 2015). Walmart has also acquired substantial growth in the recent period through its global expansion. In other words, the company particularly benefits from its large size, resources and a significant market share (Timilsina, 2015).
The existing opportunities for Walmart are that it can adequately merge or venture through business association by focusing on specific markets. The company’s stores are currently operational in few countries which demonstrates that there are more opportunities to venture globally (Ireland, Hoskisson & Hitt, 2008). There are opportunities where the company can venture in markets such as China, Russia, India, and Vietnam and so on. Fresh ventures offer greater opportunities for exploiting market advancement based on its products diversity. Cost leading, differentiation, and diversity will continue to attract even more consumers (Williams, 2011).
Walmart being the retail leader implies that it is the primary competition target on the domestic and international market. Operating in the global context also implies that the company is being subjected to political issues from the diverse countries of operation. In addition, the general expenses of manufacturing and transporting most of the consumer goods tend to be lower based on demand changes which result in prices competition which is a threat to profitability (Williams, 2011).
As the leading grocery retail, it has an extensive venture which implies that despite its competitive advantage it will become weaker in regard to control based on the large venture. In addition, it lacks focused competitors because its products are primarily diverse. In addition, its presence globally is minimal given that it is only located in few countries which implies that more marketing is a necessity (Williams, 2011).
Walmart is required to expand to other markets based on its need to expand its market, finances, and brand. In this context, it has to increase its global context given that its competitors are rapidly moving into distinct markets globally. Walmart has the capability to succeed in this venture because it has adequate resources, finances, and reliable supply. With a good reputation in the global market, this means that the company can utilize the advantage in building positive relationships in the quest of sustaining its values in products diversity, quality and well as affordability. The expansion is suitable given that it will be facilitated by its strengths despite the fact that it is bound to face competition threats.
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