SWOT Analysis Of Wal-Mart
SWOT Analysis
After examining the environment of retail industry through five force analysis, SWOT Analysis is used to examine the core of business through internal strengths and weaknesses, and external opportunities and threats.
Strength
For strengths, Wal-mart holds good position in the market, having financial strength, and low inventory turnover ratio. For market position, Wal-mart U.S operates on 2 major industries, such as warehouse clubs and department stores. Figure 1.2 presents that the warehouse segment has HHI of 5,000, indicating high concentration of the market and that imposes high entry to barrier as the incumbents are dominating the market. In the department stores segment, the HHI index is 2,000, which indicates a moderate …show more content…
For liquidity, Wal-mart’s current ratio has declined from 93% in 2016 to only 86% in 2017 (Nasdaq, 2017). The reason behind is that Wal-mart has increased its total liabilities in 2017 by 1,992,000 in one year, resulting from the increase in account payable by 7.49% from $58.65 million in 2016 to $63 million in 2017(see Figure 1.4) (Nasdaq, 2017). Hence, although this would not be a threat for Wal-mart facing bankruptcy or enormous issue, this will put Wal-mart in a short-term disadvantage position when it comes to investment in potential opportunities as the liquidity is …show more content…
As Wal-mart’s online transactions have increased 60% in the second quarter of 2017, Wal-mart is now planning to invest a lot more into the e-commerce market and expect the increase in sales by roughly 40% in the fiscal 2019 (Thomas, 2017). The investment will serve as a platform for the business to operate with high capabilities as it aims to improve point of sales, particularly making customers make purchase quickly. Wal-mart also plans to invest $11 billion into e-commerce market for fiscal 2018 and 2019, in the hopes of capturing market share in the retail industry (Thomas, 2017). This shows the strategic commitment that Wal-mart has when seeing opportunity as the corporation takes small step in capturing the
After examining the environment of retail industry through five force analysis, SWOT Analysis is used to examine the core of business through internal strengths and weaknesses, and external opportunities and threats.
Strength
For strengths, Wal-mart holds good position in the market, having financial strength, and low inventory turnover ratio. For market position, Wal-mart U.S operates on 2 major industries, such as warehouse clubs and department stores. Figure 1.2 presents that the warehouse segment has HHI of 5,000, indicating high concentration of the market and that imposes high entry to barrier as the incumbents are dominating the market. In the department stores segment, the HHI index is 2,000, which indicates a moderate …show more content…
For liquidity, Wal-mart’s current ratio has declined from 93% in 2016 to only 86% in 2017 (Nasdaq, 2017). The reason behind is that Wal-mart has increased its total liabilities in 2017 by 1,992,000 in one year, resulting from the increase in account payable by 7.49% from $58.65 million in 2016 to $63 million in 2017(see Figure 1.4) (Nasdaq, 2017). Hence, although this would not be a threat for Wal-mart facing bankruptcy or enormous issue, this will put Wal-mart in a short-term disadvantage position when it comes to investment in potential opportunities as the liquidity is …show more content…
As Wal-mart’s online transactions have increased 60% in the second quarter of 2017, Wal-mart is now planning to invest a lot more into the e-commerce market and expect the increase in sales by roughly 40% in the fiscal 2019 (Thomas, 2017). The investment will serve as a platform for the business to operate with high capabilities as it aims to improve point of sales, particularly making customers make purchase quickly. Wal-mart also plans to invest $11 billion into e-commerce market for fiscal 2018 and 2019, in the hopes of capturing market share in the retail industry (Thomas, 2017). This shows the strategic commitment that Wal-mart has when seeing opportunity as the corporation takes small step in capturing the