1a. Wal-Mart is a US based multinational retail company that sells general merchandise and groceries. It has grown over the last fifty years into the largest retailer in the world. Today, nearly 260 million customers visit more than 11,500 stores under 65 banners in 28 countries and e-commerce sites in 11 countries each week. With fiscal year 2015 net sales of $482.2 billion, Wal-Mart employs 2.2 million associates worldwide – 1.4 million in the U.S. alone.
One of the strengths of Wal-Mart is the scale of operations. Wal-Mart is the largest retailer in the world with more than $400 billion in revenue and 10,130 stores. It makes Wal-Mart a giant retailer that is very difficult for other companies to compete with. Due to such large scale of operations, the company can exercise strong buyer power on suppliers to reduce the prices. It can also achieve higher economies of scale than competitors because of its size. Higher economies of scale results in lower prices that are passed to consumers.
Another strength is cost leadership strategy. This strategy has helped Wal-Mart to become the low cost leader in the retail market. Wal-Mart sells products at the lowest price possible and providing a no frill services to achieve higher economies of scale and attract huge numbers of consumers. It sells products at much lower prices than competitors do, builds warehouse style superstores that contain extensive range of products but doesn’t offer much additional benefits or services. All of this result in cost reductions and lower prices for consumers.
However for Wal-Mart’s weaknesses, they face many labor related lawsuits every year, which costs millions of dollars for the company. It is criticized for poor work conditions, low wages, unpaid overtime work and female discrimination. In addition to litigation costs, corporate’s reputation has been damaged and fewer skilled workers