SWOT analysis of Walmart (5 Key Strengths in 2021)

Ovidijus Jurevicius | May 15, 2021

SWOT analysis of Walmart Inc.

This Walmart SWOT analysis reveals how the largest company in the world uses its competitive advantages to dominate and successfully grow in the retail industry.

It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. If you want to find out more about the SWOT of Walmart, you’re in the right place.

For more information on how to do a SWOT analysis please refer to our article.

Keep reading.

Company Background

Key Facts
Name Walmart Inc.
Founded July 2, 1962
Logo
Industries served Retail
Geographic areas served Worldwide (11,443 stores in 26 countries)
Headquarters Bentonville, Arkansas, U.S.
Current CEO C. Douglas McMillon
Revenue (US$) 559.151 billion (2021) 6.7% increase over 523.964 billion (2020)
Profit (US$) 13.706 billion (2021) 9.8% decrease over 15.201 billion (2020)
Employees 2.3 million (2017)
Main Competitors Alibaba Group Holding Limited, Amazon.com, Inc., Best Buy Co., Inc, Costco Wholesale Corporation, Kmart Corporation, Schwarz Group, The Kroger Company, Target Corporation, Walgreens Boots Alliance, Inc. and many other retailers/wholesale companies.

Walmart business description taken from the company’s financial report:

“Walmart Inc. ("Walmart," the "Company" or "we") helps people around the world save money and live better – anytime and anywhere – by providing the opportunity to shop in retail stores and through e-commerce.

Through innovation, we strive to continuously improve a customer-centric experience that seamlessly integrates our e-commerce and retail stores in an omni-channel offering that saves time for our customers.

Each week, we serve over 240 million customers who visit approximately 11,400 stores and numerous e-commerce websites under 54 banners in 26 countries.

Our strategy is to make every day easier for busy families, operate with discipline, sharpen our culture and become digital, and make trust a competitive advantage. Making life easier for busy families includes our commitment to price leadership, which has been and will remain a cornerstone of our business, as well as increasing convenience to save our customers’ time. By leading on price, we earn the trust of our customers every day by providing a broad assortment of quality merchandise and services at everyday low prices ("EDLP").

EDLP is our pricing philosophy under which we price items at a low price every day so our customers trust that our prices will not change under frequent promotional activity. Everyday low cost ("EDLC") is our commitment to control expenses so our cost savings can be passed along to our customers.

In fiscal 2021, we launched Walmart+ in the U.S., a new membership offering with omni channel shopping benefits that currently include unlimited free shipping on eligible items with no order minimum, unlimited delivery from store, fuel discounts, and mobile scan & go for a streamlined in-store shopping experience.

We are enhancing our ecosystem with our omni-channel capabilities, stores, services, e-commerce sites and supply chain combined with our more than 2.3 million associates as of January 31, 2021 to better serve our customers. Together, we believe these elements produce a flywheel effect which creates customer relationships where customers view Walmart as their primary destination.

We are engaged in global operations of retail, wholesale and other units, as well as e-commerce, located throughout the U.S., Africa, Canada, Central America, Chile, China, India and Mexico. Our operations are conducted in three reportable segments: Walmart U.S., Walmart International and Sam's Club.”[1]

You can find more information about the business in Walmart's official website or Wikipedia’s article.

Walmart SWOT analysis

Strengths

1. Being the largest retailer in the world, with unmatched scale of operations and strong market power over suppliers and competitors

Walmart is the world’s largest company by revenue and the largest retailer in the world.[2] It is also the world’s largest private employer, with more than 2.3 million employees. The company is a retail market leader in the U.S. and is a major competitor in all geographic markets in which it operates.

Figure 1. Comparison of the top 5 retailers in the world in 2021
Walmart Amazon.com Costco Kroger Carrefour
Revenue (in US$ billions) 559.151 294.034 163.220 132.498 87.55
Locations 11,443 576 795 2,742 7,193
Countries served 26 17 12 1 32
Employees 2.3 million 1,298,000 273,000 465,000 322,164

Source: The respective companies’ financial reports[1][3][4][5][6] (Walmart reports its revenue for 2021, but most of its financial year is in 2020, so we compare the company’s 2021 data with other businesses’ 2020 data. Amazon.com’s revenue is for sales made from online stores, physical stores and from third-party seller services only.)

Walmart’s revenue reached US$559.151 billion in 2021, more than Amazon.com and Costco, the two next rivals, revenues combined. The company employed twice as many people than Amazon and owned about 3 times more retail locations than its top 3 rivals.

Forbes listed Walmart as the 19th most valuable brand in the world in 2020[7], worth US$29.5 billion. No other direct competitor, except Amazon, has made it to the Forbes list of the top 50 most valuable brands.

What does ‘being the largest retailer in the world’ mean to Walmart?

  • Economies of scale. The company can share its fixed costs over many products, which makes Walmart one of the cheapest places to shop.

  • Efficient and effective use of resources. Walmart can use its resources, such as distribution facilities, information systems, knowledge and other capabilities and skills, more efficiently and effectively over a large number of locations.

  • Huge gains from implementing best practices. The company can identify better ways of performing tasks, managing stores and hiring new employees and can achieve huge gains by implementing these best practices in its vast network of stores.

  • Experimenting with less risk. The company can engage in many experiments within its stores or in new store formats without the risk of losing a substantial amount of profits or revenue.

  • Market power over suppliers and competitors. Due to its size, Walmart can exercise its market power over suppliers by requiring lower prices from them. The company can also affect the competition by selling selected items at a loss, thus driving competition out of the market.

Walmart’s size and scale allows grants the company a competitive advantage that no other company’s rival can match.

2. International presence

Walmart went international in 1992 through a joint venture with Cifra, a Mexican retail company, opening a Sam’s Club in Mexico City.[10] Since then, the company has expanded globally to become the largest international retailer (by revenue), operating 6,101 retail units in 25 countries outside the U.S.

The company operates under different brand names, such as ASDA in the U.K., Walmex in Mexico and Seiyu in Japan. Walmart’s non-U.S. revenues reached US$121.360 billion or 21.7% of its total sales in 2021, a significant source of revenue.[1]

Figure 2. Walmart’s revenue breakdown by segment 2021

Walmart earned 67% of it's revenue from Walmart U.S. segment, 22% from Walmart International segment and 11% from Sam's Club segment.

Source: Walmart’s financial report[1]

Walmart’s international expansion strategy not only helps the company to grow, but also strengthens the company’s retail leadership position. By growing internationally, the company diversifies its income sources, gains valuable new experience and further benefits from economies of scale.

Access the full analysis... more Walmart strengths, weaknesses, opportunities and threats

Published: May 15, 2021
Format: PDF + PowerPoint
Pages: 31
Words: 6,300
Charts/tables: 13

Price: US$19

What you get

PDF analysis
PowerPoint presentation
Thorough insight into the business
Visualization of data
Comparison against rivals

Table of contents

  • Company Overview
  • SWOT Analysis
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
  • Summary
  • Sources

Sources

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About Ovidijus Jurevicius

Ovidijus is the founder of SM Insight and the lead writer since 2013. His interest and studies in strategic management turned into SM Insight project, the No.1 source on the subject online.

He's been using his knowledge on strategic management and swot analysis to analyze the businesses for the last 5 years. His work is published in many publications, including three books.