Wal Mart : The Biggest Retailer Of The World With A Revenue Greater Than $ 485 Billion

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STRENGTHS : ● Wal-Mart is the largest retailer in the world with a revenue greater than $ 485 billion and a network of over 11000 stores spread out across 27 countries. As of January 2015, Wal-Mart served around 260 million customers weekly through its over 11,000 stores under 72 banners in 27 countries and e-commerce websites in 11 countries. ● The size gives it power over its suppliers as well as a strong market position. Due to its vast operations , Wal-Mart enjoys economies of scale and thus has kept a steady gross margin for the past 5 years between 24% and 25%. Similarly, Operating margin has been maintained at 5.9% on average which shows its control over costs. ● Wal-Mart, has a high Inventory turnover. For the fiscal year…show more content…
This system collects real-time information about customer’s orders, tracks inventory and shares detailed information about the company’s condition for better decision-making and more efficient supply chain management. ● Wal-Mart practices a Cost leadership strategy and offers a broad assortment of products at very competitive prices by implementing programs such as Every day low price, savings catcher , etc. Weaknesses: ● Wal-Mart faces High Employee Turnover rates that result in higher training costs for new employees. It also results in lower efficiency during first few months of employment of the new staff. One of the reasons is due to employees being hired on part time or contractual basis and routinely having assistant managers perform same tasks as hourly employees that includes greeting customers, taking inventory etc. ● Wal-Mart has a Current ratio < 1 or a negative net working capital ratio which reflects negatively on its ability to cover short term debt with its short term assets. ● In terms of products, Wal-Mart does not offer any differentiation as compared to its competitors . Thus it cashes majorly on the low prices it offers. This could be effected if the average consumer 's income levels increase as the major cost leadership strategy Wal-Mart practices will not be as effective any more. Wal-Mart 's strategy which is based on a model that consists of selling a range of low- and higher-end goods at a very low markup. The low markup means that in
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