segments of the general environment that would affect the company most:
world is moving faster and the magnitude of the changes, and their influence on
business, seem larger than I can remember. In retail, the things made possible
by technology are fundamentally transforming this industry.”
McMillon (President and CEO, Walmart Stores Inc.)
is world’s largest retailer with 11,695 stores in 28 countries and e-commerce
website in 11 countries. Company has rich experience of more than 50 years.
Technology, according to the CEO of the company, has been one of the key
factors behind the success of the company.
to Forbes article on World’s Largest Retailers 2017
adoption of e-commerce website has increased rapidly, making Amazon world’s
third largest retailer. Alibaba and Amazon are increasing their share of the
pie with the technological expertise and by developing the culture of
innovation within the organization.
description in CNN Tech of a test store opened up by
Amazon, AMAZON GO, is example of such innovations. In this store in Seattle,
one doesn’t need to stand in line at the checkout. One can pick-up his needs
and just leave the store, amount will be deducted from the account
technological advancements can either be strengths of Walmart or weakness in
has presence in 28 countries in world. It serves more than 260 million
customers every week, across the world. Walmart every-year invests considerably
large sum of amount in it’s subsidiaries abroad, which makes it vulnerable to
the effects of recent wave of de-globalization.
like Alibaba can also reduce company’s market-share in the USA with their unique
offerings. Chinese produces can offer cheaper products to American consumer via
Alibaba, which is threat to retailers like Walmart and American manufacturing
of such reasons global segment could affect Walmart.
most significant forces of competition in case of Walmart:
Five forces of competition
of new entrants: Low
of substitute service: High
power of buyers: High
power of suppliers: Very Low
among existing competitors: Very High
of the most important factors among these five:
1. Bargaining power of suppliers: Very
2. Rivalry among existing competitors:
Bargaining power of suppliers:
Retail industry low priced procurement is one of the most important factors to
ensure profitability. Walmart is using its position of strength in a very
is largest seller of world’s one of the largest FMCG companies PnG. Walmart
ensures that is gets PnG products at the cheapest rates in the world and no
other player in the world can compete Walmart on the price of those products.
Rivalry among existing competitors:
in world is rapidly shifting from offline to online. It makes Amazon (3rd
largest retailer in the world) and Alibaba (6th largest retailer in
the world) biggest rivals of Walmart.
online retailers have developed their competencies because of which they are
rapidly closing in on Walmart. Reported
by Forbes in one of its articles.
has been increasing its online presence but treats from these competitors is significantly
the company might do to improve its ability to address these forces in the near
o Develop strategic partnerships with other
FMCG companies like Netsle, Uniliver etc. for lowest cost procurement
o Rapidly develop e-commerce capabilities.
o Develop some of the unique offerings,
that make customer visit the store.
o Improve its presence in terms of
o Leverage existing technology
o Sophisticated training programs foe
o Time saving and customer centric approach
Threats affecting the
from online retailers like Amazon, Alibaba etc.
adaptability of online retail
in bargaining power of buyer in retail industry