Categories: SWOT Analysis

TOWS Analysis of Wal-Mart

TWOS is the acronym for threats,weakness,opportunities and strengths both refers to the same thing. SWOT or TWOS analysis use by the firm to develop strategies or we can say possible set of strategies. Strategist prefer SWOT or TWOS because it gives alternative set of strategies which help the firm to choose the strategies suit the firm in terms of available resources.

Strengths

1- Strong customer loyalty

2- A well recognized brand all over the world.

3- Affordable pricing

4- Offers customer oriented products

5- Diversified/differentiated products

6- Wal-Mart shares its stock and profits with its employees.

7- Customers who are members of SAM’s club are able to buy in bulk.

8- Offers Satisfaction Guaranteed Program to create goodwill amongst its customers.

Weaknesses

1- Wal-Mart has no formal mission statement.

2- Wal-Mart‘s has a vast product line but may lack some flexibility to compete against its rivals in some sectors.

3- No reaction towards the incompetent employees.[sky]

4- Store policies are obsolete.

5- Lack of female employees’ empowerment.

6- Wal-Mart faces many difficulties in countries like India and China.

Opportunities

1- In the economic slowdown many consumers prefer to bargain, this will benefit Wal-Mart to further increase its sales.

2- As many retail businesses are on decline due to drop off in disposable incomes. Therefore,Wal-Mart is able to increase its customer base by providing bargaining to the potential customers.

3- Online shopping has become very common.

4- European and Asian market are still unexploited by retailers.

5- Consumer’s buying patterns are similar worldwide.

6- The retail sales are expected to increase in the long term.

7- Strong distribution network.

Threats

1- Strong competitions amongst its rivals.

2- As a global retailer, Wal-Mart has to face political instability in the country which they operate in.

3- Intense price competition can become a threat to the company as the manufacturing cost becomes low because of outsourcing from other regions of the world and therefore has lead to price deflation.

Strengths/Opportunities (SO Strategies):

1- Being a well recognized brand known as retail market leader, Wal-Mart can take advantage of this major strength by allowing customers to go for bargain and offers discounts as well while other retailers don’t do this so often. (S1,O1)

2- During economic slowdown most of the people disposable income gets reduced. At this time, Wal-Mart is able to gain/retain customer’s loyalty by offering products at affordable prices. (S3, O2).

3- As the trend of online shopping has grown more over the years, Wal-Mart can keep its customer up to date and allows them to order online by offering customer oriented products. (S4,O3)

Weaknesses/Opportunities (WO Strategies):

1- Wal-Mart has to set a clear mission statement as there is lot of potential increase in retail business in the future and this is one of the reasons, Walmart could not achieve profits in other countries like India. (W1,O6)

2- Since customer buying patterns are similar across the world, Wal-Mart can update its customers about its new products and policies on internet as well. (W4,O3)

3- European and Asian markets are still unexposed to retail shopping; Wal-Mart can make use of this advantage by market expansion in other locations of the world by offering products at cheap prices specifically at the time of economic instability. (W6,O4)

4- Wal-Mart can also widen its distribution worldwide by exploiting countries unlike its domestic market. (W6,O7)

5- Wal-Mart should provide benefits to its employees who will boost up the morale of the employees and leads towards the sustainable growth of the organization. (W5,O6)

Strengths/Threats (ST Strategies):

1- Wal-Mart has a strong brand image; it can face a massive competition against its rivals. This can be avoidable by offering differentiated products at affordable prices (S1, T1) (S5, T1).

2- Wal-Mart has been able to develop a brand value that is able to sustain itself even at the time of economic/political instability in the country which they are operating by introducing differentiated products and satisfied guaranteed programs to create goodwill with the customers (S5,T2) (S8,T2).

Weaknesses/Threats (WT Strategies):

1- To avoid any tough competition, Wal-Mart should focus on existing product line or to remain above the competition by investing more on advertising campaign to keep its competitors always on pressure (W2, T1).

2- Make a thorough study of the foreign market and adapt according to their culture to establish itself in the Asian/European market.(W6,T2)