Developing the Marketing Strategy for WalMart
The essential strategy the company adopted was to establish a solid ground in the home soil by concentrating on building the local US market before venturing into the overseas markets. The exploitation of the home market enabled Wal-Mart to amass a wealth of experiences and resources to invest abroad. This report undertakes a thorough analysis of the current position of Wal-Mart on the global retail market to determine the company’s viability for market expansion. Wal-Mart’s Product Portfolio Wal-Mart is a retail firm offering an extensive amount of products and services at low prices. Since the firm’s retail products are its retail services, the company is considered a service business too. The most appropriate business tool to use in analyzing a company’s internal and external environment is the SWOT analysis tool (Shabanova et al.
Wal-Mart’s SWOT provides an insight on the interaction of the internal and external forces which are significant in establishing a strategy in the global retail industry. Essentially, Wal-Mart’s market expansion entirely depends on its ability to leverage on its strengths. In spite of its numerous weaknesses, the company’s strengths cannot only help it to exploit its opportunities but will also enable it to counteract its threats in the international retail business. a) Wal-Mart’s Strengths Wal-Mart derive most of its strengths from the huge size of its retail business. Most of the firm’s opportunities are emerge from the dynamics in the global economy that may provide avenues for improving its business practices. Wal-Mart’s opportunities include: • Expansion in the emerging markets • Improvement in Human Resource policies • Decrease shipping costs • Improvement in quality standards • Use of technology to increase efficiency and profits Wal-Mart has the opportunity to expand its business operations in the developing and emerging markets due to their high economic growth potential (Hicks 2007).
The company has been attracting a lot of criticism due to its poor employment practices, and thus it has the opportunity to improve. The opportunity to improve its quality standards is driven by the concerns of the customers over the low-cost and often low-quality products. d) Wal-Mart’s Threats The threats facing Wal-Mart’s business emanate from the prevailing local and global market conditions coupled by the change in customer perceptions about the company’s products. Wal-Mart will have to adopt segmentation strategy to understand the various sub-segments of customers in the new markets and their changing needs. The company should adopt demographic and psychographic segmentation strategies to help it understand the customers’ psyche and their everyday needs. Additionally, the management should focus on a single customer segment who attach value on the price attribute of the product.
The proposed growth will work well if Wal-Mart adopts undifferentiated targeting strategy, taking everyone as a prospective customer. However, the firm should pay particular attention to the young consumers to achieve a long-term loyalty from the cohort. To attract a huge number of customers, the retailer will continue to use its “Every Day Low Price” pricing strategy. However, Wal-Mart will have to adopt a variety pricing strategy to maintain its cost leadership in the new developing markets. c) Promotion Wal-Mart will have to invest sufficient resources in promoting its products in the new markets for the company to attract large customer base and develop a brand image. The firm will have to adopt a variety of promotional strategies including public relations, sales promotions, personal selling as well as advertisements.
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