Wal-Mart Pestel Analysis

Introduction

Wal-Mart is a well known international brand with a chain of stores in United States. It has a wide collection of generally known products for the consumer. It offers private label retail across different product categories such as apparel, household items, entertainment, and grocery. With presence in worldwide markets, it has established a dominant position. It markets a variety of products to meet the consumer requirements (Mike Pereira 2002).

The company was established in the year 1962 in US. Michael Duke is the present CEO and it has a workforce of 2,200,000. It is well placed to meet the demand out of increased trades Wal-Mart has combined technology and international standards of marketing and retailing to provide consumers with their favorite products. After humble beginnings in the past, it has grown up to be a household name throughout the world. It strives to progress by harnessing the versatility and available opportunities (SFU 2014).

The marketing has usually be targeting the working families to get their choice of products at affordable and reasonable prices. Wal-Mart also has ecommerce online stores which gives a shopping convenience to buyers. The business philosophy of the brand is based on prioritizing the consumer above all. Build on a highly effective mechanism; it is committed to provide simple access to over 1,000,000 products.

Wal-Mart has vowed to improve the nutritional stands if its products in the coming years. It aims to lower the levels of salt and sugar and also eliminate transfat. It also contributes in different charitable causes that reach up to $1 billion per year. The headquarters of the company is located in Bentonville, Arkansas. International operations excluding United States stretch up to 6337 stores across the 26 countries. The company gathers and analyzes a wide scale of data based on shopping habits of consumers. It also employs the highest number of people in the United States (WRLC 2009).      

SWOT Analysis

Strength

1. The international store is also the biggest wholesaler across the globe.
2. Fortune 500 ranked it as number one in 2011 and among the largest American companies.
3. The widely spread operations ensure that there is no rival of equal measure.
4. Wal-Mart has the ability to replicate its flagship products on a regular basis throughout the world on unrivalled scale.
5. Wal-Mart can benefit from the low income group of consumers by catering to their rising demands for consumable staples to replace discretionary items.
6. With such flexibility and impact, it has maintained a solid market reputation over the years and continues to do so (Strategy Online n.d.).

Weakness

1. Wal-Mart, being a large box vendor runs different supercenters throughout US.
2. In order to store the new stock, they need a big area. It limits the substantial expansion in those urban areas where the provided space is limited.
3. According to some studies, Wal-Mart has experienced reduced store sales in America for eight consecutive quarters owing to its market place space.
4. It has become significant for the multinational retail giant to deliver as per its strength.
5. There is a need to bring a reshuffled set up which is more suitable in the urban spaces.
6. It has some fierce competitors in form of companies like Tesco and Costco. These brands also aim to go ahead with fresh functional set ups. Provided they are successful, Wal-Mart will be unfortunately in a disadvantageous position.

Opportunities           

1. In the developing economies such as Brazil, South Africa and Mexico, the company has been successful in growing its existence (Hunts Ville 2007).
2. In the future years, customers of developing economies will purchase majority of the globe's good apart from manufacturing a handful.
3. Income growth of Wal-Mart would be impacted by the rising market trends of these fast growing economies (Abahe n.d.).

Threats

There has been a rise in the number of employees in the recent years. It indicates a further possibility of rise in health care costs and labor pays. In the United States, labor expenditure for corporations has increased in line with the rise of wages and health care expenses. As per some business estimation, the health care costs of US workers would go up by 8% in 2012 and more with the passage of time. The increases in medical costs are even outsmarting the inflation and pay rise.

One of the key driving factors behind the rise of medical charges is employee insecurities. They are concerned about losing their jobs and also the health cover. As a result, they are extensively using their health care and even contain it (Sage Pub 2010).

PESTEL Analysis

PESTEL analysis is done to mark the actions that are significant and essential for immediate activation. The six different elements which are external to the organization shows the impact they make to the operations of the company and hence the marketing environment. It also defines the healthy and unhealthy outcome of some factors in the business. The environment, technical expertise and competitive forces keep on changing and it has also impacted Wal-Mart. It has to come up with strategic plans for making fast decisions in a long term basis.