Problem Statement
Should Wal-Mart be considered a monopoly.
Retail chain is one of the growing business sector around the world that has been facing large amount of growth prospect since the last few decades. With the wake of the brands like Wal-Mart stores, Target, Marks & Spencer, Sears Holdings and others, retail industry has changed by a large amount where the market has become a perfect competition to oligopoly and it has affected the consumption and expenditure habit of the end users too (Reich, 2016). Among these market player, Wal-Mart stores being the largest one has often argued to be monopolising the retails market and it is one of the main debate among the researchers who deal with the retail chain industry. Under this scenario, this report is aimed to trace the validity of the proposition that whether Wal-Mart stores is monopolising the market or not. And in addition to this, this report is aimed to analyse the performance of the Wal-Mart stores through the tool like SWOT analysis and doing so, it will provide recommendation for the management of the Wal-Mart stores in order to gauge the situation.
Considering the growth and the revenue figure, since last decade there has been great amount of debate regarding the fact whether Wal-Mart can be recognised as a monopoly firm or not. some people argue that, with the great amount of revenue and the largest market share, Wal-Mart is the biggest retail chain service provider, where firms like Target, Marks & Spencer, Sears Holdings and others are mere tiny. In addition to this, numbers of stores and the global presence of the Wal-Mart makes it the largest retail chain (Haimson, 2015). Contrary to this, there are many people who argue that, Wal-Mart largest amount of revenue due to their illegal activities and exploitation of the labour. Though it has largest market share, profit margin is less than others making it one of the oligopoly operator.
SWOT analysis is one of the simple yet crucial tool to determine the strength, weakness, opportunity and threat of the Wal-Mart (Martinez et al., 2017). it aids the managers to examine where the firm excels and where it need focus in order to gain further growth. Details of the SWOT analysis of Wal-Mart is as follows:
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Strength |
Weakness |
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· Wal-Mart is known for its wide variety of goods and services and it has aided to become where it is now. · The brand name Wal-Mart has good amount of popularity and it is recognised all around the world that makes it such a retail store on which one can bank upon closing their eyes. · Advanced information system and real time inventory sharing mechanism aids the Wal-Mart to keep their stock up to the mark and it helps the firm to earn higher amount of revenue (Ahmadi et al., 2016). · Large scale of operation, global presence and stores almost in all cities helps Wal-Mart to attain economies of scale. · Versatility in the product range and services makes it different from other · Wal-Mart is not only limited to the US market, rather it has wide array of customers all around the world that guides it to become one of the best retail brand in the world. · Large amount of private employment aids the firm to become a market giant and gain from the same in case of revenue generation (Boyd, 2017). |
· There are numerous amount of lawsuits against the Wal-Mart that hampers the popularity of the brand (Park et al., 2015). · It is often argued that Wal-Mart does not provide fair share of revenue and profit to their workers as well as they exploit the workers in terms of salary and additional benefits. · Wal-Mart lacks in case of the frills experience and ambience of the shops are not enjoyable at all. · Products sold are not guaranteed in terms of freshness. · Employee turnover ratio of Wal-Mart is much higher than the other retail firms and it largely lacks the social responsibility that reflects on the image of the firm (Malesky et al., 2015). · Wages are unequal and the employee growth is not guaranteed here. In addition to this, Wal-Mart does not provide medical service as well as the necessary medical benefit for long term to their workers that makes it one of the worst brand in its sector (Schuetz, 2015). · Wal-Mart enjoys large amount revenue through providing lower wage to their workers and management structure is incompetent in terms of workers benefit that makes it a bad place to work. |
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Opportunity |
Threat |
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· Wal-Mart has great hold in the western market that helps it to enjoy economies of scale in those countries. under this situation, Wal-Mart can introduce more amount of western goods to the developing countries in order to enhance its sales and revenue figures · Having own cafeteria or food court at the shopping centres of the Wal-Mart along with amusement for the children would have entice the sale figures of the Wal-Mart (Munoz, 2018). · Rather than buying the products, if the firm grows the same, then it would have been better for the firm to generate higher amount of revenue. · The firm need to bring in parity among the workers’ wage so as to retain more amount of workers and enhance their productivity and morale. · Wal-Mart need to differentiate its shops in terms of products they are selling. For instance, there should be different store for grocery and different store for other goods and services in order to attract more amount of prospect buyers. |
· Growth of the rival firms is one of the main threat to the Wal-Mart. as the rival organisation grows in size, market share as well as in the revenue figures, it will reduce the number of customers for the Wal-Mart leading to fall in the revenue of the same. · During recession Wal-Mart lacks in case of revenue generation. Aggregate demand of the economy falls and the firm faces scope of having loss on their balance sheet. · Rise in the social threat from the local communities for the Wal-Mart can be provided to be hazardous. Hampering of the local business under the influence of the Wal-Mart hasn’t gone well in several section of the global economy that has forced the Wal-Mart to step back (Woodall & Shannon, 2018). · Growing environmental concern all around the globe is another main issue that the firm need to take care of carefully, otherwise its existence will be in dilemma. Wal-Mart has bad reputation in case of the social responsibility, thus it is essential for the firm to focus on the same. |
One of the main issue that has been found analysing the given article is that the Wal-Mart lacks in the case of welfare of the employees by a large extent and the firm exploits its labour force in terms of wages. Under this scenario, it has become essential for the firm to look into the matter and pay the workers their rightful salary. When it comes to the social responsibility of the firm, there are large number of law suits that the Wal-Mart faces. It need to solve them out and the firm have to operate under the societal norms so as to make it acceptable by a large amount of population of the society (Dunn, 2017). Influenced by the western goods and services, Wal-Mart must not hamper the culture of the eastern or the developing nations, otherwise, it will lead the firm towards destruction and its presence will only be limited to the western countries. The firm need to develop health scheme for the workers as well as their dependants so as to provide the workers a good place to work, where they get paid as much as they work and sustain good health with ease.
SWOT Analysis
Wal-Mart has serious issues with its management and the hierarchical structure of the management provides least amount of flexibility to the workers in the lower section. Employee in the management used to get higher amount of wage, whereas, the less than minimum wage is paid to the workers in the field that makes it a bad place to work. Moreover, lack of the health amenities and amusement makes it a boredom to work and sustain better health. Under this situation, Wal-Mart needs to bring in better health management program and introduce liberalised wage scheme so as to reduce the income disparity among the workers (Joseph, 2015). In addition to this, lower level workers need to be provided better amount of amusement and amenities as well as incentive to work hard, work more than targeted amount. It will not only help the firm to become one of the best retail organisation for shopping rather, it would help the firm to turn itself as one of the best place to work.
Conclusion:
Above discussion has showcase that, there is high scope for the Wal-Mart to become the best place to work. Apart from gaining monopoly in the retail market, it holds the title of largest employer. At present rate of retention it would have lost the tag, however, if the firm focus on the highlighted section, then the firm can become a success story itself soon again.
References:
Ahmadi, M., Dileepan, P., & Wheatley, K. K. (2016). A SWOT analysis of big data. Journal of Education for Business, 91(5), 289-294.
Boyd, C. (2017). How has the Monopoly of the Web effected the economy, society & industry? (Doctoral dissertation, Cardiff Metropolitan University).
Dunn, B. (2017). Class, Capital and the Global Unfree Market: Resituating Theories of Monopoly Capitalism and Unequal Exchange. Science & Society, 81(3), 348-374.
Haimson, M. (2015). Domination: The Consequence of a Modern Day Monopoly (Doctoral dissertation, Department of Business University at Albany, State University Of New York).
Joseph, L. (2015). A Geographic Perspective on the Walmart Neighborhood Market. Papers in Applied Geography, 1(4), 348-355.
Malesky, E. J., Gueorguiev, D. D., & Jensen, N. M. (2015). Monopoly money: Foreign investment and bribery in Vietnam, a survey experiment. American Journal of Political Science, 59(2), 419-439.
Martínez, A. B., Galván, R. S., & Alam, S. (2017). Financial Analysis of Retail Business Organization: A Case of Wal-Mart Stores, Inc. Nile Journal of Business and Economics, 3(5), 67-89.
MUñOZ, C. B. (2018). WALMART WORkERS IN CHILE: A CASE OF UNION DEMOCRACY, MILITANCY, AND STRATEGIC CAPACITY. Walmart in the Global South: Workplace Culture, Labor Politics, and Supply Chains, 87.
Park, S. J., Cachon, G. P., Lai, G., & Seshadri, S. (2015). Supply chain design and carbon penalty: monopoly vs. monopolistic competition. Production and Operations Management, 24(9), 1494-1508.
Reich, A. (2016). Walmart’s Consumer Redlining. Contexts, 15(4), 74-77.
Schuetz, J. (2015). Why are Walmart and Target next-door neighbors?. Regional Science and Urban Economics, 54, 38-48.
Woodall, P., & Shannon, T. L. (2018). Monopoly Power Corrodes Choice and Resiliency in the Food System. The Antitrust Bulletin, 63(2), 198-221
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