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MGT 488 Week 1-Internal Risk Assessment.

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Running head: INTERNAL RISK ASSESSMENT 1
Internal Risk Assessment
MGT/488
Al Funderburk

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INTERNAL RISK ASSESSMENT 2
Internal Risk Assessment
Wal-Mart operates throughout the world in various segments including super centers,
neighborhood markets, discount stores, and the Wal-Mart website. Wal-Mart was founded by
Sam Walton in 1962 and the headquarters is in the United States. Wal-Mart operates in the retail
industry and offers products at low prices through its discount super stores and neighborhood
markets. Wal-Mart’s net sales for the 2010 fiscal year were approximately $405 billion, a 1%
increase from 2009 (Walmart Annual Report, 2010, p. 15). Wal-Mart also experienced 5.1%
increase in operating profit from $22,798 million in 2009 to $23,950 million in 2010 (Walmart
Annual Report, 2010, p. 15). Further, net profits increased from 7% from $13,400 million in
2009 to $14, 335 million in 2010 (Walmart Annual report, 2010, p. 30). Although the financial
reports illustrate much strength for the company, weaknesses are prevalent within the
corporation as well.
Walmart Stores, Inc.: Strengths and Weaknesses
Wal-Mart has a reputation for providing convenience, low prices, and a variety of
consumer goods. Wal-Mart has experienced tremendous growth because of this reputation and
has expanded internationally. Therefore, Wal-Mart obviously possesses much strength.
Wal-Mart redefined discount retailing and outperformed the industry in profitability by
4.5 % of sales—a 200 % improvement. Four resources—store locations, brand
recognition, employee loyalty, and sophisticated inbound logistics—allowed Wal-Mart to
fulfill customer needs much better and more cost effectively than Kmart and other
discount retailers (Pearce & Robinson, 2009, p. 173).

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INTERNAL RISK ASSESSMENT 3
Wal-Mart has gained a competitive advantage in the market that will prove difficult for other
businesses to overcome, especially during an economic downturn. Customers will continue to
purchase goods offered at low prices while personal budgets are tight.
Although Wal-Mart possesses strengths, the company has weaknesses as well. Public
opinion in some areas has expressed distain of Wal-Mart because of its ability to drive small
businesses out of the market forcing closure for local retailers. Portland, Oregon, is known for its
stance on Wal-Mart as the city has fought to keep the retailer from building additional stores.
Currently, Wal-Mart has one store within the Portland’s city limits, and plans to build a second
store have been turned down repeatedly. The mayor of Portland, Sam Adams, is recorded as
saying, “this is a company that has my enmity. They treat their employees poorly and the
communities they go into with total disdain" (Frank, 2009, para. 4).
Marketing Strengths and Weaknesses
Wal-Mart’s primary objective is certainly obvious; low pricing. Wal-Mart’s purpose is
simple, ““We save people money so they can live better” (Corporate, 2010, p. 1).Wal-Mart
definitely has followed and achieved its purpose. Wal-Mart persistently has exhibited its ability
to accomplish this objective and expanded the company to be the number one retailer in the
world.
Wal-Mart experiences the most difficulty in expanding into market areas. Many small
towns throughout the United States deny Wal-Mart from penetrating the local market because of
the economic affects Wal-Mart is known for. Many small businesses are forced to close because
of the inability to compete with Wal-Mart’s pricing.
Human Resources Strengths and Weaknesses

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