Sam’s Club SWOT Analysis Analyzes, Sam’s Club, a division of discount merchandiser Wal-Mart Stores, is one of the nation’s leading operators of members-only warehouse stores. The division runs over 450 stores across the country. Sam’s Club sells to some 41 million customers who pay an annual fee to become members. Members can shop at Sam’s sprawling stores, which are typically 110,000 to 130,000 square feet, and offer more than 4,000 items, from fresh groceries to auto supplies, clothing, and pharmaceuticals.
The clubs also offer additional services such as a mail-order pharmacy, travel club, Internet, and long-distance services, car loans, and discount credit card processing. Mark-up on Sam’s Club items is just over wholesale, so goods at these stores are deeply discounted over other vendors.
Did You Know? Sam’s Club Sells Their Products In Bulk.
Sam’s Club sells to small businesses such as restaurants, daycare centers, and offices, and also markets to individuals. Sam’s Club entered the warehouse club market in the mid-1980s, after Wal-Mart founder Sam Walton studied the success of other similar ventures. After some consolidation in the industry, Sam’s Club leads the market neck-and-neck with close competitor Costco.
This can only be achieved through a firm with extensive knowledge, experience and innovative strategies. To determine the strengths of the company potential, weaknesses, opportunities and threats, it is necessary to conduct a SWOT analysis by Sam’s Club.
Sam’s Club At A Glance – Sam’s Club SWOT Analysis
Company: Walmart Inc.
Founders: Sam Walton
Year of establishment: 7 April 1983, Midwest City, Oklahoma, United States
CEO: Kathryn McLay
Headquarters: Bentonville, AR
Employees (Dec 2020): 36,000
Ticker Symbol: WMT
Annual Revenue (Dec 2020): US$63.9 Billion
Profit net income (Dec 2020): US$4 Billion
Products & Services: Electronics | Office | Home | Furniture | Auto | Patio and Garden Supplies | Children’s accessories | Grocery | Pet Supplies | Health and Beauty | Jewelry | Toys | Sporting Goods
Company Website: www.samsclub.com
Sam’s Club Competitors
Sam’s Club SWOT Analysis – SWOT Analysis Of Sam’s Club
SWOT Analysis Of Sam’s Club analyzes the brand based on its strengths weak points, weaknesses, opportunities, and threats. With Sam’s Club SWOT Analysis it is clear that the advantages and disadvantages are internal factors, while threats and opportunities are external elements. Here we are going to talk about Sam’s Club SWOT Analysis. Below Is The Detailed SWOT Analysis Of Sam’s Club.
Sam’s Club Strengths – Sam’s Club SWOT Analysis
- A track record of success in merging complementary firms via mergers and acquisitions. It has successfully integrated a number of tech companies over the last few years to simplify its operations and create a solid supply chain.
- Outstanding performance in new Markets Superb Performance in New Markets Sam’s Club has built expertise in entering new markets and making a success of these markets. The expansion has allowed the company to create a new revenue streams and diversify its risk of the economic cycle in the markets it is operating in.
- Customer satisfaction is high The company through its dedicated department for managing customer relations is able to attain the highest level of satisfaction with its current customers as well as high brand loyalty among prospective customers.
- A strong free cash flow Sam’s Club has strong free cash flows that allow for resources for the company to invest in new ventures.
- Automating processes has made it possible to maintain the same quality of Sam’s Club products and has helped the company expand and reduce depending on the needs on the marketplace.
- A strong distribution network – Through the years, Sam’s Club has built a solid distribution network that is able to cover the vast majority of its market.
- Reliable suppliers The company has a solid foundation of reliable suppliers of raw material , which allows the company to bypass any bottlenecks in the supply chain.
- Highly skilled and skilled employees through effective learning and training programs. Sam’s Club is investing huge resources in the development and training of its employees, resulting in a workforce that’s not only skilled but also motivated to strive for more.
Sam’s Club Weaknesses – Sam’s Club SWOT Analysis
- The high attrition rate in the workforce – compared with other companies within the field. Sam’s Club has a higher attrition rate, and has to spend more in comparison to its rivals on developing and training its employees.
- The ratio of profitability and Net Contribution percentage for Sam’s Club are below the industry standard.
- There are gaps in the selection offered through the firm. The lack of variety could allow a new competitor to gain position on the market.
- The structure of the organization is in line with the present business model, thereby limiting expansion of adjacent product categories.
- A limited success outside of core business . Sam’s Club is one of the top organizations in its field, it has had difficulties transitioning to other product segments within its current style of operation.
- Poor at forecasting the demand for its products which results in higher rates of missed opportunities than its competition. One reason behind the inventory levels are high relative to its rivals is because Sam’s Club is not very proficient at forecasting demand and they will end up with a higher stock both in-house and through channels.
- The company is not in a position to meet the challenges presented by the newcomers in the market and has been losing market share in small-scale categories. Sam’s Club has to build internal feedback mechanisms directly from the sales staff on the ground to overcome these issues.
Sam’s Club Opportunities – Sam’s Club SWOT Analysis
- The reduction in transportation costs because of reduced shipping prices could reduce the price of products offered by Sam’s Club, thus offering a chance to the business – either to improve its profit margins or transfer the advantages to its customers to increase market share.
- Government green drive also offers the possibility of purchasing Sam’s Club products by the state and the federal contractors of government.
- Lower inflation rate. The lower inflation rate provides more stability to the market, allow credit with a lower interest rate for members from Sam’s Club.
- The latest technology offers an opportunity for Sam’s Club to practices differentiated pricing strategies in the current market. This will allow the company to retain its loyal customers with top service as well as attract new customers by offering other attractive offerings.
- The latest trends in consumer’s behavior could open up a new markets for Sam’s Club . It is an excellent chance for the company to develop new revenue streams , and broaden its product offerings as well.
- New customers come from the online channels – In the last couple of years, the company has poured a large amount of money in the platform online. This investment has led to the opening of a an entirely new sales channel to Sam’s Club. In the coming years, the company can capitalize on this opportunity by understanding the needs of its customers better and meeting their needs with large data analysis.
- A new environmental policy – The opportunities will result in an even the playing field to players in the market. This is a fantastic chance to Sam’s Club to drive home its advantages in the field of technological advancements and increase its sales in the emerging product category.
- The development in the market will result in the dilution of competitive advantage, and will allow Sam’s Club to increase its effectiveness in comparison to its competitors.
Sam’s Club Threats – Sam’s Club SWOT Analysis
- The laws governing liability in different countries differ as well. Sam’s Club may be exposed to a variety of liability claims due to modifications to policies in these markets.
- The company may be sued in a variety of markets, due to the different laws and constant fluctuations regarding the quality of products sold in those markets.
- The shortage of skilled workers in certain global markets is an obstacle to the an increase in profits that is steady at Sam’s Club in those markets.
- New regulations on the environment under the Paris convention (2016) could pose an issue for certain categories of products .
- The growing trend towards isolationism in the American economy could trigger similar responses from other governments and negatively impact international sales.
- The rising cost of raw materials could pose an issue for Sam’s Club profitability.
- The rising pay rate, particularly movements like $15 per hour, and rising prices in China could put severe impact on the profits of Sam’s Club
- The demand for high-profitable products is seasonal and any unpredictability during peak times could affect the financial performance of the company in the short to medium-term.
This is the SWOT report that Sam’s Club has done. Please let us know if you have additional suggestions to add.
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