Wal-mart, ING Group NV and ExxonMobil: SWOT Analysis

Wal-mart, ING Group NV and ExxonMobil Introduction In this document the author carries out a SWOT analysis for three organizations. The three organizations are Wal-mart Stores, ING Group NV and ExxonMobil. The author has written a short case study for each organization, giving an introduction to each organization, their current activities and the threats and issues that they are faced with at present. Wal-mart Stores Wal-mart was founded in 1962 and since that date has been a household name and has continued to grow from strength to strength through the last four and a half decades. Today the name Wal-mart is not common only in the households throughout the United States of America but also throughout the world. Today there is hardly any part of the world that the store has not penetrated. From the North to South and East to West, Wal-mart is known throughout every nook and cranny of the world. The organization has been able to penetrate every continent throughout the world and is in existence in India, China, Vietnam, Korea and many South American countries that have contributed to its success in many different ways. Wal-mart has been known for its bargain pricing of the products and services that it sells. Further it has also been known for a selling and giving access to a wide range of products and services to the consumers from clothing and accessories to household and garden equipment; some of the services provided by the organization are pharmacy services and even photography services. In this manner the organization has been able to put down solid roots in many different countries, cities, towns, villages and communities and become a household name. Further its motto throughout the years has been to save money for the consumer and help the consumer to lead a cheaper but better and higher living standard. These are the reasons that the organization has seen phenomenal growth in the last few years. Wal-mart, throughout the last few years has made immense use of the comparative advantage and moved its manufacturing plants and even its supplier’s manufacturing plants to the east and countries where it could ensure lower production costs. Today most of the products that are sold in the Wal-mart store around the world are from China, a country that has an almost unlimited supply of cheap labour that gives the organization the advantage of lower costs, that results in lower pricing. Another success factor of Wal-mart has been its ability to buy in bulk, sell huge volumes and survive on very low or reduced profit margins. This has enabled the organization to pass on the cost benefit to the consumer and give the consumer more value for money, which has been an important element of its success in this highly competitive business era. However the organization has been facing much litigation in the past few years in the United States, due to some of its inefficient handling of human resources related issues. In the recent years the organization has been accused of unfair treatment of its female workforce – while the litigation is now well behind the organization it has cast a cloud on the employment prospects of employees with the organization and could thus cause a detrimental effect on the organization’s ability to attract, recruit and retain talented and high potential employees in the future. The only manner the organization will be able to avoid such a threat is to manage its communication with the public and to clean up its image as a potential employer. Strengths

  • Established name brand that is identified with reasonable to cheap pricing and bargain pricing.
  • Wal-mart is a store that most individuals when they are on a low budget and still want to buy what they set out to buy – visit.
  • Wide network of stores and therefore it is accessible to all types of individuals whether they are of wealthy means or not.
  • The organization is able to buy in bulk and gain huge bulk discounts that are not available to other organizations and is able to pass on the discounts and pricing benefits to the customers thus further solidifying its reputation as a bargain store
  • The organization deals in all types of goods from clothes to electrical items, from jeweler to garden equipment and therefore caters to a wide range of individuals and needs.

Weaknesses

  • In the last few years the organization has faced much litigation from employees accusing it of unfair employment activities – especially from its female workforce that has given the organization a bad reputation as an employer.
  • The organization has also earned much negative publicity for its strong arming tactics and squeezing suppliers of profit margins by threatening to take its business elsewhere.
  • The goods that are sold by Wal-mart from its Chinese suppliers in the past year have been marred by many different cases of health and safety hazards.
  • The Chinese branches of Wal-mart have had difficulties in establishing themselves in the economy.
  • The organization has been challenged in court over its strong-arm tactics of trying to suppress the unionization of its American workforce.
  • The organization has to allow its Chinese workforce to unionize and the government-backed workers’ federations control the unions.

Opportunities

  • The current economic crisis has decreased the disposable income of many individuals and thus has caused many individuals and households to lower their expectations and to shop for bargains, thus Wal-mart stands to gain in such a situation.
  • The inflation in the economy is on the decline and the economy is on the brink of deflation thus it may mean that Wal-mart is able to provide its customers with increased bargains.
  • Many retail organizations are going out of business due to the reduction in disposable incomes. This can help Wal-mart by increasing its customer base due to the bargains that it can provide its customers.
  • Due to the cheap rate that the organization is able to buy its products from suppliers, it is able to provide customers with even bigger bargains to encourage them to shop at Wal-mart.

Threats

  • The big name retailers such as M&S are giving having huge sales such as 50% off sales; this is difficult for Wal-mart to compete with, as its profit margins are not that great on each unit.
  • The reduction in disposable income of customers and the looming recession and fears of job losses have caused individuals to curtail their shopping and this is a huge threat to Wal-mart, which relies on consumer spending.

ING Group NV Before 1991 ING had been in existence and operating throughout the Netherlands behind many different very strong and well known banks and insurance companies. However it was only in the year 1991 that through the merger of National Netherlanden and NMB Post Bank that ING as it is known today came into existence. Therefore as ING the organization has been in existence for less than two decades, however it has been one of the biggest success stories of the banking and financial industry. This success has not come at the expense of the strength of the bank or through the bank taking unwarranted risks but rather through the most appropriate and most prudent steps to become a well recognized brand worldwide. The name ING is synonymous with innovation and Internet banking. It was this that gave the organization its unprecedented growth prospects throughout the years. The ING group was the first ever, financial services provider to use the worldwide web for its banking activities. The organization came up with the innovative strategy to create a bank that is accessible online and that has no bank branches or front line staff, just a call centre and one branch that would be used for those activities that make face to face contact absolutely necessary such as signing mortgage documents and lending documents etc. By cutting down on the brick and mortar operations the organization was able to cut down on the overhead costs that all banks have to absorb and thus was able to pass on the benefit of these savings to the final consumer the bank’s customers in the form of zero bank charges, lower lending rates and higher saving interest rates. Further with the ability to access ones finances online came the reduced time spent standing in lines, savings in terms of time spent getting to and fro from the bank thus making banking a very pleasant and time saving exercise. This uplifted the profile of the bank in the eyes of the consumer and contributed to its development and growth as one of the world’s ten largest banks. Another factor that contributed to the success of the organization has been its ability to customize its services to suit the different parts of the world that it is located in. For instance the organization is well known for its micro lending facilities in India to uplift cottage industries and empower women in the villages and small communities. Likewise it is very well known for the ING foundation a charity that it operates in different parts of the world. Through the foundation the organization has chosen different charities that it would support and also encourages its staff to participate in ING foundation activities and other voluntary services that has not only helped the organization to climb the ranks as a desirable employer but also as a good corporate citizen. The biggest threat that the organization currently faces is the current economic crisis that has sent most of the large economies in Europe, the United States and the emerging economies into recession. While the organization maybe on firm footing in a financial sense right now, this may change if there is a prolonged global recession. Further as the bank has not been in existence when such occurrences took place in the past, this would prove to be the acid test for the organization. Strengths

  • ING is a long established brand and is known for solidity and has been named in the Interbrand list.
  • The organization has diversified into different financial services, such as banking, investments and insurance thus making it a well-known name and a big player in the financial industry worldwide.
  • ING is well known for its innovative Internet banking activities in the last decade of the 20th century. This helped the bank to be synonymous with being an innovative bank that was on the customer’s side. The bank was known for charging no bank charges and providing customers with high rates of interest and lower lending rates.
  • Further the organization is well known with its innovative products such as the “ING unmortgage”.
  • ING has been in existence in many different countries for many years, either as ING or operating under other established names thus increasing confidence in its name.
  • The organization has grown through mergers and acquisitions as well as through organic growth, thus making it a very strong business entity.
  • The organization is able to cross sell its products and services as it has diversified into so many different areas of the financial services industry.

Weaknesses

  • The organization in some parts of the world like Britain and in North America does not have strong presence when compared with banks such as RBS and BoA.
  • Many individuals have the wrong notion that the organization has no brick and mortar branches and is a virtual bank only – thus denying it of the older and senior citizens market as a customer group.
  • The organization has been growing through mergers and acquisitions more than through organic growth, which in certain aspects can be considered as a weakness rather than a strength.
  • ING had to request for help from the Dutch government in the last month or so, thus projecting an image of weakness – even though in reality this is not the case and the organization is still very strong – it has given it some negative publicity.

Opportunities

  • The current economic crisis has not adversely effected the organization, thus proving that the organization can be trusted with the customers’ money.
  • The collapse of many different banks and insurance companies has given the organization the opportunity to acquire stakes in these banks and grow and expand even further.
  • Further the collapse of such big names in the banking industry has enabled ING to increase its reputation and even climb in rankings when compared to other banks.
  • The organization has taken over the operations of a failed Icelandic bank in the United Kingdom thus increasing its goodwill with the British public and will be able to cash in on this good will at a future date.

Threats

  • If the mortgage crisis and the looming recession should continue for a pro-longed period of time the organization is not going to be able to come out of unscathed as it has done in the past during previous recessions.

ExxonMobil ExxonMobil has been in existence for over a hundred years and is the world’s largest company that is publicly traded and operates in the integrated petroleum and natural gas industry. The organization operates facilities around the world and explores for oil and natural gas in all six continents around the world. The organization leads the industry in every aspect of energy and petrochemicals. Further it has taken an active role in exploring for new sources of energy to help meet the increased demand for energy in the past few years. ExxonMobil is a leader in the research and development of new energy sources and technologies in response to the needs of the depleting resources, climate change, environment concerns and rising energy costs that have plagued the industry in the past few years. There are many different factors that have contributed to the success of the organization in the last century that it has been in operations. The first has been that the organization has been able to expand its operations throughout the other globe thus increasing its customer base and its markets. Further the organization has spent much on research and development throughout the years, which has helped the organization to be the leader in the industry for so many year and this expenditure in research and development will continue to help the organization to be a leader in the industry. Further the organization has grown through mergers and acquisitions and has been able to penetrate markets that were out of reach to it like the ones in the emerging markets of India and China. The diversification of the business operations into different areas of the energy supply, the increased investment in technology and again the investment in research and development to discover new methods of energy exploration, energy refinement and energy efficiency have contributed to a great extent to the success of the organization. While the organization is no doubt the leader in the industry and is known to be very strong in its makeup, its market potential and its ability to remain profitable in the future there are many different threats that are looming in the immediate future of the organization. The biggest threat that the organization is currently faced with is the decline in energy prices in the past few weeks to levels not seen over a year ago. While this boards well for the reduction of inflation in the economy, it does not board well for the organization and has reduced its projected profits for the coming year. Further it should be stated that the decline in the growth prospects of emerging economies like China and India has caused a reduction in the demand for energy that is indeed a serious threat for the long-term survival and profitability of the organization. Another threat for the organization is the increased concern for the environment and the depletion of natural resources that is making consumers more conscious of energy consumption and results in a reduction of energy consumption, thus reducing the profitability of the organization even further. Strengths

  • A long established name that has been in existence for over one hundred years. This gives the customers a sense of security when dealing with the organization.
  • The organization has diversified into many different areas of the energy industry and has many strong brands under its main umbrella group.
  • The organization in the past has been able to survive without much damage to its reputation even after the Exxon Valdez oil spill. This is partly due to a few reasons, the good corporate citizenship of the organization, the correct and appropriate crisis management and crisis communication management strategy.
  • The organization has been innovative in the past and continues to be very innovative currently too by spending a lot on research and development to come up with more efficient and effective ways to manage the energy resources and reduce the negative impact to the environment.
  • The organization has a global presence and thus has access to a wider customer base and a larger market than other energy companies.
  • The organization has a very strong presence in both India and China, the emerging markets that have been known to increase their energy demands exponentially thus the organization has been profiting from this at a higher rate than most other organizations.

Weaknesses

  • The organization has been accused of not doing enough to go green and conserve the environment, rather that it is polluting and destroying the environment.
  • There has been much negative publicity generated from the Exxon Valdez spill and also the human rights or rather the employee rights records of the organization has been under a cloud, which is a significant weakness of the organization.
  • Inappropriate handling of the environmental interest groups is a very big weakness of the organization and can be detrimental to it in the future.
  • Further the organization has been known for exorbitant profits in the last few years as energy prices were increasing, which gave it quite a lot of negative publicity that the organization did not handle very well and has cost it the good will of its consumers, who consider the organization to be becoming rich at the expense of the “poor consumer”.

Opportunities

  • The biggest opportunities that are available to the organization currently is the increased demand of energy by developing economies in the South Asian and South East Asian regions likes Malaysia, Indonesia, Korea and Vietnam.

Threats

  • The emerging economies of China and India that have been the biggest demanders of energy in the past few years are being hit by the recession in the developed economies and thus have reduced their rates of energy consumption that has caused the organization to loose out on projected levels of profit.
  • The increased attention to the conservation of the environment has resulted in the reduction of the use of energy and energy savings and in the future this will only increase thus reducing the profitability of the organization.
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