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Mart is an American multinational retail and discount store chain having more than 1,100 stores across all the states of the country. Established in 2009, Max-Mart is one of the fastest growing retailers in the United States after Wal-Mart, Target Corporation, and K-Mart. In addition to the home country, Max-Mart also operates a number of independent retail and discount stores in Australia, United Kingdom, Japan, Thailand, and New Zealand. Other international locations of the company include Canada, Europe, and Mexico. Max-Mart is headquartered in Hoffman Estates, Illinois, United States. It has done a number of acquisitions and mergers during the last couple of decades. Max-Mart serves more than 3 million customers every day.
Max-Mart offers a wide array of consumer products and grocery items; including beauty and health care products, food items, toys, clothing, shoes, home and electronic appliances, bedding and furniture, books, medicines, magazines, jewelry, movies, music, games, sports and fitness equipments, pets, computer hardware and software, mobile phones, and all types of electronic and computer accessories and equipments. Max-Mart is known for its extensive product lines and excellent customer services at both physical and online stores. It has maintained an efficient order-booking, payment, returning policy, and customer services and queries management system which make it one of the most favorite and reliable brands in the retail industry.
SWOT Analysis for Max-Mart
SWOT Analysis consists of both internal and external environmental analysis (Hitt, Ireland, & Hoskisson, 2011). The internal environment is analyzed by looking at the company's strengths and weaknesses whereas external environment is assessed through potential threats and opportunities from the industry in which the company operates (Hill & Jones, 2012). A comprehensive SWOT Analysis for Max-Mart is explained in the following table:
A. Internal Environment
The biggest strength of Max-Mart is its worldwide recognition. It has a strong brand image in the local and international market. This strong brand image largely contributes in enhancing the emotional and rational attachment of the target consumers towards this retail giant.
Variety of Products:
Max-Mart offers a large variety of consumer and grocery products at attractively discounted prices. Therefore, a large number of consumers prefer it over many other local and international brands.
Large Consumer Base:
The consumer base of Max-Mart is 3 million customers every day which is a proof that this retail giant has expanded its network to a large number of domestic and international locations.
Moreover, Max-Mart provides superior customer services to its customers at both physical and online retail stores which largely contribute in strengthening the brand loyalty of its customers.
Supply Chain and Distribution:
An efficient supply chain and extensive distribution network enables it to serve its customers in all potential locations.
Financial and Operational Strength:
Due to its sound financial and operational position, Max-Mart does not face any difficulty in expanding its retail chain network or making relationships with financially stable suppliers and distributors.
A major weakness of Max-Mart is its ownership status of retails stores. Not all the retail and discount stores are fully owned by the company. Therefore, the Company's Management does not have full control and decision making authority in strategic steps.
Acceptability of Products:
Not all the products offered by Max-Mart have an equal level of acceptability among general customers. The Company offers branded products at discounted prices and grocery items at very affordable prices; but still it does not enjoy attractive sales revenues from all its product lines.
Expensive Product Lines:
Some branded products which cannot be sold on discounted prices have very low sales growth at Max-Mart. Consumers prefer to purchase these products directly from the manufacturers.
The employee turnover and rate of absenteeism at Max-Mart in the home country is comparatively higher than that of its competitors. The major reason for this internal weakness is less competitive salary and compensation packages offered by Max-Mart to its lower level employees.
B. External Environment
Despite having various weaknesses and drawbacks in its operational setup, Max-Mart can still find and avail attractive opportunities from the market. For example, a strategic option is to open fully-owned retail stores. These stores will give it full control and decision making authority, while at the same time; strengthen its position as compared to its industry rivals.
Increasing Demand for low-sales Products:
Max-Mart can increase the demand for its low-sales products by running effective marketing and promotional campaigns. These products can initially be offered at discounted prices in order to attract the potential customers; and afterwards, they can be placed in competition with other competitor brands.
Max-Mart can enter into new geographical markets where it does not have established its presence yet. The most potential locations could be the areas where its competitors' businesses are in their growing stages (Lamb, Hair, & McDaniel, 2012).
In addition to expanding its operations horizontally (in potential geographical locations), Max-Mart can also become its own supplier and distributor through vertical integration strategy. This integration will help it in controlling the heavy supply chain, distribution, and business promotional costs up to a large extent (Saxena, 2009).
The biggest threat for Max-Mart is the retail and discount stores operating at a large scale in the home and international markets. The top industry rivals for Max-Mart include Wal-Mart, K-Mart, Sears, Target Corporation, Budgens Stores (in United Kingdom), and other retail corporations, supermarkets, hypermarkets. These competitors are giving a stiff competition to Max-Mart in all areas of its business affairs.
Secondly, economic downturn and uncertainties in different markets of the world directly impacts its sales and financial position. Severe economic conditions badly hamper its business operations and force it to adopt stability and retrenchment strategies in order to survive in the industry.
Changing Consumer Preferences:
The changing demands and preferences of consumers are also a big threat for Max-Mart. Now consumers make their purchase decision on the basis of a number of factors; like quality, price, and convenience of purchasing, easy payment methods, customer services, and attractiveness of discount offers by retail corporations. Therefore, Max-Mart has to keep itself abreast of these changes and mold its business level strategies accordingly.
Learning from the SWOT Analysis
SWOT Analysis is primarily carried out to analyze the current market position and capabilities of a company. It is a structure planning method by which the internal and external environment of a company is assessed with a view to oversee what are the core strengths of that company which can be capitalized to grow in the market in the most competitive and profitable way (Hitt, Ireland, & Hoskisson, 2011). By conducting this analysis, it is learnt that all companies have a SWOT which highlights the areas where the company is strong and the drawbacks which it must overcome in order to avoid unwanted circumstances (Saxena, 2009).
The SWOT Analysis also gives an overview of the opportunities which are present in the market and can be availed by the company with its current capabilities, competencies, and resources. At the same time, it gives an assessment of the potential threats which can be harmful for the company's operational and financial performance in the short or long run (Hill & Jones, 2012).
Based on the SWOT Analysis of Max-Mart, it is learnt that a company can only grow in its industry if it gives an equal focus on its internal and external environment. The strengths of the company help it prosper in its industry using growth strategies in both horizontal and vertical directions while weaknesses alarm it to strengthen itself if it wishes to stay competitive and profitable in relation to its competitors (Saxena, 2009). From the external analysis, it is learnt that there are various threats in every type of industry which can create…[continue]
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