Wal-Mart's Weaknesses

Walmart's Case Study
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It is easy to become enamored with a company when it has enjoyed success over the years. What are Wal-Mart's weaknesses?
Over the last decade, Walmart has become a housed brand and gained recognition as a powerhouse worldwide. However, despite the company's continued success, the company is vulnerable to numerous challenges, just like any other company. Walmart is the world's largest retailer. It boasts an extensive network of storefronts with a reputation for massive retail prices such as the common "everyday low prices." One of the most common challenges Walmart is facing is the relatively low-profit margins. For a company that boasts a significant percent of the market share, the company accrues low returns on investment. The massive retail presence in all Walmart stores worldwide, even when the cost of production is low, contributes to low-profit margins(Hansen,2004). Offering quality products at a low price translates to relatively low profits for each item sold compared to other retailers in the market. Walmart capitalizes on the high-level purchase of machinery to accrue high sales and profits, which boosts the company's position in the market.
Second, Walmart sales can easily be driven out of business by other competitors. This is because the business sells uniform products that are relatively available in the market. Although the company trades at a low price to a broad segment of customers, its effects can easily be imitated by other brands, large stores, and franchises specializing in one product in their catalog, thus recapturing the entire market with better outcomes. Despite its tremendous efforts in launching the "big box store," competitors are deriving ways to outperform them (Hansen, 2004).
Another weakness ailing Walmart is the string of lawsuits facing the company. Every year, Walmart is involved in legal wars with environmental groups, organized labor, and charges ranging from discrimination, environmental pollution, etc. These lawsuits cost the company a large lump sum of money ...