Sample Essay on SWOT Analysis of Big Lots

SWOT Analysis of Big Lots

In order for you to effectively understand the SWOT analysis of Big Lots, it is important that you begin by knowing the company, what it deals in and also target market. Based in Columbus, Ohio, Big Lots is a U.S retail company with more than 1, 400 stores operating in 48 states. The retailing chain store deals in a wide range of products including furniture, toys, small electronics, packaged food and beverages, clothing among others. Apart from its stores, customers can also shop from Big Lots’ online store.

What is SWOT Analysis of Big Lots?

SWOT analysis of Big Lots refers to the scrutiny of four main factors affecting the sustainability and profitability of the business. The analysis looks into the strengths, weaknesses, opportunities and threats facing Big Lots in the market. It is always advisable that a company does a frequent SWOT analysis so it is able to create ways of fixing problems and preparing itself for success.

The following is a full SWOT analysis of Big Lots and recommendations on how the company can increase its revenue base.


Big Lots is a renowned close-out retailer in the United States, considered among the largest and this has ensured effective brand recognition and loyalty in the market.

The ability of the company to offer a wide range of branded products under one roof is one of the outstanding features that keeps customers coming back to shop from Big Lots.

Big Lots also has a greater pricing advantage impacted by the lower prices that it offers to customers. This is a unique advantage that has enabled it to attract and retain many customers.

The retailer also has effective and strong distribution network, which ensures products are delivered to customers without inconvenience. In this way, it has been able to earn the trust of many shoppers.

Big Lots’ relatively good financial health is also another element of strength. Unlike other retailers, the business has a lower debt level.


One of the weaknesses that has dragged and may possibly continue pulling Big Lots behind is its involvement in a lawsuit. The company was recently in labor court for alleged misclassification of workers and failure to pay overtime to its employees. Apart from the financial implications, lawsuits also diminish the credibility of a business.

Frequent product recalls by the retailer pisses off many customers who may never come back. In fact, it makes customers lose trust in the company, which can badly affect sales.

Bid Lots mainly sells overstocked products which implies there is always no guarantee that shoppers can find similar products again when in need. This can significantly hamper the image of the business.


The projected growth in online spending in the US and across the world is one of the opportunities that Big Lots should consider exploiting.

Developing markets in many world economies is also another avenue that the company can pursue for expansion.

Store layout improvements, which is undergoing examination by Big Lots will ensure new layouts for its stores. These are aimed at enhancing the shopping experience of customers at various Big Lots’ stores.


Increased minimum wages in the United States is an element that would impact high operational costs for the company. High labor costs slash profit margins, thus cutting revenues.

Big Lots mainly depends on foreign vendors and this puts it at a disadvantage in case of discrepancy in international trade laws. In the event of higher taxes, more restrictive quotas, inflated shipping costs among other harsh conditions, the business may suffer losses.

Increased competition is also another threat that company will have to deal with.

Recommendations on SWOT Analysis of Big Lots

The above SWOT analysis of Big Lots places the company on the same level with several retailing companies, which is not quite a good spot for success. The following are some of the areas that the business should focus on for much better results.

  • Restoring customer trust which is continuously lost through frequent product recalls and overstocked products.
  • Adherence to labor laws
  • Expansion

With enhanced online presence and the above recommendations, Big Lots could just be a step further from its competitors in the retail sector.


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