Walmart

To express the external environment of Wal-Mart the following factors are summarized:

Demographic

Wal-Mart has the highest number of associates around the world. It has approximately 1,140,000 employees and they all maintain about 6,700 stores around the world. It is roughly estimated that many of the administration started their work hourly and it is hired locally for most of its foreign operations.

 Economic

There are worldwide fluctuations in the economy but it is Wal-Mart which stands out prominently and has shown the increase in its profit. The total revenue of Wal-Mart is about $345 billion in 2007 and has quadrupled its net income since past 10 years. Wal-Mart has spread their branches all over the world from rural to urban area. It has started from Arkansas and spread to the 50 states of United States and had also entered in the faraway places like South Korea, Canada, Hong Kong and China etc. That’s why it is one of the world’s largest companies which started themselves as a small company but then spread its branches all over the world. 

 Political/Legal

It is said that politics is also present within Wal-Mart. Several lawsuits have been filed to Wal-Mart that they do not give meals and rest breaks to their employees as the law states and also they discriminate among women in promotion, pay training and job assignments. These lawsuits provide a chance to the Wal-Mart’s opponents to impose more damage.

Technological

            Radio Frequency Identification plays an important role in the delivering the things in the industry. It helps to track the location, shelves packages or even shoplifting. It is easily usable as it is small in size and can carry useful information. It is considered that Wal-Mart is one of the companies who have used technology to maximize the functional effectiveness and used it in very early stages. It invested into technology when nobody knows about it. The company organizes its e-commerce as well.

 Socio Cultural

            The company was moving towards the low wages consumer segment. The stores of the Wal-Mart were designed in such a modest way that they reflect the tendency to sell things in cheap rates. It was also said that the company is regulating the market by letting minor town’s state popular culture. To sell the things in lower prices Wal-Mart has dealt with its suppliers very smartly.

 Global

            Wal-Mart has worked globally. It works on the philosophy that different stores must be available for different folks. Bilateral & Multilateral free trade contracts are continuing to shape the industry all around the world. Wal-Mart has opened its stores as globalization efforts to Mexico, Brazil, as well as Argentina. It then entered Europe with its stores in Germany and in the United Kingdom of Britain and covered Asia by opening its stores in China, Korea and Japan.

B- Industry Analysis

            The industrial atmosphere of the Wal-Mart Company can be simply described as;

Threat of New entrants

            Wal-Mart is now facing a major threat from other retailer’s store. Costco, Kroger, Target, Safeway, Best Buy are one of the companies which can have an effect on Wal-Mart so, Wal-Mart should keep a watchful eye on them to keep his position strong.

The Bargaining of Suppliers

            Walmart offers a lot of trade to manufacturers and wholesalers; by this, the company holds power because by Wal-Mart threatening to toggle to a different supplier it would create a fright approach to the suppliers. It has a very unique relationship with their suppliers; the suppliers at the end have only one choice either to design goods their way or Wal-Mart’s way.

The Bargaining power of Buyers

The individual buyer has very little or one can say no pressure at all on the Wal-Mart. Consumer supporter groups have criticized about Wal-Mart’s pricing systems. Consumer could shop at a competitor who proposes contrasting products at comparable prices, but the easiness is lost.

Threat of substitutes

            Costco is the biggest threat to Wal-Mart; although it’s the largest retailer but it could do better. Another challenge is of expanding in the domestic market.

The Intensity among rivalry

            The rivalry groups are trying their best to have the height of the ranking for which the Wal-Mart is standing for last few years. Costco and Target are the most powerful rivals in the market.

C- Competitor Analysis

            The Competitor environment of Wal-Mart is encouraging for them but some of the stores are gearing up their heels to have a tight competition with Wal-Mart. The biggest competitors of Wal-Mart are Costco and Target. All three are competing for the top position in merchandise market of U.S while Kroger and Family Dollar stores are also threatening its dominance. It is still at the top of the retailers market in South of U.S. JCPenney and Amazon.com are also its competitors globally.