Internal and External Business Environment: Case Study of Walmart Inc.

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Internal and External Business Environment: Case Study of Walmart Inc.
Introduction
Walmart Inc has been a dominant company in the retail industry for decades controlling many retail stores, hypermarkets, and discount stores. Having started in the US, today it is a dominant brand available in 28 countries and over 2.3 million employees CITATION Wal16 \l 1033 (Wal-Mart Inc, n.d.). Being one of the top Fortune 500, it has had a lot of influence in the retail industry and revolutionized business operations. Walmart Inc is a publicly traded company with the majority shareholder as Walton’s family who controls the bigger stake of the share capital of the company. A thorough SWOT analysis is undertaken to evaluate the company’s business sustainability in the short and long run. In this research paper, the major internal and external factors affecting business operations for Walmart Inc are discussed in detail whilst offering possible solutions to some of the challenges facing the company.
Segments on General Environment
Technology
Hitherto, Walmart Inc has been operating under heavy external influence especially in the US. Technologically, Walmart Inc has had to evolve its organizational culture and nature of operations to meet market demands and ensure customer satisfaction. There are several dominant companies in the market today and having cutting edge technology gives the company an edge in ensuring they remain competitive. The company has also invested in heavy online presence that has made them dominant in the e-commerce industry and enabled them to compete favorably with other companies like the Amazon. Walmart acquired Jet.com recently to boost their online presence and target online shoppers CITATION Sar16 \l 1033 (Nassauer, 2016). Their technological investment has greatly improved their efficacy and service delivery which has translated to higher profits and ensured the company becomes a pace setter in the retail industry rather than doing catch up.
Communication channels powered by technology have enhanced their global dominance and easier management. Information flow vertically and horizontally within the organization due to good communication infrastructure has enabled them to run their business smoothly. To manage over 2 million employees and over 11500 stores requires a robust network for communication and to facilitate their business operations. Technology has also been incorporated into their transport and supply chain to ensure efficiency. Retail stores require an effective supply of goods and hence having an effective supply system connected to an inventory system have given them an edge in the retail industry.
Socio-cultural
Walmart has invested heavily in sociocultural activities which have had a great impact on their business operations. Corporate social responsibility is part of sociocultural engagements which businesses have taken up to bring change to their industry and the world. Walmart Inc has had many CSR projects often running into billions over the years, and they have been key in creating a collaborative environment between the company assets and investments with the local communitiesCITATION Ben152 \l 1033 (Bentonville, Walmart Highlights Progress in 2015 Global Responsibility Report, 2015). As an international brand, Walmart Inc organizational culture has been tweaked to mirror the local culture where their stores’ location. Walmart Inc spends its revenue in projects that would foresee the retail giant produce zero waste. They have also invested heavily in selling products that ensure environmental sustainability and production of green energy.
The company also has a diverse workforce across their investments. The workforce shows the company’s commitment to ensuring inclusive and divergent cultures within the organizations. Walmart Inc has also led in including women in the workplace and the marginalized groups to show gender equity and social fairness. It is a move that has promoted the company’s positive publicity which has translated to more profits and international recognition.
Walmart Inc’s Two of the Five Forces of Competition Analysis
According to Porter’s Five Forces analysis, businesses have to evolve so that they can ensure long-term viability in the market. Walmart Inc still has to keep on being creative to maintain that company’s majesty authority in the market. Thus can be still be achieved by implementation of internal automation process in its chain supply or by improvement of human resource development. In this context, two of the major forces of competition factors which weigh in heavily on Walmart Inc are elucidated.
Issuing of a strong threat to the new entrants in the market.
Barricading new entrants legally is a sure way of achieving mini monopolistic dominance in the market and avoid unnecessary competition. Walmart Inc companies have continuously offered low pricing for their goods thus choking new entrants out of the market. The prices appeal to low and middle-income earners who are the majority consumers and enable the company to ward off new entrants targeting that group. Walmart Inc has also implemented other measures such as being strategically located to enhance easier access for their consumers.
Intensify their strong competitive rivalry in the market
Walmart Inc has put in place strategic measures to the market so as to issue a threat to their competitors. The company has invested heavily in aggressive advertisement and promotion of their brand and products. New consumers in the market tend to have a desire to have a test on this product that is aggressively advertised. Walmart Inc must maintain their aggression nature of making their brands appear more superior compared to other substitutes in the market. Walmart Inc has also maintained its growth and venturing into new markets to ensure they remain relevant and competitive in the retail industry. The business world is very dynamic; Walmart Inc should evolve to ensure they remain competitive in the industry.
External threats that affect Walmart Inc Corporation
External threats are undesirable factors that influence a business organization, and the business does not have any power to control the situation. Walmart Inc Corporation is affected by various such factors that that have affected their business operations. Some of such factors are highlighted below with sufficient proof they have affected Walmart’s Inc. business operations.
Political factors
Walmart Inc Corporation is strongly influenced by political environment across the globe. In each of the country it has ventured, the political landscape influences their mode of operation. In some parts of the world, political instability is common and thus strongly affects businesses negatively. During political instabilities in the world, foreign investors negatively affected. Walmart premises might be destroyed or looted leading to heavy losses. Some countries impose tariffs and bans towards certain products over political ideologies. Such measures discourage investors whose products have been banned in those countries. Some governments impose high taxes on foreign companies hence dwindling their profits. Prices of goods soar compared to those locally produced hence facing stiff competition. Sales margins of foreign investors like Walmart Inc. ins such countries go down and in some cases force the companies to close their operations in such countries. Walmart Inc Corporation products have been facing such political challenges in different parts of the world.
Physical environment
Though Walmart Inc has been committed to ensuring sustainability, the corporation has faced environmentally related charges CITATION Har13 \l 1033 (Harrington, 2013). Though the organization is committed to ensuring environmental sustainability and conservation, they have fallen short in some cases and faced charges. Healthy and sustainable physical environment is crucial in ensuring the business operations and local society do not clash over natural resources. The Corporation is investing $7 billion into the production of renewable energy by 2020 CITATION Ben15 \l 1033 (Bentonville, 2015). Corporate Social Responsibility department in Walmart Inc has invested heavily in ensuri...