Environmental Analysis Coursework Paper: The Walmart Marketing (Coursework Sample)

Environmental Analysis
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Introduction
Like all companies, Wal-mart’s operations and success is determined by the environment in which it operates. In this case, the environment falls into two major categories namely the internal environment and the external environment. The external environment comprises of those factors that affect the organization from outside the firm and are not within the control of the firm. This may include existing threats and opportunities as well as political, economic, social, technological, legal and environmental factors. On the other hand, the internal environmental factors comprises of those factors that influence the organization’s operations and success from within the firm. These are the factors that are within the control of the organization. They may include the organization’s strengths and weaknesses.
* The External Environment
* Opportunities
Leob (2016) opines that Wal-mart has the opportunity to expand into the developing countries. By expanding into these markets, the company will be able to increase its globalization level, attracting more customers to its fold. This will also enable the organization to stay ahead of the competition. Additionally, the company has the opportunity to improve on the quality of the services and products supplied in its stores. This is because Wal-Mart is a low cost retail chain and customers may often wonder if the safety and quality of the products therein is well taken care of. An improvement in the quality and safety of the products supplied in this retail chain will give customers the peace of mind they require to purchase comfortably and in large quantities from the retail chain. The company also has the opportunity to expand into more countries. This will enable it to gain more customers and have a diversified taskforce in its portfolio (Ampofo, 2016).
* Threats
Further, Wal-Mart is constantly faced with the threat of aggressive competition from other major retail brands such as Costco. These retail brands are continuously applying aggressive marketing measures to snatch away customers from Wal-Mart. Wal-mart can beat this by carrying out aggressive campaigns as well to attracting new customers and retaining the old ones. Additionally, Wal-mart’s operations and success is under threat from the healthy lifestyle trend sweeping the nations. People are becoming more cautious of what they eat (Halzack, 2016). They are careful to indulge in products that advance their general wellbeing. This is a threat to the company as it currently does not stock organic, healthy products. This may hive off some of the company’s customers. The company can address this by ensuring that products sold in the retail chain are healthy, organic or natural. This will help to retain the customers (Ampofo, 2016).
* Political & Legal Environment
By operating in many countries around the world, Wal-Mart is directly affected by the on goings in those countries. If there is peace and stability in a particular country, then business will thrive and Wal-Mart will continue to serve customers and make a profit. On the other hand, political instability would cause the company to close shop at least for some time. This will cause it to lose out on important revenue sources that would otherwise help the company to grow. The legislations within a country in which Wal-Mart operates also impact its operations significantly. The company must obey the laws of that country so that it can operate efficiently. Some of these regulations may be injurious to the business and some may be a boost to the retail chain. Directly, they impact on the profitability of the company in that country (Ampofo, 2016).
* Economic Environment
The economic environment of the country in which Wal-Mart operates also has significant impact on its operations. With a healthy economy, the firm is likely to do good business because citizens are in a position to buy from it. However, in terms of economic slowdowns, the business profit margins also decrease as well because customers do not have a lot of disposable income to spend in Wal-Mart stores. The existing currency exchange rates and inflation rates also affect the profits made by Wal-Mart. It also helps the firm to establish the prices to be set for various goods within the stores in a particular country or region (Hassan, Sistani, & Raju, 2014).
* Social Environment
The cultural values, attitudes and beliefs of the communities in which Wal-Mart has opened its stores also significantly affect the way the company conducts its business. For instance, if Wal-Mart has opened a store in a location frequented by Muslims, the company will not open a pork section in that store. Doing so would be in conflict with the beliefs of the community and it would even lead to a boycott of the company’s products (Ampofo, 2016).
* Technological Environment
Wal-Mart relies heavily on technology for product monitoring, chain distribution and procurement. As such, changes in technology often cause the business to change the way it operates. For example, with when a new version of the software used by the company to conduct business is released, the firm has to upgrade to that software to gain maximum benefit. The previous version of that software will have been redundant. Other inventions in technology such as the upsurge of e-commerce also impact the operations of the business. With e-commerce, the firm can reach a wider variety of clients (Ampofo, 2016).
* Environment
The world today is becoming more concerned about the impact of businesses on the physical environment. As such, Wal-Mart has had to implement strategies to ensure that they conduct clean environmentally friendly business. This has seen the company launch clean up exercises in various locations of its operations to help keep the environment clean. The organization is also currently in the process of implementing the use of biodegradable packing to ensure that the environment is not more polluted that it already is. The firm is also continuously seeking to support brands that operate in an environmentally friendly manner. It has therefore pledged its support for initiatives such as advocacy for the use of sustainable palm oil around the world (Ampofo, 2016).
* The Internal Environment
* Strengths
Wal-Mart has the unique position of being the largest retailer in the world. This gives it massive economies of scale, above and beyond those of its competitors. It is therefore in a better position to distribute its fixed costs over a large number of products and stores, thus maintaining its low costs. Secondly, the large size of the organization enables it to take on much risk without jeopardizing the company’s financial well-being. With greater risk come greater returns. The organization also has market power over its suppliers and competitors due to its large size. As such, it is in a better position to negotiate for fairer prices on the products they are supplied with. The large size of the retail chain also gives it the unique capability of implementing best practices in all locations especially with efficient use of resources (Leob, 2016).
Additionally, Wal-Mart has an international presence. It operates in more 28 countries with over 11,526 locations over the world. The company operates under different names in the various countries. For example, it operates as ASDA in the United Kingdom, Walmax in Mexico and Seiyu in Japan. The company is therefore able to reach many customers all over the world. This is quite important because in the event of a decline in the domestic market of the US, the company has other locations to fall back on. The firm’s international presence also enables it to further grow in size and gain meaningful valuable experiences necessary or helping the company to maintain its stature and even push more boundaries (Hassan, Sistani, & Raju, 2014).
The company has good IT infrastructure that enables company leaders to monitor product trends within a given country and a given store. The strong IT infrastructure enables the company to strategize on the best ways to enable the firm to continue going forward depending on the sales trends and consumers’ behaviors. The efficient IT infrastructure also enables the company to speedily procure the goods needed to stock the retail stores. The distribution chain of Wal-Mart is therefore easily controlled and monitored with the click of a mouse. The good IT infrastructure also enables the firm to provide speedy and quality service to the customers. Errors are reduced greatly and in the long run, this has helped to improve the company’s customer service (Plambeck & Denend, 2008).
The company has also put in strategies to improve on its people resource. It continues to invest time and money to help employees better their performance through measures such as workshops and in-house training. Additionally, the staff members are well remunerated and this acts as a motivational factor for them. Sat...