External Business Environment: A Case Study of Wal-Mart Stores Name Name of Professor Name of Institution External Business Environment: A Case Study of Wal-Mart Stores Introduction Organizations do not operate in isolation…
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The external environment affects the future core competencies of an organization. The external environment affects how an organization will customize its products in order to meet the changes in the environment. The external business environment is uncertain and an organization cannot control the forces within it. The external environment changes constantly and every organization has to adapt or change its strategies in order to adapt to the environment or be wiped out of the market. Company Overview-Wal-Mart Stores Core Competitive Advantage Wal-Mart Stores Inc. is the largest retailer in the world, having been in business for over twenty years. Wal-Mart’s strategic plan for competitive advantage is selling of goods that have already been branded. For this reason, the company has over four thousand retail facilities in the world. The competitive strategy for Wal-Mart is to sell brand name and high quality products at the lowest price possible. The company ensures that the products are sold at a lower price by reducing costs of warehousing and use of advanced technology to monitor operations. The company has achieved a competitive advantage by lowering its prices while offering high quality products. The company has accepted to operate with small margins, which combined with high quality products have ensured that the organization maintains and attracts more customers (Hayden et al, 2002). External business environment competitive advantage is arrived at by the firm’s ability to offer value added products to the customers. Wal-Mart has taken the strategy to offer high quality products to the customers at lower prices. The company adds value to the expenditure of the customers. For an organization to gain and maintain continuous competitive advantage strategy, the organization has to
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Strategic thinkers look not just at day-to-day activities, but also on the bigger picture of tomorrow because their role is to create the organization a practical dream. Thus, the only way to survive in this rapidly changing environment is to create an approach that is useful in the formulation and implementation of competitive strategies.
From the turn of the century until post-World War II, it was common practice for retailers to deny removal of merchandise from retailer shelves, instead providing in-house talent to assist customers directly at the store counter (Hesterly 2008). The expense of providing top quality, customised customer service was no longer worth the return on investment for human capital development and training as department stores began to emerge in the 1950s, representing an abundance of new competitive threats.
6 How sustainable is Wal-Mart’s competitive advantage in discount retailing in the USA 9 With reference to Dunning’s Eclectic Paradigm of foreign direct Investment (FDI), compare and contrast Wal-Mart’s entry into the German market in 1997 with its subsequent entry into the UK market in 1999.
The author states that Wal-Mart uses a perpetual inventory system wherein a good deal of technology is required. In this system, inventory quantities are updated continuously and subsidiary ledgers are updated after each transaction. Perpetual inventory provides a high degree of control, aids the management inventory levels.
269 – 272). Since the establishment of small retail store outlets in isolated areas made it easier on the part of Wal-Mart’s target consumers to purchase consumer products without having the need to travel to far-away places, Wal-Mart as a brand has created a positive image which made the company gain the loyalty of its existing consumers (Taub, 1986, p.
Wal-Mart U.S. is a one-stop shop. It has divided its business into six strategic merchandise units across its various store formats namely: grocery, entertainment, hardlines, apparel, health and wellness and home merchandise.
In the age on increased business competition, it has become very vital to ensure organizational efficiency. One such example can be found in the business strategies of Wal-Mart. Wal-Mart is the global retailer in the retail industry and has a niche for itself in the market. The history of this company can be traced to the year 1962.
Conclusions - Recommendations for increasing the effectiveness of the firm’s expansion plans 7 References 11 1. Introduction The standardization of organizational performance in highly developed markets is often difficult to be achieved. Firms that have already achieved a high level of performance need to continuously update their strategies in order to secure their market position in the long term.
Wal-Mart is an iconic American retail firm that has earned its reputation as the world’s largest retail store. It has shared much success and many deemed failures. The company is represented in all over the world but maintains a formidable presence in America where it has close to half of the world’s stores.