The Internal and External Environments of 2 Real-World Companies Using an Environmental Scan - Essay Example

Research and describe the internal and external environments of 2 real-world companies using an environmental scan Wal-Mart Internal environment at Wal-Mart is generally characterized by a strong influence of the Walton family which takes a lot of direct responsibility on the operation of the operations of the company. A highly centralized format of operation of the management system has ensured a highly efficient system of performance of various departments. The operations of the corporation are however facilitated by the fact that it is a public corporate body which has access to benefits of a public corporation such as finance. Wal-Mart has also been able to establish a rich corporate culture that has facilitated a certain way of dealing with the competitive environment that the corporation operates in (Kim and Yoffie, 2011). External factors to which the corporation is exposed are depicted by the existence of a very competitive culture with many retail outlets established nearly everywhere that it ventures. Since it operates on a global level, Wal-Mart has to cope with a highly diversified culture in every country that it sets up shop. To deal with the competitive nature of the market at the international platform has necessitated a marketing strategy that consists of a research and development to unlock the competitive advantage. A strong brand name at Wal-Mart has facilitated the entry of the retail chain store to set up shop easily in new markets. McDonalds McDonalds is a multinational facing a greater level of diversity than a majority of the corporate world players. The human resource is a very important internal strength at McDonalds since the top management officials are specially trained at the Hamburger University in a move that ensures strategic management on all fronts. Diversity is particularly well managed at McDonalds across the diverse global market presence created at every corner of the world. The fact that the largest number of minority workers is employed at the corporation reveals the embrace to diversity that exists at McDonalds than in many other industries. Externally, the corporation feels it more important to handle the health of the consumers and the entire market with more direct caution due to the sensitivity that that the food industry has. Due to the high competition of the food industry, McDonalds needs to deal with the market pressure for sustainable operations. Firstly, the high consumer behavior and preferences attachments to the food products that consumers search in the market force the corporation to realign its product preparation, package and appeal. Secondly, there is need to assure the consumers of their health and other concerns. Participating in community projects has facilitated a strong corporate social responsibility that augurs well with its strategic policies. Determine what competitive advantages each company has and what strategies each company is using. At Wal-Mart, there are several competitive advantages that have been formulated over the years to handle the huge competitive threat posed by the other big players such as Woolworth’s. The type of shops such as discount shops across the markets enabled the retail outlets to become one of the most competitive. Apart from the design of the outlets in terms of operations, Wal-Mart has always been at the fore front to facilitate low pricing strategy that attracts a significant number of consumers. It has been reported that Wal-Mart operated price discrimination within a certain radius to compete against the other market players in the region (Kim and Yoffie, 2011). Service delivery at Wal-Mart is also exceptional in facilitating customer retention and attraction of new ones. Strong internal control systems have been boosted at Wal-Mart by keeping in touch with innovative accounting controls that facilitate inventory management from the earliest times of operation. At McDonalds, competitive strategy has taken the form of a clear market segmentation and characterization that enables it to focus on the strongest young segment. By keeping a close eye on the fast foods development as occasioned by the consumer behavior findings, McDonalds has created a competitive advantage over other players such as Burger King. Provision of a well packaged young market’s products in an attractive way has facilitated the development of the outlets as a market winner. It is also a strong point at McDonalds that the brand name facilitates a market presence that cannot be matched by many (Dkszone.com, 2011)). The provision of free internet services at the outlets also makes McDonalds stand out from the rest of the competitors, which augurs well with the social networking young market. Combining the young market with a package for the adults enables McDonalds to be a food outlet of choice for the entire family. How does each company create value and sustain competitive advantage through business strategy? Sustenance of the competitive advantage at Wal-Mart has been approached with extra concentration on continued expansion to cover the entire retail market. Continued innovation with efficient store formats and merchandizing designs have facilitated Wal-Mart to offer different market segments a particular form of attention. McDonalds takes part in facilitating consumer satisfaction by closely following the market trends occasioned by consumer behavior. Innovation of the management systems at McDonalds has facilitated an efficient online marketing that is coupled to the free internet services at its outlets. What measurement guidelines is each company using to verify its strategic effectiveness? Wal-Mart has an efficient system of control of its operations across the world through a highly centralized management. There are constant appraisals in a system that is aimed at ensuring that the chain stores are as competitive as possible. The fact that Wal-Mart is a public corporation ensures that annual returns are complied with along the other internal control standards. At McDonalds, there is preference for efficient management that aims at facilitating an efficient control of the global business. The training obtained at the Hamburger University equips the administrators at McDonalds with the relevant skills to handle the attained competitive success and facilitate its sustenance. There is a regularly updated internal system review program at McDonalds to assist in the development of plans to facilitate sustainable competition and growth. How effective are the measurement guidelines that each company is using? The effectiveness of management used at Wal-Mart can be rated highly due to the success that has been achieved over the years of its existence. Performance measurement being applied at the corporation can be attached with a success tag observed with the achieved growth. McDonalds’ continued growth is an important yardstick of the effectiveness of the system used at the corporation. Continued innovation has facilitated the realignment of the internal systems at McDonalds to focus on set out targets (Angelfire.com, n.d). In line to this success, it can comfortably be said that measurement systems are efficient. References Angelfire.com (n.d) “MG 695 Wal-Mart Presentation: Environmental Scanning,” Retrieved from: http://www.angelfire.com/ultra/mg695/CapStoneWebPageEnvironmentalScanning.htm Bradley, S. P. & Ghemawat, P. (2002) “Wal-Mart Stores Inc.” Harvard Business School Review, 6 November 2002 Dkszone.com (2011) “McDonald’s Internal and External Environment,” Retrieved from: http://markpappalardo.com/blog/?p=5 Kim, R. & Yoffie, D. B. (2011) “Wal-Mart Update 2011” Harvard Business School Review, 15 June 2011 Read More