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WalmartScanning the External EnvironmentBrenda Catr.docx
- 1. Walmart: Scanning the External Environment Brenda Catron, Ashley May, Darrelle Pan, Elizabeth Patz, Bobbi Ready, Diana Velez & Hridya Warrier STR/581 March 23, 2015 Dan McFadden * Most Vital External Environmental Factors: REMOTE| Affects that are beyond control or influence INDUSTRY Businesses providing a similar product or service EXTERNAL OPERATING ENVIRONMENTS The acquisition and use of business resources EXTERNAL ENVIRONMENTAL FACTORS
- 2. External Environmental Factors (Part 1 of 2 slides) Below are examples of current and most important external environmental factors faced by Walmart. REMOTE Examples are Ecological, Political, Social, Legal, Geographic, and Technological factors that affect decision making abilities that are beyond control or influence. Analysis of the remote business environment helps business strategists understand the nature and direction of the current conditions. Remote analysis spots potential issues and predicts trends. INDUSTRY The competitive environment, or the industry environment, describes the conditions of businesses providing a similar type of product or service. Industry analysis helps business managers know how to make their products or services different and better than competitors. EXTERNAL OPERATING ENVIRONMENTS The operating environment involves customers, creditors, investors, employees, the marketing environment, and how a business uses and acquires resources. The operational profile aids in learning which business strategies are working and which strategies may need to be changed or abandoned. * Most Vital External Environmental Factors: REMOTE|
- 3. International Expansion, Generate New Revenues, Online Sales INDUSTRY Costco Wholesale Corp., Target Corp. and Big Lots, Inc. EXTERNAL OPERATING ENVIRONMENTS Numerical goals lead to stretched ethical boundaries (Tracy Morgan Lawsuit & Bribery Scandal) EXTERNAL ENVIRONMENTAL FACTORS External Environmental Factors (Part 1 of 2 slides) Below are examples of current and most important external environmental factors faced by Walmart. REMOTE Despite efforts to grow offshore, attempts at international expansion have largely been flops. Efforts to expand into smaller stores have had mixed success, and are marginal at generating new revenues in urban efforts. Meanwhile, Walmart still has no coherent strategy for on-line sales expansion. INDUSTRY The industry environment for Walmart involve competitors like Costco Wholesale Corporation, Target Corporation and Big Lots Incorporated who are directly contributing to Walmart’s decline in customers and revenues; forcing Walmart management to operate mainly by numerical goals. EXTERNAL OPERATING ENVIRONMENTS The operating environment for Walmart involve ethical and legal boundaries being stretched in order to meet numerical goals. Tracey Morgan Lawsuit: Comedian (Tracy Morgan) was seriously injured, and his companion and fellow comedian James McNair was killed, when their chauffeured vehicle was
- 4. struck by a WalMart truck going too fast under the control of an overly tired driver. Bribery Scandal: In April 2012, Walmart pushed too hard to create success. Leadership was skirting with the law if not outright violating it. Problems would worsen, and sure enough, by November of 2012, the bribery probe extended to Walmart’s operations in Brazil, China and India. * WALMART’S BEST GROWTH POSSIBILITIES Rise in E-Commerce Revenues Stiff competition opens doors for numerous possibilities Positive Statistics Positive StatisticsSuccessful nationwide and has been one of the top retailers worldwide today“Employs approximately two million people and has a presence in 15 countries under 55 different names” (Statista, 2013).“A total of 4,625 stores in the United States, and 6,148 Walmart stores away from U.S. shores” (Statista, 2013). Rise in E-Commerce RevenuesWith a high saturation of stores
- 5. nationwide and globally, Walmart has tapped the profit options in online sales.“Wal-Mart believes that it can deliver 30% e- commerce revenue growth this year driven by the industry growth, its 0mni-channel initiatives, enhanced product variety over the Internet, and better delivery efficiency” (Forbes, 2014).Options like same day delivery, pick up in store the same day, and additional discounts in online purchases have enhanced the shopping experience for Walmart customers. Stiff Competition opens doors for numerous possibilitiesWalmart has not restricted itself to satisfy customers in terms of groceries and day to day purchases. Walmart wants its customers to find everything under one roof, including healthcare.“The retail giant announced a new partnership with DirectHealth.com, an online insurance comparison site and health insurance agency. People who have questions about insurance options now have a familiar physical location to go to have their questions answered, rather than waiting on hold to speak with someone via phone” (Advisory, 2014).“About 2,700 Walmart stores will feature counters staffed by DirectHealth.com agents, who will help consumers shop for Medicare health plans and navigate Obamacare’s health insurance exchanges” (Advisory, 2014). *
- 6. What is the difference between an Environmental Analysis and a Marketing Environment? http://smallbusiness.chron.com/difference-between- environmental-analysis-marketing-environment-21535.html Walmart Investors Worry Plenty About Tracy Morgan Lawsuit http://www.forbes.com/sites/adamhartung/2014/07/15/walmart- investors-worry-plenty-about-tracy-morgan-lawsuit/ Walmart Mexico Bribery Scandal http://www.forbes.com/sites/adamhartung/2012/04/26/walmarts- mexican-bribery-scandal-will-sink-it-like-the-icerberg-sank-the- titanic/Walmart's Wealth of Worldwide Outlets. June 2013. Statista. Retrieved from http://www.statista.com/chart/1230/walmarts-wealth-of- worldwide-outlets/ Wal-Mart Expects 30% Rise In E-Commerce Revenues This Year. June 2013. Forbes. Retrieved from http://www.forbes.com/sites/greatspeculations/2014/06/09/wal- mart-expects-30-rise-in-e-commerce-revenues-this-year/ RESOURCES RESOURCESWalmart's latest venture: 'We want to be the #1 health care provider in the industry.' October, 2014. Advisory. Retrieved from http://www.advisory.com/daily- briefing/blog/2014/10/walmarts-latest-venture
- 7. Wal-Mart SWOT – Internal StrengthsLarge Market ShareStrong Diverse Employee BaseWide Product BaseStrong Brand RecognitionWal-MartSam’s ClubNeighborhood Wal- MartFinancial LeveragePurchasing powerStakeholders Performing a SWOT analysis internal strengths can be defined as, “A resource advantage relative to competitors and the needs of the markets a firm serves or expects to serve” (Pearce). Wal-
- 8. mart internal strengths includes the following: being the world’s number one retailer, Strong and diverse workforce employing 2.2 million employees, large market share in Asia, Canada, Europe, Africa, Latin American and Mexico; in the United States operates 5,000 stores, and growing number of smaller format stores with strong financials net income 2014, $16,022 (mil), and sales of (mil.) $476,294.0 (Overview Financials, 2014). Financial Leverage: Mass purchasing, distribution, and financial resources enables Wal-mart the competitive advantage both nationally and internationally. “Wal-Mart has a faster growing international division (29% of sales) numbers more than 6,100 locations; Wal-Mart is the #1 retailer in Canada and Mexico and has operations in Asia (where it owns a 95% stake in Japanese retailer SEIYU), Africa, Europe, and Latin America” (Overview Financials, 2014). Strong investor relationships, Wal-Mart was named as number one on the Fortune 500, listing total sales 473.1 billion increasing sales 1.6%. Wal-mart is considered a strong investment with returns to investors listed as 17.5% (Fortune 500 2014, 2014). * Wal-mart SWOT – Internal Weakness SWOT Analysis * Introduction SWOT Three Four Five
- 9. etc Market Share Wide Span of Products Employee Base Financial LeverageThis is an example text. Go ahead and replace it with your own text. This is an example text. Go ahead and replace it with your own text. This is an example text. Go ahead and replace it with your own text. SWOT STRENGHTS WEAKNESSES THREATS OPPORTUNITIES *
- 10. References:Fortune 500 2014. (2014). Retrieved March 20, 2015, from Walmart Stores: http://fortune.com/fortune500/Overview Financials. (2014, January). Retrieved March 20, 2015, from Wal-Mart Stores, Inc.: http://cobrands.hoovers.com.contentproxy.phoenix.edu/company /WAL-MART_STORES_INC/rrjiff-1-1NJHW5.html(n.d.). Strategic Management: Planning for Domestic & Global Competition, 13th Edition. In Pearce. McGraw-Hill. * What is the difference between an Environmental Analysis and a Marketing Environment? http://smallbusiness.chron.com/difference-between- environmental-analysis-marketing-environment-21535.html Walmart Investors Worry Plenty About Tracy Morgan Lawsuit http://www.forbes.com/sites/adamhartung/2014/07/15/walmart- investors-worry-plenty-about-tracy-morgan-lawsuit/ Walmart Mexico Bribery Scandal http://www.forbes.com/sites/adamhartung/2012/04/26/walmarts- mexican-bribery-scandal-will-sink-it-like-the-icerberg-sank-the- titanic/ References