External and Internal Environmental Analysis of Wal-Mart Inc.

External and Internal Environmental Analysis of Wal-Mart Inc.
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External and Internal Environmental Analysis of Wal-Mart Inc.
It is vital for any organization to carry out environmental analysis for purposes of achieving and maintaining competitive advantage. This process involves monitoring of environmental factors and detecting strengths, weaknesses, opportunities and threats to enhance development and implementation of present and future plans. (Zikmund &  Babin, 2012). According to Deresky (2008), environment scanning by an organization is a process of engaging in vigilant monitoring and evaluation of an organization’s internal and external environments for the sake of detecting signs of threats and or opportunities that influence planning of an organization’s operations.
This paper places focus on the importance of environmental analysis for Wal-Mart Inc., a considerably successful multinational organization in the retail business sector based in the united states. It also looks at the company’s competitive advantage in relation to its environment and organizational structure. Wal-Mart Stores inc. is a leading retail distributor company in the United States with stores spread all over the world. The company was founded in 1962 by Sam Walton by the establishment of a single store and has grown to have over 8,500 outlets in 15 countries and a workforce of over two million employees (Walmart.com, 2014).
The remote environment consists of factors that an organization has little or no control over them; they include economic, technological, social and political factors among others (Hitt, Ireland, & Hoskisson, 2014). The factor in Wal-Mart’s business remote environment with the most weight is the national Economy. This is for the most part associated with inflation rates, interest rates, unemployment rates and overall economic growth. In addition, outsourcing has become another important factor of the external environment that bears great influence on the performance of the Wal-Mart Company. Since the company mostly relies on skilled employment, the rtes of unemployment also pose, as am major factor to consider (Pearce & Robinson, 2012).
Economic factors affecting the business of Wal-Mart include but are not limited to customer preference, competition, and cost of labor and goods and disposable income. It also goes without saying that outsourcing as a factor of the external environment has become a basis of general trends adopted by businesses in the developed world for purposes of cutting down their labor costs. Many players in the market see this as an economically convenient way of avoiding having workers who fail to live up to the organization’s prospect considering inputs and resources required to hire and train them. As a result, it has become increasingly important for companies to engage in environmental scanning to ...