Wal-Mart Case Study
III. External Environment: Opportunities and Threats
A. Societal Environment 1. Wal-Mart’s general environmental forces, which greatly impact the task environment, include technological, socio-cultural, economic, political, and legal forces. These forces tend to be challenging to identify and are affecting both the corporation and the industries in which it competes. Because they are indirect forces, which for the most part are out of management’s control, they may present threats and expose weaknesses. Some examples of environmental forces, which may present threats to Wal-Mart, are economic, political and legal forces. Being the world’s largest retailer means you’re the target of competition, locally and globally. As a global retailer, Wal-Mart is exposed to political problems in the different countries it operates in, and also faces strict labor and employment laws. Intense price competition is also a threat. Due to outsourcing to low-cost countries, manufacturing costs have fallen as well as the cost of producing many consumer products.
On the other hand, opportunities may arise from forces such as increased technology, a diversified workforce, and a booming economy. Wal-Mart has diversified from large supercenters to local and mall-based sites, creating opportunities to exploit market development. Expanding consumer markets such as China and India have presented Wal-Mart with great opportunities to further globalize their operations.
Summary of External Forces
Economic: The recent financial crisis has had a negative impact on consumer spending. This disproportionate level of income and consumer spending in developing countries will impact Wal-Mart’s global economy. Currency has also had an effect on their income and will continue to be a threat. On the other hand, the fact that a lot of retail companies are struggling to maintain due to the drop in disposable incomes, and that inflation in US market diverts customers towards buying cheaper
A. Societal Environment 1. Wal-Mart’s general environmental forces, which greatly impact the task environment, include technological, socio-cultural, economic, political, and legal forces. These forces tend to be challenging to identify and are affecting both the corporation and the industries in which it competes. Because they are indirect forces, which for the most part are out of management’s control, they may present threats and expose weaknesses. Some examples of environmental forces, which may present threats to Wal-Mart, are economic, political and legal forces. Being the world’s largest retailer means you’re the target of competition, locally and globally. As a global retailer, Wal-Mart is exposed to political problems in the different countries it operates in, and also faces strict labor and employment laws. Intense price competition is also a threat. Due to outsourcing to low-cost countries, manufacturing costs have fallen as well as the cost of producing many consumer products.
On the other hand, opportunities may arise from forces such as increased technology, a diversified workforce, and a booming economy. Wal-Mart has diversified from large supercenters to local and mall-based sites, creating opportunities to exploit market development. Expanding consumer markets such as China and India have presented Wal-Mart with great opportunities to further globalize their operations.
Summary of External Forces
Economic: The recent financial crisis has had a negative impact on consumer spending. This disproportionate level of income and consumer spending in developing countries will impact Wal-Mart’s global economy. Currency has also had an effect on their income and will continue to be a threat. On the other hand, the fact that a lot of retail companies are struggling to maintain due to the drop in disposable incomes, and that inflation in US market diverts customers towards buying cheaper