This website uses cookies to ensure you have the best experience. Learn more

Critical Analysis Of Internal Resources And External Environment Of Wal Mart

922 words - 4 pages

Critical Analysis of Internal Resources of Wal-Mart and External Environment.

External Environment
We have used Porter’s five forces on the discount retail industry to understand external environment(Porter, Michael E., Competitive Strategy(1988).
1. Threat of new entrants: Low

a. Highly price competitive nature of the discount retail industry with already established players vying for market shares forbids new entrants. High entry barriers due to huge capital investments and need for economics of scale.
b. Incumbents already have strong and trusted supplier network which couldn’t be replicated by new entrants
c. Wal-Mart by its scale of operations drive cost and price lower which can’t be replicated by new entrants
d. Wal-Mart possess a strong distribution and logistics network enabled by technology, a deep pocket which could invest in new generation process and a well-established brand name

2. Threat of substitutes: Low

a. Alternatives like Mom-and-Pop stores and Specialty stores fail to provide the consumer choices in terms of products and brands and competitive prices provided by retail chain
b. E-commerce/ Online industry is a maturing industry but fails to attract purchase of daily consumer durables due to higher prices and longer fulfillment times. Grocery stores fail to offer a viable substitution due to high prices.

3. Competitive rivalry in Industry: High

a. Mature industry with few existing players with oligopolistic industry structure.
b. Industry is price competitive with firms focusing on improving internal operations to cut costs and hence price.

4. Bargaining power of suppliers- Low

a. Wal-Mart’s large scale of operations with strong network of stores around the world provides them global sourcing capability with a wide range of vendors/suppliers. This leaves no bargaining ground for the suppliers.
b. With strong supply chain network with over 4k trucks enables Wal-Mart to run independent logistics network
c. Private labels introduced by Wal-Mart also drive bargaining power of suppliers low.

5. Bargaining power of Buyers- Moderate to High

a. Price-sensitive buyers coupled with low or nil switching cost provides high bargaining power of the buyers.
b. Brand differentiation and product differentiation in the consumer durable industry is les leading to convenient shopping.
Internal Resources
Below is an analysis based on resourced based view model (RBV) which will help to determine the sustainability of core competencies(Peteraf, M. A. (1993))
Competency Valuable Rare Inimitable Non-Substitutable Conclusion
Deep Focus of technology in supply chain practices Yes No No Yes Competitive parity
Ability to pull demand to generate large sales volume Yes Yes No Yes Temp. competitive advantage
State of the art logistics and return logistics system Yes Yes No Yes Temporary competitive advantage
Decentralized Operation Yes Yes Yes No Temporary competitive advantage
Shared Beliefs, Culture and Values Yes Yes Yes Yes Sustainable...

Find Another Essay On Critical Analysis of Internal Resources and External Environment of Wal-Mart

Internal and External Analysis of Tesla

526 words - 2 pages Internal AnalysisTesla motors is able to differentiate itself from its rivals by offering a product that has yet to be matched. No other automotive company has been able to produce a car that is all electric and can travel 250 miles on a single charge. In addition, no other company has a network of charge stations allowing Tesla owners to drive across the country if desired. Finally, Tesla motors has created a brand of elite cars, it has been


5340 words - 21 pages . It's indicating that Wal-Mart is using its financial resources efficiently by maintaining low inventories.Days' inventoryThe inventory turnover ratio also can be expressed as the number of days goods are kept in inventory. The days' inventory is computed by dividing a company's ending inventory by its cost of sales, and multiplying this result by the number of 365 days. From exhibit 1-2, we can find the days' inventory of Sears is increasing

Company of Wal-Mart

1406 words - 6 pages , there seems to be a challenge in some of the market, India being a current example. The recent years have also seen Wal-Mart exit from the Canadian, German and South Korean markets. Below is a Competitive Profile Matrix for Wal-Mart against two of its main competitors, Kohl, and Target. Wal-Mart Target K-Mart Critical Success Factors Weight

Strategic Management. Internal and External Analysis of an airline organisation

2876 words - 12 pages 1. Internal Analysis•Current resources, resource capabilities and/or resources potential to provide sustainable competitive advantage for the company.•Distinctive competencies and deficiencies and core competencies.•Key areas of competitive advantageThe VRIO analysis from the appendix suggests Air NZ (Air New Zealand) have only one resource that will provide them with sustainable competitive advantage and is a distinctive

History of Beyond Petroleum and Wal-Mart

1183 words - 5 pages past mistakes by developing new business strategies (Rainey, 2006, p 347). Secondly, BP has to ensure that it has an enabling environment and innovative and qualified employees who can predict future trends with past information about the company, and use that information to create a better future, for the company. An enabling environment entails an environment that has sufficient resources and can allow for expansion of innovation and new

Analysis Of The External Environment Of Business

1591 words - 6 pages Analysis of the External Environment of Business The Technological Environment The external business environment consists of four elements, they are as follows: Political, Economic, Social and technological. It would be impossible to analyse the whole environment in one essay, I have therefore decided to focus my essay on the technological environment. I have chosen this area to focus on because as Palmer and Hartley point out, it is one

Analysis of the External Environment of Business

1663 words - 7 pages Analysis of the External Environment of Business A ‘business' is commonly defined as an organisation which provides goods or services in addition to transforming input into output. Its objectives can either be profitable or non-profitable. One of the main requirements that must be fulfilled for a business to exist is that it must act and react to activities and occurrences beyond that of the organisation. These factors that happen outside of

Strategic Audit of Wal-Mart

2685 words - 11 pages convenient locations, Wal-Mart has become an American icon and institution. Wal-Mart has essentially conquered the small-town, Midwest, farm communities of America and strives on continued public and customer service, and positive contribution back to the communities in which it resides.Financial comments and analysis - -In millions of U.S. DollarsBased on 12 months as ending 1/31/2004Revenue 256,320Other Revenue 2,352Total Revenue 258,681Cost of

Historical Bckground of Wal-Mart

2127 words - 9 pages low prices, wide selection of goods and “family friendly” environment. Upon entering any Wal-Mart in the United States, shoppers are usually greeted by a designated greeter whose sole function is to make the customer feel at home. Wal-Mart may look like it is the best manufactured seller in the USA; however, there are things that are not even made in the US; they are made outside of the country. Moreover, Wal-Mart is pro of things that are made

Control Mechanisms of Wal mart

1516 words - 6 pages resources made available t the Wal-Mart employee. Considering the successful positioning that Wal-Mart has been in for many years; one may choose to consider the idea that savings, on a small scale, isn't thought of in the eyes of everyone; yet, the savings is taken from the employee for the consumers benefit. Of the controls that Wal-Mart has chosen to make normal practice, each mechanism, market and clan control; have been made a main priority and

Globalization of the Wal-mart

1030 words - 4 pages Wal-mart is the biggest retailer of the world. They made every effort to achieve this success. In this essay I will focus on the Globalization of the Wal-mart and international organizations for trade which helped it grow.The first Wal-mart store was opened in 1962 by Sam Walton. Sam Walton always used only one business policy that is "Sell stuff that people need everyday just a little cheaper than everyone else, sell it at that low price all

Similar Essays

Euro Disney Analysis Of The External And Internal Environment

1386 words - 6 pages their environment analysis. In this case there has been a recognition of a trend, which is the trend of people going to theme parks during the weekends for entertainment of them as well as their children. Also here is an existing need for entertainment of this kind. Therefore, an opportunity exists in the European market that Euro Disney could have taken advantage of. However, their failure to pick up signals from the macro environment and

A Critical Analysis Of The Article "Progressive Wal Mart. Really." By Sebastian Mallaby

1216 words - 5 pages American shoppers consume annually. The pay that employees get is the price they must pay for low priced merchandise. Because of the minimal pay to employees, Wal-Mart strengthens its’ consumer buying power. Giving the American shoppers the savings they need, Wal-Mart’s has ultimately been them successful. Wal-Mart has potentially wiped out the middle class as an employer, but the employees can now work and get government financial and medical

Analysis Of Wal Mart

2707 words - 11 pages Analysis of Wal Mart Wal Mart is the largest retailer in Canada , Mexico and USA. In addition to that Wal Mart has been known in USA not only for its dimensions but also for a very big number of reasons and good values. I think the best way to start an analysis about Wal mart strategy is to see where the company is now with the use of a brief Swot analysis. As far as the Strengths are concerned , I think that one of

Swot Analysis Of Wal Mart

3324 words - 13 pages Outline I. Summary of Wal-Mart A. What is Wal-Mart B. Economic Factors of Wal-Mart C. Customer Relations D. Employees II> External Analysis A. External opportunities B. External Threats C. Competitors D. Foreign Markets III. Internal Analysis A. Internal Strengths B. Human Resource C. Quality products For as long as I can remember I have seen Wal-mart stores up in almost in every town that I have traveled through. The store started by Sam