Impact of Macro Environment on Walmart: A Business Strategy Analysis

This report analyzes the impact of macro environment on Walmart's business strategy and performance. It includes an analysis of political, economic, social, technological, legal, and environmental factors. The report also evaluates the competitive forces in the market and applies various market theories, concepts, and models.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................4
P1) Analyse the impact and influence of the macro environment..............................................4
P2) Analyse the internal environment and capabilities of the given organisation......................6
P3) Evaluate the competitive forces of the market sectors.........................................................7
PART B............................................................................................................................................9
P4) Applying the range of the market theories concepts and models.........................................9
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12

INTRODUCTION
Walmart is the American multinational retail company which is having the chain of the
departmental stores and the grocery stores. The company was founded in the 1945 and was
founded by the SAM Walton. At present the company is providing the service across the 11438
stores all over the world. Company is providing the products like the electronics, home and
furniture and jewellery as well. It is providing the every essential things which are needed by the
customers. Company is also engaged in providing the charity in the charity programs. The report
consist of the impact of the macro environment on the company. It also includes the impact and
influence of the micro environment on the decision of the company. Report consist of the porters
five model which include the competitive forces of the market. Strategic plan and the theories are
included in the report.
PART A
P1) Analyse the impact and influence of the macro environment
Macro environment is having the impact on the company performance. The impact of the
macro environment would be seen by the pestle analysis. The pestle analysis is including the
factors which are affecting the company performance.
Political factors
Walmart is the company which is dealing in the retail industry and various political
factors are affecting the company performance. These are various threats and the opportunities in
the political factors which are affecting the company. Political stability is important for the
company because the suppliers and manufacturers are affected by the political condition of the
country. The company wants to expand the stores and the e-commerce network for that the
company wants to deal with the supplier and manufacturers as well. The second factors which is
affecting the company performance is the Chinese market (Banerjee 2015). Chinese market is
increasing the opportunities and the threats. Political factors include the political pressure of the
paying the high wages to the employees which are working in the company. The company is
suffering because if the employees are not working in the effective condition they would levy the
heavy penalties on the company.
Economic factors
The main factor which is affecting the company is pricing strategy of the company. Low
prices of the products is increasing the competition for the market. So trough the low prices of

the products the company is not able to fight the competition in the market. Company is having
the low profits margins and the sometimes even face the losses. Consumers demand is having the
impact on the performance of the company. It is directly affecting the sales and the inventory
turnover of the company. Higher interest rate is another economic factors which is affecting the
company. Consumer buying behaviour of the employees is affecting the profits margins of the
company (Brea-Solís.and Grifell-Tatjé, 2019). Due to the increase in the medical bills and
unemployment the consumer buying in power is reduced.
Social factors
The social factors which are affecting the company performance is the consumer life
style and the culture of the country. The company has entered the global market the company
would have to make the products according to the customers demand. The customers in every
country demand according to their culture and the taste. Walmart company has failed in
Germany because the company was not focusing on the cultural issues in the Germany. The
company is providing the products according to the American culture which is totally different
form the other culture. Customers of the country are health conscious and slowly they are trying
to focus on the health problems are trying to eat the healthy food. The company has the great
opportunity to make the healthy food products and focus on the customers demand.
Technological factors
Technology is not only affecting the company performance but it is affecting the people
as well. Walmart is currently using the robot and the automated units of the maintenance and
fulfilling the orders at the other locations. The new technology is helping the company to
improve the performance and also cost of the product is reduced. Manpower is reduced in the
production department. Company is also selling the products online and for these the company
has started selling the products through the online websites. Walmart is also increasing the
business due to the use of the mobiles application and the laptops. Company is in touch with the
customers by the 24/. Technological factors are the increasing the business of the company and
reduce the cost on the products.
Legal factors
Walmart is the retail company which is providing the products through the departmental
stores. Company is available 24/ 7 for the customer and the customers are registering the
complaint from all over the world. So the company has to follow the rules and the regulations

according to the company laws and the country laws as well. The laws which are applicable on
the company is the food laws and the discrimination laws. Safety laws and the data protection act
is also levied on the company. The company has to keep the products which are not harming the
customer in the any way. Products must not be expired other it would be levied heavy penalties.
Walmart is keeping the food products which are helping the company to overcome to gain the
revenue. The data of the employees must be secured and safe because these details of the
employees would harm the employees. The company has to follow the laws if not the company
would have to pay the heavy penalties for breaking the rules and the regulations.
Environmental factors
There are various environmental issues which are rising in the country and in the front of
the world. So the company has stated the project gigaton which would be able to fight the
environment issues which are being rising the in the company. The customers are visiting the
online websites and the company is protecting the environment by not providing the plastics to
the customers. The company is also solving the papers and working for the others issues which
have been rising in the country. Green products are the eco friendly products which is sold by the
company in the market. The company is adopting the green packing services which includes the
recycling of the packing material. Packing material includes the plastic recyclers and the
sustainable packaging coalition as well.
P2) Analyse the internal environment and capabilities of the given organisation
Internal environment of the company is affecting the company performance. The
opportunities, threats, weakness and the strengths are affecting the company market and the
performance. So the company is conducting the swot analysis for identifying the internal factors.
Strengths
The customers are visiting the Walmart frequently and the company had to manage the
service and the brand has been recognized by the customers and over the 60 million items are
sold in the online stores of the Walmart. The company is expanding the business in the global
countries as well. The company has purchased the AS DA and the Flip kart as well. The
company has the done the successful joint venture with the retail store Bharti. Through these
stores the company is expanding the business in the global market. Company is not taking the
hault and the expending the business in the global countries through which the company is
building the global presence. Company is providing the products at the low prices which is also

the factors for increasing the business. The company has build the strong market power over the
suppliers and the competitors.
Weakness
The company is working according to the customers but the company is not working
according to the employees. The employees of the company are not satisfied with the working
conditions. The company has also expanded the business in the global countries but it has given
the big problems of controlling the business which is expanded. Due to the low profit margin the
company is not rising the high profits. The company is focusing ton the cost leadership strategy
which is resulting the low profit margin for the company. Walmart business is the retail business
and the business model of the company would be easily copied. These would increase the
competitors in the market and the company would be facing trouble for fighting the competition
because the competitors is having the strategies and the network of the company (Feo 2019).
Opportunities
There are the opportunities for the company in the Market like the company would
expand the business in the global countries. These market include the china and Latin America.
Strategic alliances include the partnership of the company with the other companies. These
would result in the successful partnership for running the business. Small companies are ready to
merge with the Walmart (Diehl. and Bishop 2017). Human resource practices would be
improved because it will affect the productivity of the company. Company is bringing the
innovative ideas for improving the human resource practices which will improve the business
opportunities for the company. The company is concentrating on improving the standards of the
company. These would improve the quality of the products and the company would also bring
some healthy food products for the customers.
Threats
The company is facing the strong competition in the market due to which the company is
not able to improve the company performance. Various political and legal issues are affecting the
company like the company was sued for selling the fake beer (Cantrell, and et.al., 2019). The
company has sell the other company products and it was labelled too. The company is increasing
the business through the online market but the company is facing the problems like the technical
issues which are affecting the performance of the company. Small scale companies are entering
the market and due to that the company is facing the strong competition in the market. The e-

commerce companies are affecting the company performance. The company has also affected
due to impeach 45 controversy. In these the company had made the rope tree picture on the t-
shirt and journalist considered it as promotion of the violence.
P3) Evaluate the competitive forces of the market sectors
The competitive environment of the company would be identified by the porters five
forces model. It is analysing the industry and the competition in the Market.
Porters five forces model is used by the companies for analysing the industry and the
performance of the company. Porters five forces model is framework for analysing the company
competitive environment which is affecting the company. It includes the buyer power, supplier
power and the rivalry among the competitors in the market.
Bargaining power of the suppliers
Bargaining power of the suppliers is low because of the several reasons. The company is
the big retail company and because of that the company has many suppliers (Santos and
Laczniak 2015). Company is buying the product in the bulk and it is increasing the business for
the suppliers. Walmart is holding the largest market share as according to the other companies in
the market. Cost of the product is low so the company would switch the suppliers form one to
another. Very few suppliers are the large companies and the company would not afford to change
these suppliers. The Walmart company is providing the guidelines for the suppliers and also
suppliers would provide the products at the low cost. These conditions of the company must be
followed by the suppliers and if (not) than the company would remove the suppliers form, the
list.
Bargaining power of the buyers
Bargaining power of the buyers is low because the company is selling the products in the
departmental stores and these products are sold at the cost price. The price of the products is
already low and the company could not afford the decrease the price of the products. The
customers are buying the products they are not able to switch to the other company products. No
company in the market is able to provide the products to the customers at the low price. The
lowest pricing strategy is working according and the products are provided to the lowest prices.
Threats form the substitute products
Various small scale companies are making the substitute products and the company
performance is affected by the performance and the cheap quality of the duplicate products.

Substitute products are sell online in the online market. In the case of the online shopping the
customers are provided with the products at the home and it would spoil the performance of the
company. The threat for the Walmart form the substitute product is low because the company is
selling the labelled products and if the condition arises than the company is taking the strict
actions against the substitute products (Phelan and Glackin, 2016).
Threats of the new entrants
New companies are entering the market and the company is facing the strong competition
in the market. The company requires lot of the investment for investing tin the company. Skilled
employees are working efficiently in the company which are satisfying the customers in the
effective way. The existing companies are facing the trouble to compete with the Walmart
because the company has invested the large amount in the company. These companies would not
invest these much amount in the company. So these new entrants would not affect much in the
company performance.
Competitive rivalry among the existing products
New competitors would not be able to fight the Walmart but the existing companies in
the market is affecting the company performance and the rivalry is also affecting the company
performance. Pricing strategy of the company is effective but the other rival companies are also
using these pricing strategy than the customers would be attracted towards the other companies
(Porter and Gugler, 2019). The company is facing the strong competition in the market but the
Walmart is the king of the market. There are very few companies which are able to fight the
competition and try to compete with the Walmart.
PART B
P4) Applying the range of the market theories concepts and models
Strategic management plan
The strategic management of the company is focusing on the mission and the vision
statements. It includes the stake holders and the culture of the company as well. The marketing
mix is also applied in the strategic management plan.
Mission statements
Mission statements are set by the company are set by the company for setting the goal.
The company aims to save people money so that they live the better life. The company has the
trademark of the save money live better. Company is running successfully with the mission,

because the company is following the pricing strategy. Through this strategy the company is
providing the products to the customers at the low prices (Roy, Mazumder and Maity 2018).
Vision statements
The company is following the rule sand the regulations which are set by the SAM
Walton. The beliefs of the Sam Walton are to provide the services to the customers at the lowest
prices is followed. Company has the vision to be the best retailer in the minds of the customers
and the employees.
The stakeholder of the company are the investors, customers employees and suppliers.
These stake holders are important for the company in their effective manner. The investors of the
company are working effectively and the company would work in the efficient manner. The
customer of the company would be satisfied and some customers are loyal towards the company.
In the Walmart the employees are not satisfied with the working conditions. So the company
must take the effective measures for satisfying the need of the employees (Martínez Galván. and
Alam 2017). The (supplier) of the company are more and the company need the best quality of
the raw material. So the company would short list the quality of the raw material and also
suppliers would be satisfied by their performance and the quality of the product (Greenspan
2015).
Business strategy
Cost leadership strategy of the company is attracting the customers because the company
is providing the product at the lowest cost. The company is selling the unique products to the
customers which is attracting the customers.
Cost leadership

company is focusing on the cost of the product and providing the low cost product to the
customers. The departmental chain and the supply chain of the company is managed effectively.
The company is purchasing the product in bulk so the company would buy the products at the
lowest prices.
Differentiation
Walmart is creating the different and unique products which are satisfying the customers.
The unique products are made by the new technology and the innovative ideas of the production
department. The company is providing the every type of the product at the same place and these
could not be provided by the other companies in the market.
Focus strategy
The focus strategy is depends on the segment of the company and the service of the
company. The customers must feel comfortable while visiting the stores. Company is offering
the memorable experiences for the customer which are visiting the stores (Onyusheva and
Seenalasataporn 2018).
Marketing mix strategy
Marketing mix strategy include the marketing of the product and the service of the
products as well. The marketing of the product is done according to the customers demand and
the market behavior towards the company. It includes the price, place, promotion and product.
Product

product of the Walmart is made according to the customers demand in the market. The
product of the company is made in the unique styles which are attracting the customers towards
the company. The products are made with the latest technology and improvised from time to
time and according to the need of the customers.
Price
pricing strategy of the company is efficient because the company is providing the product
at the lowest prices. The process of the products are set according to the customers financial
conditions. The market segments which are buying the products must have the ability to buy the
product (Nandonde 2019).
Promotion
promotion of the product is according to the market segments. The market which is
buying the products frequently. So the promotion of the products must be done in the effective In
that market segment. Promotion of the product is done between the market which are able to buy
the products.
Place
place of the product is important and the place must be made comfortable for table for the
customers which are visiting the place. The stores of the company must attractive and must
provided with all the facilities which are needed by the customers.
Packaging
Marketing mix includes the packaging of the product as well. Packaging of the product is
attracting the customers which are not buying the products.
Positioning
position of the product is attracting the minds of the customers. Service is important but
the product need to be placed at the right place and at the right time.
People
the product must be prepared as compared to the people which are buying the product.
Every single decision of the product is depended on the people need and choices as well.
Recommendations
The company must focus on the strategies which are used in the business. The
performance of the company is depended on the performance of the employees. Employee of the
company are not comfortable with the working conditions. So the company must try to provide

the better working conditions and also provide the better working environment. So that it would
improve the performance of the employee and the performance of the company as well. The
company would focus on the strategies which would attract the customers. The pricing strategy
of the company is good but the company is not focusing on the promotion strategy of the
product. Product need the price but at the same time it would need the promotion of the product.
Then only the customers would know about the product qualities and specification. It will attract
the customers towards the company (Nasir 2017). The company is also focusing on the place of
the stores which are important for the customers. The customers of the company would not feel
uncomfortable while visiting the store. So the customers would be provided with the effective
service and the facilities in the store.
CONCLUSION
From the report provided above the company is focusing on the business strategies which
are having the impact on the performance of the company. The macro environment is having the
impact on the performance of the company and so the internal factors. The pestle analysis
include the political and the legal factors which are having the impact on the performance of the
company. Company is using the strengths and the opportunities. It would overcome the
weakness and the threats which are affecting the company performance. Porters five forces
model is having the impact on the performance of the industry as well. It includes the bargaining
power of the suppliers and the bargaining power of the buyers. It also includes the threats of the
substitute products and the threats of the new entrants as well. The various strategies are
followed by the company and these strategies would improve the performance of the company in
the market. The company also need to take the effective measures for satisfying the employees
which are working in the company.

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