Analysis of Macro and Internal Environment of Walmart

This assessment discusses the macro and internal environment of Walmart with the help of frameworks such as PEST, STEEPLE, SWOT, VRIO and Porter's Five Forces Model. It also presents a strategic management plan to achieve the objectives of the organisation.

Unit 32 Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysis of Macro Environment of Walmart .............................................................................3
STEEPLE analysis......................................................................................................................3
PESTAnalysis of Walmart :.........................................................................................................4
Evaluation of internal environment.............................................................................................5
SWOT analysis of Walmart.........................................................................................................5
VRIO analysis..............................................................................................................................6
Analysis of Porter's Five Forces Model.......................................................................................7
Strategic Management Plan ........................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
The assessment will discuss about the frameworks of macro environment that the
Walmart should focus on to improve its business. Next, it will discuss about the internal
environment of the business with the help of SWOT and VRIO analysis to analyse the
functioning of internal environment. Further, it will discuss the porter' s five force model and
how it will help in improving the competitive edge and market position of the Walmart. Lastly ,
it will discuss the strategic management plan that the company should adapt to improve its
existing products and objectives.
MAIN BODY
Analysis of Macro Environment of Walmart
Walmart is the largest departmental store and online retailer. It is a retail company which
provides a variety of products. To analyse the macro environment of the Walmart, two
approaches can be used PEST analysis and STEEPLE analysis.
STEEPLE analysis.
Socio cultural Factors Social and cultural factors affect the trends which affect the
customer buying decision. This will influence the Walmart
in bringing new products in the market.
Technological Factors New and advanced technology helps this organisation in
improving its marketing and retail operations including
logistics and way of attracting customers.
Environmental Factors Walmart initiated many eco-friendly programs to improve
the image in the eyes of customers and save the
environment (Saidova, and Muminjonova, 2022). It had
claimed that they are using renewable sources of energy to
help in cleaning the energy, and they also reduced the toxic
waste polluting land by 78 percentage.
Economic factors The economic factors such as inflation rates, competition,
employments rates, economic stability which impacts the
profitability of the Walmart in the long run.

Political factors The new rues and regulations imposed by the government
of countries resulted in heavy loss to the company. For
example, Brexit.
Legal Factors The employees of the company that they are not providing
them with the proper seating for working long hours and
due to the company had to pay $65 million to around1000
employees.
Ethical Factors Walmart ha faced issue like compensation of workers,
gender discrimination, exploitation of workers, etc which
must be resolved.
PESTAnalysis of Walmart :
Political Factors The Walmart store is influenced by various policies imposed by the
government. Recently, the bill was passed by the government to
increase the wage rate of the workers to $15 per hour.
Economic Factors It is necessary for the industries to maintain the economic stability
and the Walmart is popular of its low cost products (LEYVA and
et.al., 2018. ). But the rise in the economy may led the Walmart to
increase the production which will affect the prices of the product,
which will made it difficult for the Walmart to compete with other
brands.
Socio Cultural Factors Walmart has faced challenges in adopting with the German Culture
and this resulted in loss of $1 billion because it was developed as
per the American culture.
Technological factors With the updated technology, Walmart adopted the automation
technology and robots to perform its functions efficiently and
easily. It is needed for the companies to opt the technology as it
will help the employees and management in focusing on the sales
and operations(Shtal,and et.al., 2018. ).

Evaluation of internal environment
SWOT analysis of Walmart
Strengths
 Walmart is an A listed company with has a strong brand image in the market. It is one of
the most recognised retail sector brands all over the world.
 It provides its customers with a range of around 60,000 products on Walmart online store.
 The low pricing strategy followed by Walmart attracts a number of customers globally.
 It has strong online presence and maintain its relations with consumers using interactive
posts on social media.
 It strong relations with its suppliers and therefore is capable of getting competitive
advantage over other brands.
Weaknesses
 Many times, the employees of Walmart have filed complaints against the company for
inappropriate policy formulation within the organization (Schleimer, S., 2018).
 Because of such inappropriate policy formulation, the company finds it hard to retain the
employees.
 The company works for low profit margins because of the existence high competition
within the company.
 There was a law suit filed against Walmart in the year 2007 which states that the
company discriminates between the people on the basis of their gender. This affects the
reputation of the company.
 Similarly, there are a number of lawsuits filed against Walmart which states the existence
of racial practices and employee safety concerns.
Opportunities
 Walmart should expand globally in different countries all over the world in order to
extend its reach and increase the profitability of the company.
 Since, Walmart is already engaged in in health care services, it has the opportunity to
expand its health care operations globally.
 Walmart should take steps and formulate strategies in order to increase the online sales of
the company. This will enhance the profitability of the company.
Threats

 Since, there are a number of companies available in this industry, Walmart needs to take
extra efforts in order to maintain its position within the industry (Phan, 2021).
 Customers have complained many times that there are some technical issues within the
website of the company.
VRIO analysis
Resources Valuable Rare Imitation organization
Easy to access
human resource
✓
Diverse
products
✓
Wide range of
private label
brand
✓ ✓
High potential
package
delivery
network
✓ ✓ ✓
Strong Brand
image
✓ ✓ ✓ ✓
Strong
bargaining
power
✓ ✓ ✓ ✓
Huge global
supply chain
✓ ✓ ✓ ✓
E commerce ✓ ✓ ✓ ✓
Consumer data ✓ ✓ ✓ ✓
Employee
training
✓ ✓ ✓ ✓
From the above analysis, it can be stated that all the resources presented in the VRIO
analysis holds importance and value to the Walmart and plays a vital role in contributing towards

the success of the company. However, not all the resources are rare, easily imitable and
contributes towards achieving competitive advantage for the company (Yasobant, Patel, and
Saxena, 2019). Resources that helps the Walmart in gaining competitive advantage over other
organization includes strong brand image, strong bargaining power, huge global supply chain, e
commerce, consumer data and employee training. However, these resources are not enough in
order to retain long term success for the company.
Analysis of Porter's Five Forces Model
FIVE FORCES
Threat of New Entrants For the Walmart industry, the threat of new entrants is very low as it
had a continuous investment in building the brand image and it invest
major of its capital in sales, distribution and marketing.
Bargaining Power of
Buyers
The buyers have a very low bargaining power because the Walmart
had a low price strategy and it is difficult to find in other stores.
Bargaining Power of
Suppliers
In this case , the Walmart as a buyer has a high purchasing power,
because its purchases large volume of products from the suppliers and
its has a broader customer reach (Iyer, and et.al., 2019). This lowers
the bargaining power of suppliers.
Threat of Substitutes The threat of substitutes is low for the Walmart as it offers the
customers with all the products and its various substitutes, thus there
are relatively fewer chances of shifting of customers.
Industry Rivalry There are few rivals in the industry on the basis of the channels of
distribution and pricing strategy, but yet is difficult to compete the
Walmart.
Walmart has already a competitive position and good brand image in the market, but
there are certain strategies that the Walmart can adapt to improve its competitive edge and
market position. Walmart should adopt the differentiation strategy like the other brands such as
Nike, Adidas to improve and increase their visibility in the market thus contributing to the clue
of company (Li, 2020.). Walmart should update the stores with the new technology and also

provide the customers with online ordering services , this will help the company in competing
with the other retail business.
Walmart should focus on improving its customer relationships to ensure that the company
has a strong and loyal customer base that is not breakable. As Walmart faced the issue of
cultural norms in the Germany, this affected the business the Walmart should identify and set up
the business's products and services as per the norms and culture of the region it is operating.
The Walmart should offer the customers with variety of benefits and vouchers apart from what
the other companies are offering, this will create a competition in the market.
As per the changing tastes and preferences of the customers, the Walmart should constantly
change its products and services and also provide the customers with the new and innovative
products this will result in reducing the threat of substitutes for the Walmart because companies
will not be easily compete with the changing needs and preferences and the innovation in the
products.
Strategic Management Plan
Discussion :
Walmart is the largest retail company providing with the wide range of products available
in the market. It provides the customers with groceries, department stores, hyper markets and so
on.
Objectives :
The Walmart objective is to attain higher profitability and improve the competitive edge
of the organisation. This objective will help in improving the market position of the Walmart in
the market.
STP analysis :
Segmentation : to achieve its objectives the company should focus on the demographic
and regional segments of the countries this will enables the companies to understand and
develop the business as per the demand and the needs of the people of particular regions and
areas.
Targeting : This factors will focus on the main objectives of the organisation that the
organisation should focus on to achieve it (Camilleri, 2018). The Walmart has targeted to attract
and achieve the strong customers base to ensure profitability in the business.

Positioning: The factor emphasis on the position that the Walmart has decided to achieve
through improving of its objectives and strategies.
Marketing Mix :
Product : The products offered by the Walmart have attracted the customers , thus the
Walmart should provide them with the superior quality products.
Price : The Walmart had adopted the low cost strategy which is the best and competitive
for the Walmart.
Promotion : Walmart promoted the business and products with the sponsorship
programmes, advertisements and campaigns.
Place : The branches and the stores of the Walmart are operating in almost many
countries across the World and providing the customers with the low cost and goof quality
products.
Action :
To achieve the objectives the company decided to operate wit the low cost strategy and
adapt to the differentiation strategy to provide the customers with variety of products at the low
cost, this will help the Walmart in gaining competitive advantage and better market position.
Control / monitoring :
This stage ensures that the strategies implemented by the Walmart should be constantly
monitored and the operations of the department should be controlled and compared with the
objectives to ensure the way of adjustments and execution of the strategy. This will also help in
reviewing and tracking the progress of the Walmart regarding the objectives. The monitoring and
controlling of the business can be conducted by developing a tracking system that will
continuously assess the needs and the requirements and develop the objectives as per them.
CONCLUSION
From the assessment it is concluded that to analyse the macro environment there are two
frameworks such as PEST and STEEPLE analysis I. To analyse the internal environment, there
are two frameworks such as SWOT and VRIO analysis that will help in organisation to
overcome its weaknesses and threats with the help of opportunities and strengths. Further, it
explained how the Porter's forces model helped in analysing the five forces that affect the
business and the ways to improve its market position. Lastly, the strategic management plan is
presented to achieve the objectives of the organisation.

REFERENCES
Saidova, M. X. and Muminjonova, E. K., 2022, February. USING STEEPLE ANALYSIS IN
BUSINESS PROCESS (IN CASE OF UZBEKISTAN). In International Scientific and
Current Research Conferences (pp. 48-60).
LEYVA, M., and et.al., 2018. A framework for PEST analysis based on fuzzy decision
maps. Revista espacios. 39(16).
Li, S., 2020. ANALYSIS OF WALMART'S INTERNATIONAL MARKETING STRATEGY.
In Актуальные проблемы авиации и космонавтики (pp. 411-413).
Camilleri, M. A., 2018. Market segmentation, targeting and positioning. In Travel marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Iyer, P., and et.al., 2019. Market orientation, positioning strategy and brand
performance. Industrial Marketing Management. 81. pp.16-29.
Shtal, T.V., and et.al., 2018. Methods of analysis of the external environment of business
activities. Revista Espacios. 39(12).
Fengyi, Z., 2021. The Analysis of Asda-Sainsbury’s Merger/Acquisition. Journal of Finance
Research. 5(1). pp.1-6.
Phan, S., 2021. The effect of pestle factors on development of e-commerce. International Journal
of Data and Network Science. 5(1). pp.37-42.
Schleimer, S., 2018. Accounting and Financial Analysis of UK Supermarkets. GRIN Verlag.
Yasobant, S., Patel, K. and Saxena, D., 2019. Hastening One health collaboration in Gujarat,
India: A SWOT analysis. J. Public Health Policy Plann. 3(2). pp.22-24.
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