Environment Analysis of Walmart: Political, Economic, Social, Tech

This report offers a comprehensive environment analysis of Walmart, focusing on its operations in Australia. The analysis begins with an overview of Walmart, including its history, global presence, and key strategies. It then delves into a PEST analysis, examining the political, economic, social, and technological factors influencing Walmart's business environment in Australia. The report further utilizes Porter's Five Forces to assess the competitive landscape, including the threat of new entrants, bargaining power of suppliers and buyers, and rivalry among existing competitors. A SWOT analysis is also included to evaluate Walmart's internal strengths and weaknesses, as well as external opportunities and threats. The report identifies Walmart's competitive advantages, such as its strong brand reputation and low pricing, while also acknowledging weaknesses like high employee turnover and product differentiation. The conclusion suggests that Walmart's strengths outweigh its weaknesses in the Australian market. The report includes a detailed list of references to support the findings.

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ENVIRONMENT ANALYSIS

INTRODUCTION
Environment analysis has a significant role in business
growth. It is a tool that assists in identifying the external
and internal factors that affect the business. It helps in
determining the possible threats and opportunity
prevailing in the business environment of a company.
Walmart is a growing multinational company. In order to
continue availing the benefits of higher sales and profit,
it is essential for the company to analyze its business
environment in Australia.

WALMART OVERVIEW
 It is American multinational retail.
 Sam Walton founded Walmart in the year 1962.
 It has 2.2 million associates in the global world (Walmart,
2019).
 It has e-commerce websites in 10 countries (Walmart,
2019).
 It has 11766 stores in the year 2019 (O'Connell, 2019).

PEST ANALYSIS
Political Factors
Australia has a low crime rate.
The government protects human and business
rights.
It permits grants and incentives to business
(Cunneen, 2011).

CONTINUED
Economic Factors
 Interest rate- 4.39%
 GDP -1.2 Trillion
 Inflation rate: 2%
 Per capita Income - $50,334
 Unemployment rate - 5.6%
(Heritage, 2019)

CONTINUED
Social Factors
 Australia is a hub of multi-cultures
(Commission, 2015).
 Australians follow the individualistic culture
(Salt, 2011).
 Their junk consumption level is high
(Vartanian, 2012).
 They are developing a health issue of obesity
(Smith, 2012).

CONTINUED
Technological Factors
It has a high internet speed.
It attains the 17th position for innovative.
Government encourages:
Modernization
Technological development
(Liddy, 2015)

PORTER’S FIVE FORCE ANALYSIS
The threat of new entrants (Low)
• Existing companies attain patents rights
• Customers are loyal
Bargaining power of suppliers (High)
• Limited suppliers in contrast to customers
• Suppliers are large

CONTINUED
Bargaining power of buyers (Low)
• A large number of buyers
• Availability of a few suppliers
The threat of substitutes (High)
• Ease in the availability of substitute product
• Alternate product price is attractive

CONTINUED
Rivalry among existing competitors (High)
• Product differentiation is low
• Competitors are of similar size
Competitive advantages
• Strength in Omni channel (Waldron , 2019)
• Higher sale of pet product (Lord , 2019)
• ‘Everyday-low-prices’ (Bird , 2019)

CONTINUED
Strengths
Esteemed Goodwill (Macrotrends, 2019)
Low pricing (Anand & Mukherjee, 2019)
High product demand (Brands, 2019)
A high number of stores
High revenue (Statista, 2019)
Weaknesses
High employee turnover (Reuters, 2015)
Low product differentiation

SOURCES
The significant sources that assisted the Walmart in
gaining competitive advantages are:
• Marketing department
• Higher management authority