Walmart's Business Strategy: An Analysis & Evaluation of Changes

This report provides an analysis and evaluation of the changes in Walmart's external environment and its impact on its business strategy. It employs strategic management tools such as PESTLE, SWOT, and Porter's Five Forces to analyze Walmart's strategic position in a competitive business environment affected by factors like the US/China trade war. The analysis identifies issues such as foreign exchange risks and increased competition due to tariffs on imported goods. The report recommends strategies such as tapping into the e-commerce market and remodeling existing stores to enhance the consumer shopping experience. It also emphasizes the importance of adapting to the increasing presence of online retailers like Amazon and addressing threats from national, regional, and local operators. The research uses triangulation method, qualitative and quantitative methods, secondary data collection, and case study evaluation to arrive at strategic recommendations for Walmart to maintain a sustainable competitive edge.

Running head: BUSINESS ENVIRONMENT ANALYSIS OF WALMART
An Analysis and Evaluation of the Changes in Wal-Mart’s External Environment and Its Impact
on Its Business Strategy
Name of the University:
Name of the Student:
Authors Note:

BUSINESS ENVIRONMENT ANALYSIS OF WALMART 1
Executive Summary
Carrying out effective internal and external business environment analysis, certain renowned
strategic management tools are employed by the company in order to analyse the strategic
position of the organizations in the fiercely competitive business environment caused due to US/
China trade war. The research objective is focused on analysing the business environment of
Wal-Mart in order to develop effective strategic recommendations for the company. The research
provided necessary implications that for carrying out effective internal and external business
environment analysis, certain renowned strategic management tools are employed by the
company in order to analyse the strategic position of the organizations in the fiercely competitive
business environment. Wal-Mart is facing issues such as foreign exchange risks and increased
business market competition because of high tariffs imposed on imported goods from China due
to US/ China trade war. Increasing presence of online retailers such as Amazon along with
national, regional and local operators are imposing threats as the e-retailers are expanding their
presence to gain increased consumer base. Another recommendation that is offered to Wal-Mart
in attaining sustainable competitive edge is through developing remodelling strategy. In this
strategy rather than focussing on opening new stores, the company can take the strategic decision
to remodel its existing outlets in a manner for offering simpler and faster shopping experience to
all its consumers. Strategy of tapping into e-commerce market is recommended to keep on
providing consumers with products with low prices despite high taxes on imports due to US/
China trade war.

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Acknowledgement
I would like to express the deepest appreciation to my committee chair Professor, who has the
attitude and the substance of a genius: he continually and convincingly conveyed a spirit of
adventure in regard to research and scholarship, and an excitement in regard to teaching. Without
his guidance and persistent help this dissertation would not have been possible.

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Table of Contents
Chapter 2: Literature Review...........................................................................................................4
2.1. External and Internal Environment Analysis Tools..............................................................4
2.2. Strategic Direction and basis of Competitive Strategy.........................................................5
2.3. Strategy Evaluation and Selection........................................................................................6
Chapter 3: Methodology..................................................................................................................7
3.1. Applying Triangulation Method...........................................................................................7
3.2. Qualitative and Quantitative Methods..................................................................................8
3.3. Data Collection Methods......................................................................................................8
3.4. Data Analysis Method..........................................................................................................9
Chapter 4: Presentation of Findings................................................................................................9
4.1. PESTLE Analysis of Wal-Mart............................................................................................9
4.2. SWOT Analysis of Wal-Mart.............................................................................................12
4.3. Porter’s Five Forces Analysis.............................................................................................14
Chapter 5: Reflection.....................................................................................................................16
Chapter 6: Recommendations and Conclusion..............................................................................17
6.1. Conclusion..........................................................................................................................17
6.2. Recommendations...............................................................................................................20
References......................................................................................................................................23

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Chapter 2: Literature Review
2.1. External and Internal Environment Analysis Tools
Spicer and Hyatt (2017) indicated that the global business environment has rapidly
changed and to thrive in the global business environment, the companies are observed to be in
constant need of management strategies that can facilitate in better organizational development.
Epstein (2018) revealed that for carrying out effective internal and external business environment
analysis, certain renowned strategic management tools are employed by the company in order to
analyse the strategic position of the organizations in the fiercely competitive business
environment. These reasechers also stated that the most common strategic management tools
those are employed by the organizations in attaining strategic insight on its market position
includes porter’s five forces analysis, PESTLE analysis and SWOT analysis. Fahy (2017)
indicated that these strategic management analysis tools facilitate the managers in segmenting
goals into manageable parts. This can be done through evaluating the use of company resources
for generating strategic advantages of cost saving, business growth along with consumer
satisfaction.
 Porter’s five forces analysis: Tan (2017) stated that this is a strategic management tool
developed by Michael E. Porter that facilitates the managers in analysing the external
business environment based competitive forces impacting the company’s strategic
position in the market. It is also gathered that relied on this analysis, the managers can
analyse the threat of entrants, the bargaining power of buyers and consumers, threat of
substitutes, rivalry knowledge and the competitive forces. These researcher also revealed
that through employing this analysis tool the organizational leaders to analyse the impact

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of an industry condition on the business through use of demands on value, prices along
with quantity if services or products.
 PESTLE Analysis: He, Gan and Yuan (2019) stated that PESTEL analysis serves as a
framework or tool those are employed by the marketers in evaluating and monitoring the
macro-environmental factors those have a drastic impact on the company. The results or
findings gathered from imploring this external environment analysis tool can be
employed in evaluating the political, economic, social, technological, legal and
environmental factors impacting sustainable position of the companies. Moreover, it has
also been gathered that this business environment analysis tool can facilitate the
marketers in analysing different factors impacting business performance to develop
suitable competitive strategies.
 SWOT Analysis: Bloom and Hinrichs (2017) indicated that SWOT analysis serves as a
tool which supports systematic procedure for recognizing the company’s critical success
factors such as its internal strengths and weaknesses along with the external threats and
opportunities. These reasechers also revealed that such SWOT analysis tool offers the
organizational managers the required structure required to deal with issues, enhancing
strengths, avoiding threats along with attaining the strategic advantages of the
opportunities for attaining competitive advantages. It has also been elucidated that SWOT
analysis serves as a strategic planning technique that supports the businesses to attain
sustainable niche within the market.
2.2. Strategic Direction and basis of Competitive Strategy
Seenivasan and Talukdar (2016) elucidated that through observing the strategic direction
that is to be followed by the companies based on its external and internal business environment

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analysis the basis of competitive advantage is prepared. Considering same, it has been gathered
that there are two basic types of competitive advantages that is associated with scope of activities
for which a company attains them. This persuades the orgaanzations in developing three major
generic strategies in order to attain above average performance within the industry such as cost
leadership, focus and differentiation. Tan and Gligor (2019) added that the strategic direction of
the companies is directed towards certain major strategic decisions taken by all the companies in
attaining competitive advantages. These strategic decisions includes decisions on markets and
products, decisions on general strategies, decisions regarding growth and development actions
and business growth and development decisions taken by the companies based on analysis of its
business environment. Jenkins and Williamson (2015) stated that strategic direction concept can
be explained as course of action which results in attainment of goals of an organizations strategy.
It has also been elucidated that strategic planning is considered vital for the organizations as it
offers a sense of direction along with outfling the measuring goals. Strategic planning can
support the strategic direction of the organizations in attaining effective competitive strategies as
it offers sense of direction along with outlining the measurable advantages.
2.3. Strategy Evaluation and Selection
Martínez, Galván and Alam (2017) explained that the strategies those are selected by the
companies in attaining competitive edge within the fiercely competitive business market can be
selected and evaluated by consideration to several aspects. The strategies selected can be
evaluated by measuring them in terms of their suitability, acceptability, feasibility and advantage
obtained by organizations. In addition, these reasechers also indicted that financial and non-
financial tools can be employed in evaluating the strategic options selected by the organizations.
Chen (2016) indicated that certain financial tools such a cash flow forecasting along with

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investment analysis techniques along with the non-financial tools such as consumer satisfaction
and increased brand loyalty of consumers towards the brand. The most suitable strategies are
selected by the companies based on suitability of the strategy in addressing company’s strategic
objectives along with its capabilities to capitalise on strengths and opportunities. These
reasechers also revealed that strategy selection is decided by the companies based on its
feasibility that includes the proposed manners in which the strategies can be proposed and
whether the companies can perform and compete at a needed level. Chong and Olesen (2017)
added that consideration of the acceptability as aspect also facilitates in suitable selection of
organizational strategies that considers acceptance of proposed strategies by stakeholders
involved along with their impact on them and companies financial structure. The advantages
attained by the strategies developed can also facilitate in suitable selection of strategic options
that can support companies in obtaining better competitive advantages.
Chapter 3: Methodology
3.1. Applying Triangulation Method
Triangulation method has been employed in carrying out qualitative research on
analysing the “Changes in Wal-Mart’s External Environment and Its Impact on Its Business
Strategy”. This facilitated in data validation by means of cross verification from more than two
sources. More specifically Saunders, Lewis and Thornhill (2015) defied the triangulation method
as the application of a combination of numerous research methods within the study of the similar
process. In employing triangulation for analysing the strategic position of Wal-Mart due to US/
China trade war, the case study research method was employed within which use of data sources
along with multiple theories within the research (Patten and Newhart 2017). This facilitated in

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data validation and making sure that the secondary data analysed from the annual report of Wal-
Mart is valid, reliable and generalizable.
3.2. Qualitative and Quantitative Methods
Qualitative research method is defined by Hair Jr et al. (2015) to be a study employed in
uncovering trends within the opinions along with attaining deeper view within the issues faced
by Wal-Mart. On the other hand, quantitative research is defined by Silverman (2016) as a study
that emphasis the objective measurements along with the mathematical, statistical or numerical
evaluation of the collected data by means of questionnaires and surveys or by means of
manipulating the existing statistical data employing calculation techniques. Qualitative data was
gathered in analysing the strategic management issues faced by Wal-Mart through proper use of
secondary resources (Patten and Newhart 2017). Quantitative data was also analysed from the
annual report of the company in evaluating its strategic position based on its financial statements
for over the years 2018 and 2019. Qualitative data analysis method has been considered in this
research for the reason that it refers to meanings, concepts, definitions along with description of
the issues faced by Wal-Mart.
3.3. Data Collection Methods
Secondary data collection method was employed in this research of analysing the
“Changes in Wal-Mart’s External Environment due to US/ China trade war and Its Impact on Its
Business Strategy”. In collecting secondary data Wal-Mart’s annual report in the year 2017,
BBC News in the year 2019, certain other websites, articles along with use of the PESTEL,
SWOT and the porter’s five forces analysis tools (Patten and Newhart 2017). Such approach has
also facilitated in analysing the industry as a whole along with comparing it with the Wal-Mart
along with the academic literature.

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3.4. Data Analysis Method
The data analysis method that was employed in the current research is case study
evaluation of the Wal-Mart company that will facilitate in analysing the internal and external
business environment in order to decide the necessary strategic options for the company.
Moreover, case study data analysis is employed in this research as it can facilitate in serving as
the most common manner in carrying out qualitative research that facilitated the researcher in
retaining the holistic along with better insights of real-life events (Hair Jr et al. 2015). Case study
data analysis technique served as an empirical research technique in which there exists multiple
evidence sources with data required to converge in a triangulating manner. In analysing the case
study of Wal-Mart five components were taken into consideration in analysing the strategic
management issues faced by the company. This included the reasechers objectives, the logic
linking of data with the propositions along with analysing the criteria for findings interpretation.
Chapter 4: Presentation of Findings
4.1. PESTLE Analysis of Wal-Mart
PESTLE analysis is carried out for Wal-Mart in analysing the macro-environment within
which the company operates its business. Based on the issues recognised in the external business
environment of the company, certain effective strategic decisions are developed for Wal-Mart in
supporting its strategic direction (Ural 2016).
 Political- This force is considered to be important for Wal-Mart those are attempting to
operate within the international business environment. The international business
landscape imposes certain different political structures and governance models that are
majorly observed to take place because of US/ China trade war. For instance, there

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emerged a list of goods that Wal-Mart sources from China that is great subject to new
tariffs that is imposed on imports encompassing consumer goods for the first time
(Gattorna 2017). The complex regulatory set up imposes big obstacles for the foreign
businesses. The issue that is faced by Wal-Mart is that political turmoil is not that open
and widely for all foreign brands.
 Economic- Shipping and Zehou (2016) explained that for Wal-Mart to operate business
internationally a flourishing economy is favourable. It has been gathered that the situation
where the office in charge of China tariffs Wal-Mart was warned that the latest tariffs on
$ 200 billion worth the Chinese goods can result in major disruptions within the
company’s supply chain and price increases for their shoppers. In addition, it has also
been gathered that the current economic situation is not favourable for Wal-Mart as
profitability for the retail sector internationally is anticipated to increase in the upcoming
years.
 Social- Ravi (2015) elucidated that the social factors are considered important for
ensuring profitability of Wal-Mart international business. Consumer demographics have
undergone a major change as the current consumer generation prefers online shopping.
However, it is also observed that the US/ China trade war has great impact on consumer
prices as goods have been imported from China with duties that can be an issue for price
sensitive consumers in US. This poses an increased threat for the business of Wal-Mart as
it is a physical retailer. Moreover, other than increased technological growth, consumer
service along with convenience, social media and consumer engagement in a situation of
high tariffs has become vital trends affecting retail sector business.