External and Internal Environments Essay Example | Topics and Well Written Essays - 2000 words

External and Internal Environments - Essay grammatical caseThe company is engaged in the business of running retail stores that come in various formats manage discount stores, supercentres, neighborhood markets, etc. worldwide. The products of the company are also offered through different e-commerce websites that includes samsclub.com and walmart.com. Wide lop of merchandise products are also offered by the company which comes at eery day low impairment (EDLP). The companys operation is divided into three broad segments namely, Wal-Mart International, Wal-Mart US and Sams Club. External Environment Analysis The external surroundings in which Wal-Mart operates its business activities shadow have a significant impact on its evolution and sustainability in future. The various external environmental factors that can have an impact on the company and its corresponding retail industry can be better understood through the PESTEL analysis. It stands for Political, Economical, Social , Technological, Environmental and Legal factors concerning the system. Of all these sextette environmental factors the Economical and Social factors can have a significant impact on the organization and the industry in which operates its business. A detailed analysis of these two factors has been discussed below a. Economical Factors United States is considered to be one of the largest economies of the world with gross domestic product (GDP) of around $15.09 trillion and per capita GDP of around $49,000 in 2011 (CIA, 2012a). The recent global financial crisis (GFC) had a significant negative impact on the US saving but it recovered well. The US retail savings which also suffered a setback due to GFC is expect to have a steady growth. The disposable income of the US population is also expected to increase. All these factors can have a positive impact on Wal-Mart in increasing its sales in the extraverted years through its low and rivalrous pricing strategy. b. Social Factors Th e increasing healthcare costs and the ever increasing aging population of US are study concerns for the country at present. Another major social concern for the country is the rising inequality of income. United States has been ranked 42 out of 136 nations with detect to the income equality parameter as evaluated by the Gini coefficient (CIA, 2012b). Although US economy as a whole has see consistent growth it has not translated into redistributive social policies and increased wages. All these social concerns can have a significant impact on Wal-Mart because it employs large number of laborers and the wages issues associated with them can hamper the future growth prospect of the company. Industry Analysis Porters five forces model helps an organization to assess the competitive forces which exists in spite of appearance the industry (Hill & Jones, 2012, p. 49). The forces which help out in the process are named as a) threat of crude entrants, b) threat from the substitute produ cts or services, c) bargaining power of the suppliers, d) bargaining power of the consumers and finally e) competition within the industry (Society for Human Resource Management (U.S.), 2006, p.38-39). Out of the five competitive forces mentioned above two intimately important forces that can have a significant impact on Wal-Mart has been described below a. vendee Power The retailers that operate in the retail industry vary greatly in their size with watch over to companies like Wal-Mart who are having large chain of supermarkets