Walmart Analysis

Wal-Mart Analysis External Environment Analysis . When we talk of the environment of a firm , we are essentially talking of the circumstances to which the firm operates . It consists of the following categories : 1 ) competition , 2 economic environment , 3 ) regulatory environment , 4 ) Technological environment , and 5 ) social environment (this is the cultural and political nature of the environment . At present , Wal-Mart was able to stave off some of its competitors by instituting low price tags for its products . However , some of its competitors , notably , Dollar General was able to neutralize the price

advantage of WM by putting its price levels on the same footing with WM . WM should lower its price level just above the firm 's firm on a new price advantage situation which other competitors , by virtue of their higher variable costs , would not be able to match . With regard to economic environment , Wal-Mart is vying to open stores in China . This is a good strategy since labor price in China is 50 less than labor price in America . Wal-Mart needs to maximize this opportunity by shifting its capital base by at least 21 to rich-market China . This may be also true for the regulatory , technological and social aspect of the external environment . Both China and the US are instituting laws that would stimulate capital inflows (although the US Congress refused to lower the labor price for some specified profession . This would naturally stimulate WM to renegotiate for tax cuts and special privileges from the Chinese government (which approved 40 , 000 companies to open this year . Lobbying for tax cuts and labor price flexibility in China (not in US ) would drive WM to higher profit levels

General Environment Analysis . The general environment is essentially the relationship of the market to the general consumer-base . As the price of a good decrease , demand increases and vice versa . A shift in demand is also a necessary feature of the general environment . The demand schedule changes because of five factors : 1 ) population , 2 ) regulation , 3 technology , 4 ) disposable income , and 5 ) consumer 's tastes and preferences . In general , consumers are more willing to spend their dollar to products sold by WM . Added to the general policy of WM that each customer be welcomed (warmly received , it is also the policy of WM to show to the customers wide range of products (120 , 000 types of products . This motivates the consumers spend their money on WM products , shifting the demand schedule to the right . Wm may employ other strategies like giving consumers extra products (part of the firm 's inventories - those who were not bought off ) to increase consumer demand for WM products

Demographic Segment . This generally refers to the demographic characteristics of the firm 's consumer base . Although WM is able to capture the US economy by instituting the so-called national-brand strategy , it generally needs to adjust its product policies after it set up WM subsidiaries in China . The Chinese people , or more accurately the Chinese consumer prefers local products than imported ones...