Strategic analysis is concerned with the structuring of the relationship between a business and its environment. Disciplined approach is emphasized. resulting in functional improvement in quality and processes. The environment in which business operates has a greater influence on their successes or failures. Political ideology and political stability strongly influence the pace and direction of the economic growth.
It contributes to the economic environment which is conducive to Walmart to grow in the situation Nevertheless, the deteorating standards in politics, increasing corruption and the criminal nexus are creating hurdles for business in certain areas. It is important to understand the forces of external environment the way they influence this linkage. The external environment in the Walmart Group is dynamic and changing holds both opportunities and threats for the organizations.
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The factors in the environment affect the attractiveness or risk levels of various investments of the organizations or the investors The macro environment in which Walmart operates broadly consists of the economic environment political and legal environment and the socio cultural aspects.
The competitive environment is the situation when the organization faces within its specific area of operation. In a given industry different organizations have different intermediate basis of understanding its relative position with respect to other organizations in the industry.
Entry of a firm in and operating in a market is seen as a threat to the established firms in that market. The competitive position of the established firms is affected because the entrants may add new production capacity and it may affect their market their market shares. The technological temper and its progress has been the key driver behind the major changes witnessed in the internal environment of Walmart making it increasingly complex.
Customer and Market Analysis
Customers with a stronger bargaining power relative to their suppliers may force supply prices down or demand better quality for the same price and may demand more favorable terms of business. For instance, there will always he a difference in the bargaining power between an individuals buying different construction material like cement, steel or brick and a real estate builder buying them for the number of properties he may have been building over so many years. Customer’s buying behaviors vary with respect to their sensitivity to prices.
Depending on how important the item is for the customer’s usage and proportion he may be spending on the item concerned, buyers’ sensitivity to price varies. Any customer with high price sensitivity gains advantage in its bargaining power.
Internal Factors Company Situation
In order to take full advantage of its assets the organization needs to develop skills, as experience suggests that with similar assets two different firms may add value of different amount for them selves. This difference can only be explained by the differences these organizations carry their capabilities in utilizing these assets.
For example, in a sector like management education, in a typical segment you will find institutions more or less with similar resources and infrastructure, however, the quality of their output in terms of new professionals for business may be starkly different for different institutions. This is greatly reflected in the type of organizations that pick them up for employment and the kind of job responsibilities they are offered. This difference in output can be explained on account of the skills which these institutions carry with themselves.
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