Essay Sample on Walmart Business Environment

Introduction and Scope

In the current business environment, there is a growing level of intense competition amongst competitors, technological advancements, growing consumer demands, as well as, regulatory changes among others (Rowley 2002. Due to these factors, it is prudent for an organization to pursue business modes and tools that they can use to maintain their position and safeguard their competitive advantage while lowering its operating costs and improving profitability. E-commerce is one of such tools that assist companies in going through such. Principally, electronic commerce has revolutionized how organizations operate, making the 21st century to be regarded as an electronic economy. Therefore, this paper examines e-business in Walmart. The paper begins by offering a succinct description of the company and a brief overview of the electronic business practice.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The present paper also examines e-business in Walmart through macro and micro environmental analysis and market analysis. Porter's five forces allows the reader to carefully consider what it takes for new firms to enter into the market with Walmart, possible shopping options at Walmart, the power that buyers have over the Walmart's operational plan, roles that suppliers play in the company, as well as, the manner in which Walmart measures up against other players within the market. This is performed to determine the present market condition analysis so that detailed background information about Walmart is provided before digging into more excellent details regarding its e-business strategy. Next, the paper examines communication mixes, supply chain management, and customer relationship management to understand how the company incorporates e-business strategies in them to remain competitive. The paper concludes by offering detailed suggestions of how Walmart can improve its e-business practices to enable them to become the leading giants in the online retail business industry.

Company Profile

Walmart is an international corporation based in the US that operates numerous warehouse stores, as well as, departmental discount stores across the US and in other nations across the continents. The company is believed to the most significant public corporation in terms of revenues. Walmart operates about 8500 stores in 15 countries and has remained successful in the international retail market (Kim 2008). All the stated stores deal with various forms of merchandise such as groceries, electronic appliances, apparel, furniture, health and beauty products among others. When a question was posed to him on whether Walmart intends to become the global leader in both offline and online retail industry, one of the company's senior officials revealed that the fundamental aim of the company is to grow. Principally, this has been apparent from the expansion approach and aggressive growth that the corporation adopted in various markets across the world. Reportedly, Walmart has been expanding at an alarming rate with the critical strategy of maintaining low prices.

As already stated, Walmart has about 85000 stores in different business segments that include Walmart international, Walmart stores, and Sam's Club. All these stores stocks unique products such as groceries, electronic appliances, furniture, health and beauty among others (Kim, 2008). In the business segment, the firm has about 54% of its stores situated in the US while the remaining international stores are majorly located in China, central and South America. The firm majorly concentrates on offering reasonable prices to its customers to attract potential customers and retain the existing ones.

Audit Report

Market Analysis

Currently, both offline and online retail market is influenced by various factors including social, cultural, and technological trends. E-business enables customers to buy goods at their convenience thereby eradicating the inconveniences that such persons experience while moving from one retail shop to the other in search of products and does not require consumers to complete their transactions between the specified business hours of different companies or enterprises. Most people across the globe understand and experience the need for the internet and technology. Indeed, these are things that are developing into an integral element of people's daily lives. Due to this cultural trend, e-retail is a market that ultimately has the potential for growth.

In terms of competitive rivalry, the retail market has a high level of competition because the number of competitors in the recent past has increased significantly. Similarly, traditional brands are entering the online sales thus offering further rivalry to the already online retailers. The competitors of Walmart encompasses Amazon and eBay among others. These giants are not only the organizations that pile competitive pressure on Walmart but numerous small scale retailers, online stores and brands (Mun, & Yazdanifard, 2012). The threat posed by the new entrants is relatively low. It is straightforward to design an online retail store but reaching the level of Walmart, eBay and Amazon require much effort, time, and investments. The proliferation of digital technology has transformed the retail industry in a significant manner. Various new brands have managed to come into e-business retail industry. At the same time, numerous local and international brands that emerged. It is easy for all these brands to enter the market, but it will be difficult for them to compete or overcome giants such as Walmart. Similarly, other factors such as brand reputation and time make it difficult for such items to compete in the market.

The suppliers' bargaining is extremely low. Given that it is one of the well-established players within the retail e-business industry, Walmart often has a competitive edge over other suppliers present in the supply chain. Despite having a large pool of suppliers, Walmart ensures that they adhere to well laid regulations and rules. Further, because of the large scale of its products, it is difficult for the suppliers to influence the prices of products that the company offers. In the e-business retail industry, buyers bargaining power is relatively high. Walmart ensures that customers receive products promptly and they are given the opportunity to launch any complaint regarding the delivered products. More importantly, most buyers are updated and are numerous alternatives to select from. Therefore, buyers pile high pressure on Walmart because of the intensity of competition that the company experiences. Lastly, there is top threat of substitutes. Reportedly, the substitution of Walmart are retailers such as Amazon that offer similar products that the company sells. Given that Walmart hardly sells unique products, it experiences high threats of substitution.

Micro and Macro Environment

Micro Environment

Corporate structure is one of the leading microenvironment factors that influence the operations of Walmart. Walmart is structured into three key business units that include Sam's Club, Wal-Mart Stores and Wal-Mart International. Although the company is a public corporation, a more significant percentage of its stock is still being owned by its founders and their families. As such, there is a high level of family involvement in the top management level. The incorporation also has a hierarchical structure that ensures effective management. Further, it has a strong culture fuelled by its unique ways of doing things.

In terms of management, the company's top control and most of its support functions are centralized, and this ensures effective coordination of its activities. Indeed, most of its senior management began from store managers and worked hard towards top positions. Every employee who wants to become an effective executive in Walmart must first gain experience in store as this enables him or her to understand what she is talking about. Due to the centralization of the management, all store managers are required to submit reports and update inventory daily to the company's headquarter for reviews.

Corporate culture also constitutes the microenvironment of Walmart. The company is down to earth and dedicated to doing their best. Its management believes that a strong culture enables the organization to become the leading retail giant across the globe. It assumes that customers, how they are treated and their feelings about the company is a critical factor for the continued success that the business has witnessed over the years. Further, its primary concern is low cost, low cost, and low cost. Similarly, the organization markets itself as the best place to work in and that workers have favorable conditions as the management is always ready to assist every employee to grow in all perspectives.

Walmart has an active research and development department that carries out studies to establish the changing needs of its customers. Recent reports indicate that Walmart continues to experience the challenge of declining profits. Therefore, to eradicate this menace, its research and development department should conduct research and introduce myriad of products, especially private label brands that are believed to have higher margins. Hunt, Watts, and Bryant (2018) noted that Walmart keenly follows social trends and supply chain technology. It also monitors its competitors closely by examining their strategies to learn from its mistakes. More importantly, its management monitors demographic patterns, as well as, tastes and preferences of consumers tailor its products towards the customers' needs.

Stakeholders is another critical microenvironment factor that influences the operations of Walmart. A report by Hunt, Watts, and Bryant (2018) indicated that Walmart is committed to involving all its stakeholders both externally and internally to become the leading responsible and sustainable retail giant across the world. The organization believes by paying attention to and collaborating with their stakeholders; they are indeed addressing various wants and needs of their customers. As it continues to pursue its corporate goals, Walmart further strengthens its rapport with stakeholders to improve transparency and become relevant to consumers and societies that they serve.

Macro Environment

The political factors entail government factors or policies formulated or driven by the government. At times, these policies could involve tax reforms that directly influence the selling price of commodities that an organization stocks. The political stability of the US where Walmart is situated an excellent opportunity for the entity. Similarly, better intra-governmental rapports are other great opportunities for international organizations such as Walmart. Some of the threat factors of Walmart in the political sphere entail various government policies related to the expansion. In particular, developed economies such as Canada and the US makes the company flourish while developing nations indirectly halts operations and performances of the entity. Usually, Walmart ensures that it understands the political situations of every nation it operates in and also creates a good position about the political issues. More importantly, the company is always ready to handle any challenge regarding the political sector.

The performance of Walmart depends on the economic conditions of countries it operates its online and offline retail business. Reportedly, the financial stability of many developed nations increases the possibility of Walmart succeeding in these markets. Essentially, such conditions lower economic issues within the macro environment thus lowering the risks of the entity expanding its online and offline retail busines...