Research and describe the internal and external environments of Wal-Mart and Target Stores companies using an environmental scan?
Wal-Mart
Wal-Mart store refers to the public multinational organization in America, which operates under retailing industry. The significant aim of the store is to ensure that it provides the public with goods at an affordable price so that they can save enough money and live better. However, this has enabled the company to encounter a continuous growth. Currently, Wal-Mart ranks the most successful and largest retail company around the globe. The company has over 8969 retail companies located in 15 dissimilar countries. Therefore, this segment aims at analyzing the external and internal environment of the company. The part will start by highlight the external environment of the stores. Firstly, there is the general environment, which analyses the PESTEL factors. These include the economic factors of the company whereby the company has been reporting an increase in its general sales, despite the general weakness in the world economy. There are social cultural factors, which include the fact that it targets the low-income customer segment. Notably, there is a global factor where the company believes in providing different stores for different folks within every country that they operate. Additionally, the company applies modern technology in maximizing their operational efficiency. The company has also been able to work against the political and legal laws, which were discriminating against other individuals. Demography is also another factor since the company has ranked the largest employer within private industry offering employment to more than 1.3 million associates (Diermeier, 2011).
Remarkably, other external factors at Wal-Mart include its industry environment, which is a retailing empire with tough buyers that negotiate and demand for collection of service and price concession. The company also insists on suppliers maintaining their prices so that they can be in a better position of providing their customers with high quality goods at a cheaper price. Additionally, there is SWOT analysis imperative in analyzing both the internal and external status of an organization. Therefore, the analysis focuses on organizational strength, weaknesses, opportunities and strength. For example, the strength of Wal-Mart includes being the largest company around the globe, good reputation, applying technology and has a huge lead. Moreover, the company also has some weaknesses, which include high rates of employee turnover, face much criticism, fail to attract many employees due to their lower salaries, and operates in fewer countries. As well, the company has the following opportunities. The company has many international markets that it can target and it can apply dissimilar strategies for varying markets. Finally, its threat includes high competition on the market, political pressure and new laws among others(Diermeier, 2011).
Target stores
Target store is among the leading corporations around the globe founded in 1902 by George Dayton. Therefore, description of external and internal environment of the stores can be through PEST analysis. PEST analysis classifies the environment of the corporation into political, economic, social and technological environment. Initially, the political environment has been changing every period, which has caused some impact on the corporation. The economic environment entails increase witnessed in international fuel, thus affecting the corporation by forcing it to implement the best ways of reducing their delivery costs. Sociological factors include influx of affordable labor from immigrants which has become an advantage to the company. The company also applies new technologies thus increasing their production and marketing. Description of both internal and external environment of target can be through SWOT analysis. These include the strength, weaknesses, opportunities and threats of the corporation(Lin, 2011).
Determine what competitive advantages each company has and what strategies each company is using.
Wal-Mart strategic leadership, is a competitive advantage because it enables it to lead its employees effectively thus working towards meeting organizational goals and objectives. It further applies corporate governance. The company also has valuable capabilities because it can turn threats into opportunities(Diermeier, 2011). On the contrary, the competitive advantage of Target stores includes leadership strategy, differentiation strategy and focus strategy among others.However, both corporates use two different strategies, which include business level strategy, as well as, corporate level strategy. In business level, strategy the companies ensure that they integrates and coordinate commitments thus enabling them to attain the competitive advantages. Moreover, they also apply corporate level strategy thus being able to identify other industries and their competitors, which help them in achieving their purposes and attaining competitive advantages (Lin, 2011).
How does each company create value and sustain competitive advantage through business strategy?
Business level strategy has been beneficial for both companies. For example, business strategy has enabled Wal-Mart to create value and sustain competitive advantage in the following ways; initially, the company decided to compete with every strategic business unit, and rivals within the industry through generic competitive strategies. This strategy enables them to choose on where to concentrate their resources and capabilities. Wal-Mart conducts value chain analysis, thus being able to understand the part that will create value and the one that will not. Therefore, this supports it in avoiding activities that will affect it negatively thus focusing on constructive ones(Diermeier, 2011).Additionally, Target stores apply business level strategy in creating its value and sustaining competitive advantage. This is because the strategy supports the company in implementing leadership strategy, which support it in becoming the lowest cost producer thus achieving the cost advantages, get much profit and lead in the industry (Lin, 2011).
What measurement guidelines is each company using to verify its strategic effectiveness?
In measuring strategic effectiveness, both companies apply different measurement guidelines. For example, Wal-Mart applies the effectiveness of the strategy by analyzing the outcomes on whether it produced the targeted outcomes. As well, the company applies cost effectiveness, where it focuses on whether their attractive costs increase or lowers their profits (Diermeier, 2011). On the contrary, Target stores measures the effectiveness of their strategies through measuring the total profits that they acquire after selling their commodities. All the measurement guidelines applied by each company are effective. This is because through measuring the outcomes, the company can be in a better position of determining its production rate thus knowing whether it is making profits or losses. Using cost effectiveness can allow the corporation to alter its prices in case it is making losses. Finally, determining the profit that the stores make is vital because in case it experiences some losses, it might decide to analyze the strategies and know where to make changes(Lin, 2011).
References
Diermeier, D. (2011). Case study: Walmart. FT.Com, Retrieved from http://search.proquest.com/docview/858311761?accountid=45049
Lin, H. -. (2011). Efficiency analysis of chain stores: A case study. The Journal of the Operational Research Society, 62(7), 1268-1281. doi:http://dx.doi.org/10.1057/jors.2010.97
