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Walmart internal and external environment

Strategic decisions refer to the divisions concerned with the entire environment in which an organization operates; the Company resources, people who constitute the venture, and the interface between the two. The strategic decisions may be characterized by the possession of new resources and the reallocations of resources, and harmonizing resource capacities with their threats and opportunities. Strategic decisions are complex and have to consider various aspects, including the organization's internal and external environmental elements (Murillo, 2017). This essay provides the internal and external environmental factors of Walmart Limited a discussion of how these factors impact the Enterprise strategic decisions add its capacities to remain competitive.

Background of a company

Walmart is one of the giant Enterprises leading in retail and wholesale. The Company was started by Samson Walton, who was focused on awfully excellent customer services and ensuring that customers get value for every coin they spend in the business. Walmart opened its first store in the year 1968 in the outskirts of Arkansas in Sikeston. In the year 1969, the Company was incorporated. By the Year 1970, the Company had already opened more than 38 stores operating with more than 1500 employees and would make sales exceeding 44.2 million dollars (Murillo, 2017). Company in the same year started to trade its stock publicly, and it was soon listed on the New York Stock Exchange. In 1971, the Company had its first hundred split, which was sold in the market for $47. The business also extended into Florida and Nebraska. Today the Walmart limited is still in on for its low prices, which play a fundamental role in its sales strategy (Baumann, 2020).

Internal factors affecting the business

Some of the internal factors which impact Walmart's strategic decision-making include the internal relationships with the company workforce, the human resources, labor-management the Company plans, and policies forgetting its corporate image. Firstly the Company leadership is essential to strategic decision-making. Its formal structure plays a crucial role in motivating the employees towards a common Purpose and developing a unifying vision and mission statement ("8. Working in Walmart, Kunming: Technology, outsourcing, and retail globalization," 2019). The Company's internal environment is characterized by smoothened communication through the utilization of emerging technologies.

Secondly we cannot understate the company culture of focusing on excellence and enhancing the customer utility, coupled with an endeavor to create an enabling environment that enables the company employees to give their best (Murillo, 2017). As the Company hires the most talented employees, the workforce can influence the firm's strategic decision making; the Company developed an innovative and creative environment coupled with enhancing efficiency in operations. The Company's organizational structure is flexible enough to maneuver in the rapidly changing business environment, especially in the technological evolution and changes in the customer demands, enabling the Company to make rapid changes whenever needed. (Kushwah, 2018). The company management guarantees that its internal environmental factors, including the employees, the business assets, and management decisions, align with the business Vision and make positive contributions to the Company's strategies.

Company’s external environmental factors

The external factors which impact the business's strategic decision-making include stiff competition changes in customer perceptions and trends. The retail business sector is often regarded as a free market. Many operators and new entrants into the business pose a significant threat to Walmart. Walmart's faces increasing competition, primarily due to the emergence of the online trading changes in technology, which gave both large and small rival firms significant capacity to compete against the business ("2. Outsourcing in China: Walmart and Chinese Manufacturers," 2019).

Secondly there are rapid changes in the customer purchasing trends and perceptions of the Company (Phillips & Rozworski, 2019). They are increasingly demanding higher quality services and products at subsidized prices, which they expect the firm to deliver promptly. These demands are a massive blow to the company profits; they adversely impact the business cost reduction strategy, as the cost of offering the services outweigh the gains to be derived from the same ("Walmart story," 2013).

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The primary challenge facing the Company

The main challenge confronting Walmart is that the competitors say the Company has to always keep an eye on what these rival businesses are doing and react accordingly. Some of the competitive firms are willing to take higher risks, including operating at an insignificant profit, to increase their market shares which is a significant threat to Walmart Limited. Some rival businesses go beyond standard business trends to provide services like home delivery at no cost to attract more customers (Tiwary & Unhelkar, 2018). It is common for rival firms to offer sales discounts. Walmart Ltd has always engaged in extensive research incoming with unique services and products, giving it a competitive notch against the rival businesses whose strategic moves are constantly changing.

Recommendations for handling the issue

It would be essential for the business to invest in research and development heavily and in the installation of new technologies coupled with training of the employees to equip them with the skills that can increase their efficiency and lower the operating cost of the business. Through mechanization, the Company can reduce its overall operational cost and profit margin even when selling at lower prices, giving it a competitive advantage over the rival businesses and increasing the Company's market share (Satryo, 2018). The Company should determine to invest in the developing economy such as in Africa, where the business can tap new opportunities and enjoy decreased production costs due to an adequate supply of low-cost labor.

References

2. Outsourcing in China: Walmart and Chinese manufacturers. (2019). Walmart in China, 34-53. doi:10.7591/9780801462672-004

8. Working in Walmart, Kunming: Technology, outsourcing, and retail globalization. (2019). Walmart in China, 173-196. doi:10.7591/9780801462672-010

Baumann, S. (2020). Teaching strategic management: A hands-on guide to teaching success. Edward Elgar Publishing.

Kushwah, R. K. (2018). Evaluating a firm’s external environment in Delhi. Journal of Advances and Scholarly Researches in Allied Education, 15(3), 234-237. doi:10.29070/15/57614

Murillo, D. (2017). Contemporary corporate culture. From Walmart to Al-Qaeda, 133-160.

Phillips, L., & Rozworski, M. (2019). The People's Republic of Walmart: How the world's biggest corporations are laying the foundation for socialism. Verso Books.

Satryo, C. (2018). Free Trade Intervention: Political-Economic Intervention on Global Business

The Walmart story. (2013). Two Degrees: The Built Environment and Our Changing Climate, 179-192. doi:10.4324/9780203082997-24

Tiwary, A., & Unhelkar, B. (2018). Business strategies and outcome-driven business architecture. Outcome-Driven Business Architecture, 3-35. doi:10.1201/9781315120218-1

Wiley. (2018). Wiley CIAexcel exam review 2018, Part 3: Internal audit knowledge elements (Wiley CIA exam review series). John Wiley & Sons.