External Environment Analysis

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External Environment Analysis MGT/488 October 21, 2010 Patti Berlin External Environment Analysis Sam Walton began Wal-Mart in 1962 and opened the first store in Rogers, Arkansas (History, 2010, p. 1). Walton was not new to the retail industry and had traveled the United States to learn as much as possible about the industry. Walton knew that customer needs were important to success and he wanted to know as much as possible about the industry to meet those demands. Sam Walton experienced strong competition from retailers such as Target and Kmart when he decided to expand the company. Currently, many retailers compete with Wal-Mart; however, the company has diversified to tire servicing, pharmaceuticals, home improvement, and…show more content…
35). External influences can be composed of “demographic, economic, political/legal, sociocultural, technological, and global” (Hitt, Ireland, & Hoskisson, 2009, p. 35). Wal-Mart experiences immense competition because of the organization’s product variety. Regardless of Wal-Mart’s market strength, Hitt, Ireland, & Hoskisson (2009) state: Wal-Mart faces substantial competitive rivalry as Target, Costco, Kroger, Safeway, Walgreens, CVS, and Best Buy are beginning to increase their sales and market shares. However, Wal-Mart’s market power cannot be ignored. The greater a firm’s capacity to favorably influence its industry environment, the greater the likelihood that the firm will earn above-average returns (p. 36). Different types of industries may need to maintain different elements to guarantee they continue to operate in the event a disaster occurs. An organization must assess and establish vital operating functions and prepare to use these functions to ensure the business can operate in the event of a disaster. Wal-Mart’s strategic business continuity plan is affected by competitors and the external business market. Wal-Mart must recurrently evaluate its continuity plan and adjust for alterations internally and externally. General, Industry, and Competitor Environments Although competition is fierce, Wal-Mart benefits
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