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The External Environment Of Walmart

Decent Essays
There are 7 segment of the external environment that the firms need to understand and analyse which are demographic, economic, political or legal, sociocultural, technological, global and sustainable physical environment. However, some of the firms fail to understand the importance of external environment. This situation happen because they do not understand the external environment will bring an impact on them as a whole. They consider that concentrating on the internal is taken for granted. It is because they feel comfortable with leading and managing what is happening right now. The example of firms that did not understand their external environment is Walmart. Walmart violates the Clean Water Act and at the same time it damages the environment. Therefore, Walmart had to pay a fine of $81 million. If the firm failure to understand the external…show more content…
If the power of the supplier is strong, it can give the pressure to the buyers by raising the prices, lowering quality of the product and reducing product supply. In the meantime, the industry become more competitive and profit potential of the buyer decline. However, if the power of the supply is weak and the buyer’s mercy in terms of quality and price, thus the competitiveness of the industry decline and the profit potential of the buyer increases.
Furthermore, the bargaining power of the buyers will influence the ability of the seller to achieve profitability. If the power of the buyer is strong, it can give the pressure to the seller by lowering the prices, increase the quality of the product and also offers services to the buyer. Therefore, the industry become more competitive and profit potential of seller decline. On the other hand, if the power of the buyers is weak, seller’s mercy in terms of quality and price, thus the competitiveness of the industry decline and the profit potential of the seller
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