Walmart: PESTLE Analysis

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The company that I am writing about is Wal-Mart. This company is the largest retailer in the world. They compete both domestically and in several other countries around the world. Wal-Mart competes in three distinct retail spaces, as a discounter, as a warehouse club (Sam's Club) and as an online retailer, where Wal-Mart ranks fourth behind Amazon, Staples and Apple (Internet Retailer, 2012). The General Environment A PESTLE scan helps to understand the general environment in which the company operates. The different environments are the political, economic, social, technological, legal and environmental. For Wal-Mart, the two most important arguably are the economic and the technological. The economic environment is critical for Wal-Mart in several ways. The first is that the company is dependent on levels of discretionary income. Consumers often choose Wal-Mart for staples, but the company benefits from those consumers having money left over to make other, discretionary, purchases. For a company with slim margins like Wal-Mart, maximizing the average ticket is a critical success factor. That said, Wal-Mart also sees some benefit from economic downturn, as some consumers "trade down" to Wal-Mart from higher-priced stores in order to stretch their budgets further. There are other economic factors that are critical to Wal-Mart as well. Chief among them is the cost of buying goods from China, which in turn is dependent on the Chinese rate of inflation, and the rate of

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