April 27, 2014
Companies should do an environmental scan to monitor, collect, and evaluate information to look for changes in the natural, social, and environmental factors. This information will be used to determine if the trends will continue or if other ones will take their place. Companies also need to do an internal scan to determine their strengths and weaknesses. This will determine if they are capable of taking opportunities while avoiding threats. Companies must always be prepared to adapt their internal strategies to best fit their external operating environment. This ...view middle of the document...
They have many stores worldwide and that gives them bargaining power with their suppliers. Walmart internal environment focuses on employee knowledge and training. The leadership is committed to providing effective operations. Customer needs are of top priority to the company and everybody works to exceed customer expectations. The external environment consists of technological, legal, social, economic and political factors. The company makes use of the latest technology to produce the best products. Walmart abides by local laws of the countries where it operates.
Target's best competitive advantage is that their products are more upscale and trend forward. Their goods are higher priced than the stores in their industry, but they are still reasonably priced. “Target is focusing on strengthening its position in regions where it generates strong sales. The expansion of its store base facilitates the company to effectively penetrate into its target markets and gain a competitive advantage over its competitors.”(“Target’s Strategic Initiatives”, 2013). They are also looking to expand more internationally. Target has implemented a policy to match competitor’s pricing that are being offered online. They are also involved in product development program. Target’s environmental environment is very competitive. Due to the economic recession consumers became conscious and they decided to re-evaluate their entire company. Target’s external environment consists of technological, economic, social, and political factors. Target use software and technology for faster production. The retail industry has an adverse effect on them which gets them higher costs and expenses due to changes in regulations. Target’s economic factor includes the increases in price of fuel and that has a significant impact on margins and it forces the company to find ways to reduce the cost of delivery by fleet. Social factors include cheap labor that is employed by Target rather than American workers. The wage of these cheap laborers is much less than locals. Also, a large group of their employees are of retiring age. This makes it difficult to find replacement staff.
Walmart evaluates its position in the market as compared to competitors by tracing growth capacities. Demand and supply are analyzed for measuring efficiency. Regular assessments are also done to gauge effectiveness of strategic moves. As opposed to Walmart where capacities are evaluated and numbers play an important role, Target measures effectiveness of product development. Customer...