1.

External Factors
 A common tool to analyze the external environment of the organization is PEST Analysis which helps to
identify the size of business, its position in the market, economy and its growth along with the
development or decline trend of the market.

2.1.1 Political Factor

Wal-Mart is one of the businesses in which the political factor has played the major role
while considering the overall management of the company. As political contribution of
the Wal-Mart has increased enormously and they have contributed alot just to
safeguard their political interests for the betterment and development of the company.
According to a report Wal-Mart has spent millions of dollars on state level and local
projects and more than $17 M in federal elections. 69% of which accounted for $11.6 M
of Walton family and rest out of Wal-Mart’s contribution has gone to Republican
candidates and committees in the elections. One of Wal-Mart members reported that
Walton family being one of the richest families in the world their priority is to spend
millions of dollars on their radical ideology instead of spending that amount to increase
the wages of its employees and to increase their motivation level. However too much
political factor can affect the sales and profit of Wal-Mart in a negative way as with the
changing government their comes the changes in the rules and regulations of the
taxation system which can directly influence Wal-Mart. For e.g in February 2013 the
sale of Wal-Mart was lower than the expected due to delay in income tax refunds. Apart
from political factor there are many other external factors which can influence the sales
of Wal-Mart such as authority to work at a certain place, health related issues, war
against terrorism and geopolitical uncertainty. To increase the company's overall profit
margin and to decrease working expenditure Wal-Mart has expand its business to other
countries as well such as Canada, Mexico, Germany, China, India and UK. However if
those countries face any kind of political instability that will directly affect Wal-Mart and
their market share will be reduced.

2.1.2. Economic Factor

World's economic conditions influence the purchase power if the economic condition is
good and shows positive impact the purchase power will increase. Just is the case with
Wal-Mart, as the management of Wal-Mart believes that the world's economic condition
might domestically and internationally affect the financial performance in a unfavorable
way. Economic factors such as higher fuel prices, inflation, high energy cost, higher
interest rate, unemployment rate, and higher debt could affect the demand for the
products and services selling through Walmart stores. Apart from that factor such as
high transportation cost, exchange rate fluctuation and other related factors can raise
the cost of general and administrative expenses and the operations of Wal-Mart can be
harmfully affected from it. That is why Wal-Mart has implemented the expansion
strategy and they are increasing the number of stores inside and outside US to increase
their sales and to get high returns so that their capital assets can be leveraged.

2.1.3. Social Factor

Social factors are things which are considered to be have an impact on the lifestyle of a
person. These factors play a vital role in making the customers mind about the thing.
Which helps in buying decision of a product or service. That is why Wal-Mart has
always emphasized a lot on this and that is one of the reasons for the success of this
business. As Wal-Mart has created a perception in the minds of their customers that
Wal-Mart is the one stop shopping solution to cater their needs.

 Technological/Innovation Factor 
Technological factors have always played a pivotal role in the success of any
organization and Wal-Mart has placed itself as a technology oriented company and has
opted for the new technology and changes available in the market. In 1987 Wal-Mart
had launched its 1st satellite network which connected the home office to every single
Wal-Mart store and clubs via video, data and voice communication. The supply chain
system and logistics management of Wal-Mart keeps it ahead of their competitors and
the use of modern technology in their business system had put Wal-Mart way ahead of
their competitors

Internal Analysis

SWOT Analysis
SWOT Analysis helps to evaluate the organizations strengths, its weaknesses the
possible opportunities and potential threats the organization can face. SWOT Analysis
of Wal-Mart can help to evaluate its market position through its strong operating
performance. Also it will help to identify its strength and opportunities which will lead to
customers confidence in the company. However in case of extreme competition which
will impose a serious threat to the company can affect its margin.

Strengths
1.Scale of operations
A prominent market position in the market serves as a strength of Wal-Mart as with the
revenue of more than $400 billion and almost 11,000 stores all around put Wal-Mart
way ahead of their competitors.
2.Competence in information systems
A strong supply chain system and logistics management gives Wal-Mart an edge over
its competitor as with an effective information system Wal-Mart not only save a huge
cost but also keeps its operations smooth with timely information readily available.
3.Wide range of products
With a massive amount of products available for the customers, Wal-Mart makes sure
to cater the maximum amount of people's need and to keep its sales level as high as
possible.
4.Cost leadership strategy
Wal-Mart's low price product strategy makes its position very strong in the market as
with everyday low price strategy Wal-Mart is able to grab a large chunk of market share.
5.International Operations
Wal-Mart's presence in international markets puts it ahead of its competition as not Wal-
Mart is able to grab a large market share domestically but with international presence as
well it puts Wal-Mart in a very strong financial position.

Weakness
1.Labor related lawsuits
A lack of better work environment has always caused Wal-Mart's corporate goodwill to
suffer as Wal-Mart has thrived to provide a better work conditions to its employee.
Voluntary overtime work and gender discrimination are some of the common examples
of which the organization has always criticized for thus resulting in paying a hefty
amount of dollars in penalties and other lawsuits.
2.High Turnover
A high turnover is also a weakness of Wal-Mart as the organization has thrived to lower
the ratio of turnover but failed to do so and of the major contributing factor in this regard
is the low wages being offered to employees.
3.Neagative Publicity
As a public image of an organization matters alot and unfortunately Wal-Mart has failed
to create a better image of its organization which is due to its poor work conditions and
management of employees resulting in damaging the brand image of the organization

Opportunities
1.Retail market growth in emerging markets
With a strong financial position Wal-Mart has an excellent opportunity to grow its
business even further to the emerging markets and increase its market share.
2.Rising acceptance of own label products
Wal-Mart offer its own private label products at its stores and the profit of those products
have increased significantly which can serve as an opportunity for the organization to
earn higher profits.
3.Online shopping growth
With an increasing trend of online shopping Wal-Mart has a great opportunity to expand
its profit margin even more by increasing its e-commerce operations.

Threats
1.Increasing competition from competitors
With an intense competition in the retails business market Wal-Mart market share can
be reduced as some of the major players in this field like Best Buy, Target, Amazon can
impose a serious threat to Wal-Mart market share.
1.Increasing resistance from local communities
A market analysis report says that when Wal-Mart opens its store in a particular area
then the local stores already operating in the vicinity are forced to close their business
as they can't compete with the retail giant like Wal-Mart due to which resistance has
been increased by local communities and retailers due to which it can be difficult for
Wal-Mart to enter in such communities.
Rising commodity product prices
With the rise of manufacturing cost the prices of the products are increased by Wal-Mart
which serves as a threat as with a increase in price the profit margins will reduce when
there will be a decrease in the sales.