The aims of this essay are analysing external environmental factors of Wal-Mart supermarket via Porter’s five forces model and using the results to give some accommodation and my personal suggestion for company’s future strategy. In 1962, the first discount store of Wal-Mart was founded by Sam Walton in America. Currently, it is the largest retailer and the third largest public company in the world. (Fortune Global 500, 2012). Wal-Mart Stores, Inc. has become an international company from 1991 when Sam’ Club opened in Mexico. After 20 years expanding, Wal-Mart has 5651 stores and approximately 780,000 employees in 26 countries outside the United States. Many international stores are under different names, such as Asda in UK and Walmax in Mexico. (Wal-Mart. com, 2012). The reason for my choice is that Wal-Mart is a typical successful multinational retailer which owns a comparatively perfect international strategy in such a fierce competition industry. This essay will be including three sections: Literature review and methodology; findings and discussion and recommendations.
Literature review and methodology
“Michael Porter contends that five forces of competition must be accounted for when devising strategies to obtain competitive advantages.” This model is for analysing the external environment of firms. (Gates, 2011 cited in Porter, 1980; 1985; Grant, 2010). Porter believed that his model can help managers to understand competitive forces and underlying the cause of an industry’s profitability. Meanwhile, this model provided can be a framework for anticipating and impact competition or profitability. “A healthy industry structure should be as much a competitive concern to strategists as their company’s owns position” Said by Porter. Also, a good understanding of the industry structure will affect organization’s strategy practice. (Porter, 2008). Mahon and McGowan(1998)claims that Porter’s model...