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Unformatted text preview: Company Background Analysis: When it comes to strategic management, it is crucial that you analyze the industry as a whole by examining it internally and externally. We have already come to understand that the first component of strategic management involves coming up with a mission statement which allows us to organize and structure a companys motives based on a specific goal. The mission statement provides the framework within for which the strategies are being formulated. According to Strategic Management: An Integrated Approach , a mission statement consists of four components which basically describe what the company does: its reason for existence, a statement of desired future state, a statement of key values that the organization is committed to, and a statement of major goals (Hill, 11). Wal-Mart boasts about their mission statement because it is truly something to be proud of. Wal-Marts mission statement is as follows: Saving people money, so they can live better. Wal-Mart has managed to implement their business strategy based on their mission and goals. The company uses a cost leadership strategy to stay ahead of the game and their competitors. The cost leadership strategy demonstrates a company offering the lowest prices for their goods with respect to the discount retail industry. In order to for Wal-Mart to offer these low prices to the public, they must figure out ways to lower their initial costs for the merchandise. Wal-Mart has been successful working directly with manufacturing companies and ordering their goods directly from them. This cuts out the middle-man, distributors, and wholesalers making a profit; therefore, it is Wal-Marts intent to pass on these savings to their customers. Since the birth of Wal-Mart, they have obtained and sustained a bargaining power of their suppliers. Their suppliers continue to offer goods at lower prices due to the quality and style of the good, as well as buying a larger quantity of the goods with a discount. The second component of the strategic management process is an external analysis of a given organizations external operating environment. The purpose of an external analysis is to identify the opportunities and threats based on an organizations strategy to meet its mission. The external analysis requires us to examine three interrelated environments including the industry in which the company operates, the country or national environment, and the broad macro- environment in which it will operate. The third and final component of the strategic planning process is the internal analysis. An internal analysis takes a closer look into what makes up the company based on their distinctive competencies. Analysts and managers are required to differentiate their products or services from those offered by competitors based on the companys resources and capabilities....
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This note was uploaded on 09/08/2010 for the course BUS 189 at San Jose State University .