In question #1 we analyse the three major areas of the external environment: general environment; industry environment; and competitor environment. We then summarise the main opportunities and threats.
Factors in the general environment include: demographic, economic, sociocultural, global, technological, and political/legal factors.
The industry environment tools include: industry definition, industry life cycle, and Porter's five forces. The competitor environment can be analysed by the framework explained in chapter 2; comparison of critical success factors; and market commonality or resource similarity.
A framework of competitor analysis takes into consideration the high or low level of market commonality, simultaneously with the high or low level of resource similarity. The portfolio of resources of two different firms are examined to find the degree of market commonality and resource similarity, and this is displayed graphically as shaded area.
In question #2 we analyse the internal environment, which consists of: tangible resources, intangible resources, capabilities, core competencies, competitive advantage, and value chain analysis. We then summarise the main strengths and weaknesses that we have identified from the analysis of the internal environment.
Question #2 is answered using the case study and tools such as SWOT matrix/SWOT analysis, Ansoff's matrix, Grand Strategy matrix, etc. These tools are used to identify strategic options available to Wal-Mart. We then critically assess these strategic options.
The components of internal analysis leading to competitive advantage and strategic competitiveness include the inter ...