Environmental Scan Environmental scanning is one function of strategic management of analyzing external factors that can affect an organization. Environmental scanning is to scan the environment to monitor and identify the changes such as new trends that may cause an effect on the organization. In addition, environmental scanning with an internal analysis of the organization strengths, weakness, mission, and vision can assist management to formulate a strategic plan to gain control that may have potentially significant affect. Successful organizations like The Home Depot and Wal-Mart are dependent upon the ability of leaders and employees to adapt to the rapidly transforming external environment (Wheeler & Hunter, 2010). The Home Depot is the world's largest home improvement specialty retailer with more than 2,200 stores in the United States, Puerto Rico, U.S. Virgin Islands, Guam, Canada, Mexico, and China (Annual Report, 2011, p. 7). The retailer sells approximately 40,000 products to consumers and its 321,000 associates are the key to the organization success who deeply believe in the values the organization. Instead of a mission statement, Home Depot has eight corporate values designed to guide the actions of all its employees. According to Home Depot, the corporate values are: “Taking care of our people, giving back to our communities, doing the right thing, excellent customer service, creating shareholders value, building strong relationships, entrepreneurial spirit, and respect for all people.” Home Depot long-term objectives are to maintain constant growth expansion, increase store modernization, increase investment in technology, and sustain control through the organization’s vertical growth strategy (Home Depot, 2011). The organization has taken the initiative in building relationships with do-it-yourself and professional customers and promises to provide the highest quality products and services. The strategy is to enhance the foundation of its retail network though providing consumers with innovative and distinctive products and commits to change with trends of the home improvement market (Annual Report, 2011). To increase growth and expansion, board of directors has set a long-term strategy to expand the organization. The management team leverages innovative products, services, new acquisitions, and maintain competitive advantage (Home Depot, 2011). Because of management vision and leadership, the company remained prosperous during economic distress and crisis through increasing its retail network by providing consumers unique and innovative products, investing in technology, and modernizing stores. The organization made some modification to increase revenues by expanding into new areas, store configuration, installation services, and online sales. Externally Home Depot is creating community awareness and giving back to the communities by giving charitable contributions. The organization has demonstrated its social responsibility by making a difference in the community, which has established its image. Home Depot has sustained its competitive advantage even with the current recession by maintaining sales because consumers are likely to purchase materials at a low price and repair do-it-yourself projects. Presently, Lowes competes with Home Depot on a constant basis and sells similar products and in home and business services that Home Depot offers to consumers and Lowes has also expanded to Canada. Home Depot competes primarily on price, customer service, quality, and store locations. The slow economic housing market has decrease sales; however, home depot still maintains its lead advantage and is constantly increasing earnings. Internally Home Depot has implementation of new information technology, service performance improvement; research and development have tripled from previous years, increased employee wellness and loyalty, and store diversity. Weakness is declining stock price, training employees, warehouse overload that reduces earnings for the corporation. Home Depot measures performance by net sales and operating expenses. Fiscal year 2010 net sales were $68 billion and an increase of 2.8 percent from 2009 fiscal year of $62 billion. In addition, financial performance is measured on stability on the housing, construction, and home improvement segments and also the economic situation. Home Depot relies on information technology to process, analyze, and manage the organization. Home Depot corporate value chain of glassware, plumbing, and house wares represents its product cycle flow makes it possible for Home Depot to eliminate distributors, and thus the organization can offer everyday low prices. Comparable to The Home Depot, Wal-Mart is the world’s largest retailer with more 9,100 stores and clubs and employs 2.1 million employees (Wal-Mart, 2011). Wal-Mart operates domestic and international in various ways and commits to the mission of saving consumers money to live better. Wal-Mart has three business divisions; Wal-Mart United States, Wal-Mart International, and Sam’s Club. Thus Wal-Mart recognizes that one solution cannot meet every culture needs because customers trust local brands for the importance of his or her needs. The organization earns customers trust daily by providing low prices on a large variety of quality products and services; its culture embraces and rewards diversity, mutual respect, and integrity. Wal-Mart strategy is price philosophy, which the organization price items to maintain customers trust with regular promotional activities. Therefore, Wal-Mart remains focus on its successful productivity strategy of buying, operating, and selling for less. In 2010 Wal-Mart achieved a milestone with its dual growth strategy of exceeding net sales of $100 billion dollars and expects a rapid growth through natural growth and acquisitions. According to Wal-Mart, sales in Mexico, China, and Brazil offers significant opportunities for new expansions because management team in each country works strategically to cultivate customer growth using customers’ suggestions and thereby increasing customer growth (Annual Report, 2010). Wal-Mart also works closely with governments of those countries by aligning together to increase jobs and economic growth, thus improving returns. The organization forecasts return improvements are predictable on customer growth rather than acquisitions and leverages efficiency to increase returns by remodeling and creating an efficient and enjoyable shopping atmosphere. Wal-Mart have made the stores more productive through leveraging expenses, eliminated non-value activities, and decreasing inventory. As a result the process has strengthened associates productivity scores. According to Wal-Mart its sustainability as the largest retailer has unparalleled opportunities in reducing environmental affect, protect natural resources, and sell more environmental friendly products by driving product innovation. Wal-Mart social and ethical responsibility is ensuring that products from suppliers are safe and that the quality is customer satisfactory. Responsible sourcing is critical to the organization it reflects values and respect for employees within the supply chain (Annual Report, 2010). The organization and associates are passionate about serving the local communities by volunteering, donating, and responding promptly to areas affected by natural disasters. Wal-Mart’s internal factors for are its high returns on investments, shareholders, employees, and continually investments in technology that drives greater efficiency throughout the organization. Externally Wal-Mart operates in a high competitive retail industry in the United States and internationally and faces strong sales competition from retailers like drug, warehouse clubs, specialty stores, and including Internet retailers. Wal-Mart competes also with many companies for major retail locations and employing and retaining employees. In addition, Wal-Mart faces economic conditions like catastrophe occurrences, cost of goods, consumer preferences, debt, unemployment, labor cost, competitive pressures, and disposable income. However, Wal-Mart focuses on improving shareholder values with its performance metrics through growth sales, increasing operating expenses, and return of investment. Wal-Mart financial objectives are to increase growth by new market entry, opening new store locations, incorporating online channels, creating new innovative plans for consumers to experience the Wal-Mart brand. Wal-Mart management team believes that sharing return of investment with shareholders is meaningful metric that assist the shareholders is accessing how effectively the organization is using its assets. Return on Investment varies as management plans long-term strategy initiatives and possible short-term affects. Fiscal year 2009 and 2010 return on investment was 19.3 percent and sales in 2010 were $405 billion an increase of 1.0% from 2009; Sam’s Club produced 11.5 percent Wal-Mart United States 63.8 percent, and Wal-Mart International 24.7 percent (Annual Report, 2010). Wal-Mart measures its results by measuring each segment operating income and corporate overhead before taxes. The organization believes that this method of measuring operating income is more significant that net sales because it specifies how efficiently Wal-Mart manages cost and control operating expenses. Wal-Mart’s objective is to raise operating expenses on a slower scale than net sales and also measures the United States stores performances by measuring sales growth for a particular period. Wal-Mart has a strong competitive advantage over competitors and will maintain its competitive edge by creating new competitive advances, keeping the commitment of increasing operating expenses, discovering new methods to increase profits from its global capabilities and associates. In addition, wants to continue delivering strong returns to shareholders from its three operating segments.

References The Home Depot (2010). Annual Report 2010. Retrieved from http://www.homedepotar.com/financials.html The Home Depot (2011). Our Company. Retrieved from http://corporate.homedepot.com/wps/portal/!ut/p/c0/04_SB8K8xLLM9MSSzPy8xBz9CP0os3gDdwNHH0sfE3M3AzMPJ8MAV0sDKNAv

yHZUBABGeSMx/ Walmart Stores, (2011). History. Retrieved from http://walmartstores.com/AboutUs/9538.aspx Walmart (2010). Annual Report 2010. Retrieved from http://walmartstores.com/sites/annualreport/2011/default.aspx