Each day there are new businesses that pop up in our cities every day, but it’s not every day that one of those businesses turns into a huge corporation or is able to add a sister company in a another city. For the ones that do make it big to have multiple stores across the world leave it to each person’s imagination on how they were able to be so successful, but to the people in the business world it is know that those companies had a strategic plan and strategy that was followed for the company to be so successful. Walmart which runs as a cost leadership strategy and Home Depot which runs as a service focused strategy are two very good examples of companies that have made it big and are their strategies are easily visible and explained. Walmart seems like an everyday trip to some families around the world because it has become so big that everyone has someone in their family that dreads hearing the famous phrase “We need to go to Walmart today” in their home. Walmart is a cost leadership strategy because they are the lowest cost producer that can sell at or below industry prices and by doing this they gain a bigger market share. This gives Walmart the competitive advantage in many different areas of the market and helps to control pricing.When we look at Walmart’s internal environment we look at their strengths which include the consumer’s knowledge and understanding of low prices, their market clout, their competence in information technology, and their wide range of stores across the world. Customers know that by going to Walmart is going to save them money because of the slogan of Walmart itself: “Save money. Live better”. What actually happens to most people is they go in the store and come out spending much more than they went in expecting to spend because of all the deals that were found while shopping. Walmart has become one the biggest corporations around today with that being said they are able to buy products at lower costs because of the way that they can purchase items in bulk where as other competitors cannot keep up and get those lower prices and must charge more for the same product. This also allows Walmart to be able to use technology to keep up with pricing around the world so that they can make sure that they are always offering the best price for their products so they can keep the consumers coming back. Walmart didn’t get to be so big overnight, and are rapidly adding new stores across the country so that they can provide their products and services to consumers all over the world. As far as the external environment of Walmart they are on top of trying to save and recycle. They want to show that even as big of a company that they are that they too can reduce their carbon footprint. According to "Environmental Sustainability" (2014) Walmart has three goals that they are working as part of their strategy and that is to be supplied 100% by renewable energy, to create zero waste, and to sell products that sustain people and the environment. Walmart makes it look easy to keep a business running growing because we cannot see what goes on behind closed doors, but what can be concluded is that by Walmart choosing the cost leadership strategy approach is clearing working out for them in the favor of making the stakeholders money and expanding the company on a regular basis. Home Depot is a great company if you like everyone else in the world is trying to save money but has work that needs to be done to your home or if the house just needs to feel a little newer and you want to try the do it yourself ideas that you saw on television or posted on YouTube. By being a cost leadership strategy as well Home Depot is able to lower its cost structure and improve operating performance. Everyone knows that if you lower prices you will get more people to buy. Using this strategy Home Depot has been able to get a larger consumer base because the lower prices did just what it was supposed to do and attracted many new loyal customers who are able to do more around their home on their own rather than hiring someone to do the work for double the price. Home Depot looks at things a little different than Walmart as far as internal environment. Tangible and intangible resources seem to be a factor for this corporation. Home Depot has plenty of money as it is a multi-billion dollar company it has enough resources that it could take chance and invest into different opportunities that could make the company even bigger and better. Intangible resources are quite a few for the company. Human resources must be a busy place for this company since they promote within the company first so that all the employees have a good knowledge base of all the products that the company offers so the further up the ladder you go the more the person should know. Which means that the turnover rate should be in a good range since the employees must go through vigorous training to know about all the products and services. The most intangible resource that Home depot can have is their loyal customers that come back for the next home project or leak that they may have to deal with in their home. Home Depot has a few things that effect their external environment such as the threat of new entrants, bargaining power of consumers and threat of substitutes. Everyone things they can make a “do-it-yourself” video now since there is YouTube and it gives people idea’s that they can do things better than what is already out there. Corporations like Home Depot have to make sure to stay on their toes because there are companies that pop up every day that threaten their business and if they are not on top of what these new companies are doing they could very well take their loyal customers that they have and steal business from them. With the option to “price-match” consumers are getting smarter about their purchases. By using the internet to search other company’s prices consumers can choose to still buy your product because of the quality and their loyalty or can choose to go somewhere else to save a few bucks. That also runs into substitutes while looking online consumers will come across the “same” product but a different brand at a cheaper price which could possibly start to put a hurting on a certain product for a while before it is caught and the pricing is fixed. Home Depot makes sure that they stay consumer based so they are as loyal to their customers as the customers are to them, and by doing so is able to stay on top of the competition and run a huge business and is rapidly expanding. These big companies have found a strategy that works for the at the present time and they are taking no time to run with it and expand their customer base and business while making sure to keep working with their teams to and continue to run environmental scans so that they are able to stop and fix any problems that have arisen or that could pop up and keep them from advancing their corporation to the next level.

References

Defoe, D. (2014). The Home Depot Inc.: A Home Improvement Retailing Business, Industry, and Economic Trends Analysis. Retrieved from http://The-Home-Depot-Inc-A-Business-and-Industry-Analysis
Environmental Sustainability. (2014). Retrieved from http://corporate.walmart.com/global-responsibility/environmental-sustainability
Nayana, N. (2013). Copy of Home Depot: Case Analysis. Retrieved from http://prezi.com/m38u1dio4exq/copy-of-home-depot-case-analysis/