How does the chapter illustrate the concept of external fit using Walmart and Apple?

The chapter uses Walmart as a negative example of external fit because its strategy ignored German customers' shopping habits and the intense competition from established local discount chains, ultimately forcing it to exit Germany. It uses Apple as a positive example: Apple secured preferred or exclusive semiconductor delivery contracts ahead of supply shocks, illustrating how aligning strategy with supplier relationships and resource access supports external fit.

External fit belongs to the second layer of strategic fit, requiring a strategy to reflect real-world conditions in the firm's external environment. For industry stakeholders, this means considering actual customer needs, likely competitor actions, available suppliers, and trustworthy partners. Walmart failed this test in Germany: it did not sufficiently consider that German customers were not receptive to the American-style shopping experience, and it underestimated competitors with highly efficient supply chains. Apple, by contrast, illustrates successful external fit. During the COVID-19 pandemic, when many firms struggled with semiconductor chip shortages, Apple tried to secure preferred or exclusive delivery contracts in advance, giving it priority status over other firms when supply shocks occurred. These two examples show how aligning a strategy with external conditions, such as customer preferences and supplier availability, can determine whether the strategy succeeds.