Keeping the case of retail industry into consideration, the political turmoil can result in slowdown of the organizations operating in this sector. Even in the retail sector business need to focus upon waste management, energy consumption, packaging as well as several other related areas. Packaging , waste reduction, renewable energy and several other concerns related to sustainability are there before the retail sector. Increasing competition from brick and mortar and online competitors 2. However, regions that have political uncertainty create a business environment that offers slower growth prospects to retailers such as Wal-Mart Motsoeneng, 2015. What laws are being drafted? However in case of Wal-Mart, the company has been able to use this situation as an opportunity.
Now they have more dispensable income to spend on various items. Unmanageable product range: Since Wal-Mart sell products across many sectors such as clothing, food, or stationary , it may not have the flexibility of some of its more focused competitors Böhm 2009. Legal Wal-Mart is up against 38 federal and state lawsuits filed workerss in 30 states. Social Factors The social factors that seem to affect the retail industry are the spending habits of the people which are influenced due to the economic conditions present in a country. The central part of its general strategy is to keep costs low, which it achieves by higher volumes and keeping level of inventory low.
By expanding on the store, the offerings, and shipping, they could spread their wings worldwide, similarly to Amazon. Currently economic growth of Australia is 3 % which up by 0. According to the degree of support through subsidies, a country can be more or less attractive for a company. Currently company is looking India, China and Australia as a potential market for its business development. Weaknesses and threats should be secondary priorities for Walmart. This can affect the tax policies, labour laws and whether certain goods can be provided within the country. There were dictated shopping hours for large retailers and antitrust and un fair.
This strategic group also has different set of competitive forces than the rest of the retail industry Hill and Jones 2007. Economic Factors: The purchasing power of customers in the United States is quite substantial, which is a good sign for the business of Wal-Mart in the United States. An opportunity available to the industry is the free trade zone. Social: Social forces are a very important factor that have an influence on the profitability of international businesses. Eruption of quality-related or ethics-related scandals 3. For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands.
Journal of International Management, p. As such, it is used by business leaders worldwide to build their vision of the future. Along with a high level of brand value as discussed above, Walmart brand image has been damaged due to a series of scandals. For the big International retailers it can be quite difficult to expand into the Asian countries. Did you buy assignment and from our experts in a very affordable price.
There are so many laws related to business and employment that affect it. Along with that, the company has managed to participate in activities pertaining to preserving wildlife. In the recent years, Walmart has focused on making work conditions better for its staff. The efficient supply and distribution network of Wal-Mart is a result of strategic relationships with suppliers and implementation of high end information technology tools. Economic slowdown had stalled the growth of the retail sector.
Wal — Mart has a big opportunity to expand its business all over the Australia. They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions. The political environment of every nation and market affects several things. Wal-Mart managed its own logistics by using a central spoke and hub system of distribution and warehouse centers. Wide range of products 4. In contrast, Walmart was planning to open 270 to 300 smaller stores in the same time frame.
All these forces are important and need to be kept in mind from the point of view of strategy formulation to be successful. Legal: The legal factors are also just as important for the retail sector. Online Shopping growth Threats 1. · Walmart has strength across its entire operation rather than just relying on U. Likewise, gender and age of an individual is not supposed to be used as means of hiring criterion as it can lead to legal issues and problems for an organization.
Bu using its bargaining influence, it cuts down the products costs to attract as many customers as possible. The company specialises in food and non-food items offered at significantly lower prices than the competition with an extreme variety of goods located in large stores and through its online store. Its sales are approximately four times the sales of Kmart. Walmart has been aggressively promoting its online retail operations in recent years as well. Not to mention people are likely to support smaller grocery store chains over Walmart.
Political and legal forces, Economic forces, Sociocultural forces, and Technological forces. Additionally, the stores themselves have issues. Failure to sustain cost advantage 2. Because of the Internet, small sellers or individuals can bypass Walmart and use their own websites to sell products to online consumers. The reason for such low operating costs lies in its high quality and efficient distribution network. It has influenced the global community at large and will keep on doing so in future. Also, the human resources situation in the organization presents issues that are actually opportunities for the firm to improve.