The Challenges: Wal Mart

Question:

How to investigate the challenges and opportunities of Wal-Mart? Explain.

Answer:

In order to investigate the challenges and opportunities of Wal-Mart, both the primary and secondary sources of evidence are utilised to develop an analytical understanding. Considering the nature of the study, the in-depth evaluation is required for developing the useful views and concept associated with the chosen subject. Therefore, the qualitative approach is designed for satisfying the identified requirements for the research (Albert, Werhane, and Rolph 2014). As part of the process, different types of conflicting views and opinions from the variety of sources and scholars from the identified background are considered. The qualitative method suggests focusing on the data for conducting in-depth analysis and interpretation of the events individually. Based on the proposed methodology, the collected data are segregated in two distinct divisions as stated earlier. In case of the primary data, various feedbacks are collected through the active interviews and observations by involving the effective engagement of the chosen participants (Rivoli 2014). On the other hand, multiple scholarly sources and information obtained from the newspapers and magazines will be treated as the secondary evidence for ensuring the establishment of relevant and valid understanding.

Research of Issue – Analysis and Evaluation

The global business operations of Wal-Mart are required to comply with the guidelines, as mentioned by the competition commissions of various countries. The involving regulations are responsible to ensure the maintenance of fairness within the practices adopted by the companies for dealing with the competition. Therefore, the application of such legislation ensures the various practices developed by Wal-Mart would not negatively affect other retailers competing in the respective industry (Auld and Cashore 2013). Apart from that, the introduction to the competition commission is based on focusing the maintenance of public interest in the appropriate manner. This particular approach by the commission possibly helps to reduce the detrimental effects to the broader society by the application of any kind of merger or acquisition. For an example, the competition law of South Africa can be discussed to determine its particular impact to the operations carried out of Wal-Mart within the country. The competition law of South Africa is one of the most progressive components as part of the global competitive legislation (Scherer, Palazzo, and Seidl 2013). The identified law states the approval of mergers or acquisitions are done by considering the losers and winners of globalisation and determining the adverse effects of such corporate consolidation.

On the other hand, Wal-Mart faces multiple issues caused by the different actions embraced by the trade unions of different countries. It is observed that the trade unions from both the local and international levels critically oppose to the different merger events between two companies by claiming the scenario against the public interest. In this case, the result of the findings suggests about the significant involvement of the competition commission in such scenarios, where it uses to impose multiple conditions to the overall process (Costello and Costello 2014). It can be critically ascertained that the competition commission never actually restricts or allows a decision taken by the company through considering only the criteria as part of the public interest. 

Based on the result of the interviews carried on by Lewis (2011), it can be understood that the practices of a company cannot become anti-competitive, if such approaches provide adequate focus on the consumers. In the case of Wal-Mart, the certain approach is undertaken, as the products and services offered by the company are highly customer-centric. Because of the process, the consumers are able to get the products at the lower prices whilst the suitable competitive environment can be developed for the other retailers (Calton 2013). In this certain scenario, Wal-Mart faces with a critical issue related to gaining the confidence of the investors from the international level. There are different countries from the global environment, which lapse time for making proper decision regarding allowing Wal-Mart to enter into their retail market. This particular process seriously provides detrimental impact to the future decision-making and investment segment of the company. Therefore, the company and the other parties associated with the framework are needed to rely mostly on the negotiations.

Based on the particular understanding, it is quite clear that the international investors are required to make their decision by developing a proper sense about the beneficiary elements regarding the public interest as well as the negotiations with the trade unions (Matusitz 2013). Every company has its major issues, which require proper resolution essentially before engaging in certain practices. The decision made by Wal-Mart to form a merger with an identified company would requires them to resolve the issues between the two companies comprehensively. Apparently, the company faces the global issues from the number of demands raised by the trade unions and the process of signing the binding agreement.

Apart from these identified issues, the result of the interviews and surveys conducted as part of collecting the primary data reveals that the domestic as well as international operations of Wal-Mart are struggling at the same time. The particular challenges in terms of the operational performance are experienced by Wal-Mart for the past one-year (Kothari, Ramanna, and Skinner 2015). Based on the various news articles and information obtained from the business magazines, it is confirmed that the international revenue of Wal-Mart is highly affected caused by the weakness of the company’s performance in Mexico, China, and Brazil. Based on the estimation, it can be determined that the company had only accumulated a mere 1% growth in terms of its revenue in 2013. As determined from the interviews with some of the store managers of Wal-Mart, the firm operates approximately 2300 stores throughout the different regions of Mexico (Yoffie and Cusumano 2015). This particular fact leads to the understanding that Mexico is one of the biggest operating market of Wal-Mart and the downgrading result of its performance has created a major concern for the retailer. Apart from that, it is also noticed that the long-term growth perspective of Wal-Mart largely depends on the development of the business operations into the markets of China. With reference to the current situation, the individual operation of Wal-Mart within the Chinese market does not contribute significantly to the overall revenue achieved by Wal-Mart. From the identification of the highlighted fact, it can be understood that the markets associated with China and Mexico are the two amongst the other major issues of Wal-Mart requiring the company to provide top priority.

The operations of Wal-Mart experiences dismal sales from the major markets across the world including the Mexican market (Khandelwal 2014). From the result of the investigation, such a weak performance of the company is primarily caused by the recent economic slowdown hampering the sales and revenue of the retail operations. However, the company faces deeper problems from some of the global markets as part of the firm’s business operations. The similar kind of example can be observed from the business conducted by the company in the Chinese market. From the statistical overview collected from the Forbes business magazine, it can be notified that Wal-Mart has only able to grow 405 stores in the Chinese market from its operational involvement over 18 years (Windsor 2013). In order to investigate the reason behind such feeble performance, it is observed that the consumer behaviour of the particular country is mostly responsible. More clearly, the strategies adopted by Wal-Mart is price driven and the buying behaviour of the Chinese customers are not driven by the product prices. Therefore, such a factor creates a major issue for the retailer to understand the buying patter of the customers from the specific region.

Conclusion and Recommendation

From the overall understanding developed from the analytical approaches, it can be stated that a neo-liberal globalisation is represented by Wal-Mart because of the global presence of the firm. Due to the strategic objective of Wal-Mart stating it to conquer new markets and generating huge profit, the organization strives to improve its efforts to ensure the proper expansion of the business is put forwarded. Additionally, it is also a major fact that globalisation engulfed the business world like a storm, where the businesses are continuously required to adopt to the changing requirements from the new norms introduced by the factor. Due to the constantly changing trends, the customer behaviours as well as the legislative necessities modifying rapidly. Such reason are significant enough to cause the emergence of critical issues for Wal-Mart, as discussed within the analytical section.

Based on the concluding ideas generated out of the research, Wal-Mart is required to undertake an appropriate inventory management process (Tian and Slocum 2016). It will make sure the company is gaining access to the foreign markets by understanding the tastes and cultures of the associated consumers. 

References

Albert, P.J., Werhane, P. and Rolph, T., 2014. Global Corporations and Supply Chain Management. In Global Poverty Alleviation: A Case Book (pp. 321-348). Springer Netherlands.

Auld, G. and Cashore, B., 2013. Mixed Signals: NGO Campaigns and Non-state Market Driven (NSMD) Governance in an Export-Oriented Country.Canadian Public Policy, 39(Supplement 2), pp.S143-S156.

Calton, J.M., 2013, October. A De-Centered Stakeholder Network Path to Creating Mutual Value: Is Wal-Mart Showing the Way?. In Proceedings of the International Association for Business and Society (Vol. 24, pp. 200-207).

Costello, T.G. and Costello, A.O., 2014. Globalization and the United States: Dynamics, Results, and Challenges-Empirical Evidence. Journal of Business and Behavior Sciences, 26(3), p.21.

Khandelwal, R., 2014. Case Analysis Report:“Wal-Mart’s Rising Sun? A Case on Wal-Mart’s Entry into Japan”.

Kothari, S.P., Ramanna, K. and Skinner, D.J., 2015. Political Standards: Corporate Interest, Ideology, and Leadership in the Shaping of Accounting Rules for the Market Economy. Journal of Accounting & Economics, 45(20), pp.2-3.

Matusitz, J., 2013. Bharti-Wal-Mart: A Glocalization Experience. Journal of Asian and African Studies, p.0021909613512948.

Rivoli, P., 2014. The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade. New Preface and Epilogue with Updates on Economic Issues and Main Characters. John Wiley & Sons.

Scherer, A.G., Palazzo, G. and Seidl, D., 2013. Managing legitimacy in complex and heterogeneous environments: Sustainable development in a globalized world. Journal of Management Studies, 50(2), pp.259-284.

Tian, X. and Slocum, J.W., 2016. Managing corporate social responsibility in China. Organizational Dynamics, 45(1), pp.39-46.

Windsor, D., 2013. 11. Impact of the geopolitical distribution of corruption and crime on the global corporation. Handbook on the Geopolitics of Business, p.151.

Yoffie, D.B. and Cusumano, M.A., 2015. Strategy Rules: Five Timeless Lessons from Bill Gates, Andy Grove, and Steve Jobs. HarperBusiness.