Wal-Mart is one of the largest grocery chain and retailer in America. The chains range in size from 100,000 square feet to 261,000 square feet (“Wal-Mart Case Study,” n.d.). This giant retailer goes into variety of markets like grocery, diversification of products, and even services. It offers lower prices as possible across its business segment. These make Wal-Mart become the dominant retailer stores in America. And fits their motto perfectly, “Save money, Live better”.
Wal-Mart as the largest supercentre in America brings impact and influence by the marketing environment. Marketing environment is external forces in which the company operates. Generally, these forces consist of competitive forces, economic forces, political and legal forces, technological forces, and sociocultural forces.
The components of the local marketing environment are impacted by the presence of Wal-Mart supercenter. Wal-Mart brings competitive forces to the competitors. Target Corp., Costco, and Kmart are direct competitors of Wal-Mart. Their indirect competitors are Toy “R” Us, mom and pop shops, grocery stores, stand stores, etc. These corporations and stores direct or indirectly will be threaten by Wal-Mart’s presence. Wal-Mart offering a lower price that benefits the customers by largely importing merchandise from China, those stores that unable to compete the prices and come with strong presence will be suffer loses. In another angle, price competition between companies is benefitting the customers.
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Besides, the competitive forces, Wal-Mart also impact the economic forces. In a long run, Wal-Mart decreases employment rates. In the beginning, the presence of Wal-Mart opens job opportunities for the local communities and it creates many other jobs indirectly like shipments. However, according to Basker (2004, p.14), within 5 years, 100 jobs that are created in Wal-Mart, this number is cut into half. This could happen probably due to those retailers cutting down their work as customers are now preferred to shop at Wal-Mart. In addition, Basker (2004, p15) found that the presence of Wal-Mart in a county within 5 years, reduces the number of smaller retailer. Despite the negative effect to employment rates, the presence of Wal-Mart boost up country’s economic as it pays a large amount in taxes.
Political and legal forces are impacted by the existence of a new Wal-Mart supercenter. Wal-Mart as one of the largest retailer in America, undoubtedly they will play role in today politic and involves with regulations. Wal-Mart influences the politic. For example Wal-Mart has donated $108,500 to federal candidates and parties in the 2010 election cycle, mostly to Democrats, according to the Center for Responsive Politics (cited in Vaida, 2009, July 13). In addition, Wal-Mart has ever entailed in cases, one of them is employing teens in unsafe conditions, and Officer of Inspector General (OIG) has come to agreement with Wal-Mart about child labour. This case constitutes unexpected of the U.S. Department of Labor to deal with Wal-Mart. It leads U.S Department of Labor to be more vigorous and vigilant in implement their state child protection law (“Issues/Political Influence,” n.d.). Wal-Mart’s case made the U.S Department of Labor to pay more attention on child protection law yet this case slightly damage Wal-Mart’s positive image.
A presence of new Wal-Mart also impacts the technological forces. Wal-Mart is the first company that realise the importance of bar coding (Warsh, 2006, December 3). It has started to install the bar codes reader in all its chains by the late 1980s. Until now, they are still using it and since that every influential company like Sear Holdings is also using it. Wal-Mart influences their competitors in technology. And until now, Wal-Mart is the leader in radio frequency identification tags.
Wal-Mart impacts the sociocultural forces. The founder of Wal-Mart, Sam Walton, has been donated at least $ 701 million to education charities since 1998 for education reform (“Issues/Political Influence,” n.d.). Regardless of reasons behind the act, it increases the positive image of Wal-Mart and adding education value to society.
Besides the local marketing environment are impacted by the presence of a new Wal-Mart supercenter, components of marketing environment impact how Wal-Mart operates in the local area when they open up a new Wal-Mart supercenter.
When a new Wal-Mart supercenter is opened, Wal-Mart has established a set of competitors. This is one of the impacts of marketing environment which is known as competitive forces. The competitors can be a direct or indirect one. Competitors usually will snatch away the customers. To be able to compete with the competitors, Wal-Mart has to come up with innovative marketing strategy.
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Economic forces impact how Wal-Mart operates in a county. Economics are on the recovery stage. Hence, it means that total disposable income and willingness to buy increases. Even though the income increases, it is still unstable in work. So, people might choose to shop at Wal-Mart which offering a lower price because of unstable work or even income causing them to scale down on venue.
Political and regulatory forces impact how Wal-Mart operates in a county. Wal-Mart has received several complaints regarding the labouring such as allowed child to work in unsafe area, didn’t pay extra wages for extra work, etc. So, since the establishment of Wal-Mart, it has received a number of lawsuits and mediation either form the competitors, precompetitive legislation (U.S Department of Labor), or from the customers.
Technological forces impact how Wal-Mart operates in a county. People are now high demand on everything that requires fast and advanced technology. Therefore, Wal-Mart is now expanding their services to internet system. This can help Wal-Mart to serve large scale of customers and grow even larger in another sector that was previously not focused on.
Sociocultural forces impact how Wal-Mart operates in a county. Now, aging of population is increased. People are living longer. Hence, it means the customer of Wal-Mart is getting older. Wal-Mart will have to change their products and services in stores to accommodate this growing issue. Cultural forces also impact Wal-Mart’s operating in a county. For example back in 2003, Wal-Mart refused to continue selling three men’s magazines, citing customer preferences, and ordered several womenHYPERLINK “http://encyclopedia.thefreedictionary.com/women’s+magazines”‘HYPERLINK “http://encyclopedia.thefreedictionary.com/women’s+magazines”sHYPERLINK “http://encyclopedia.thefreedictionary.com/women’s+magazines” HYPERLINK “http://encyclopedia.thefreedictionary.com/women’s+magazines”magazines covered up at the checkout aisle, based on worries that their headlines were offensive. Such moves have get critics decrying Wal-Mart for interfering with free speech (“Wal-Mart Nation?” n.d.).
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