Political Factors
The interference of the government can significantly affect the development of any enterprise. Wall-Mart Inc. is not an exception to this rule. In particular, the adoption of the Maryland Bill in 2006 compelled the company to spend 8 percent of its payroll on the health care of its employees (Cameriousn & Hunger, 2006). Although this legislative act was intended for all firms which had more than 100.000 workers, it is usually called the “Wall-Mart Bill”. Hypothetical impacts were two-fold. On the one hand, the company had to increase its operating expenses. On the other hand, this bill confirmed the belief that the management of Wall-Mart had been pursuing unethical policies in order to boost its profits. In the long term, this may trigger boycotting of Wall-Mart hypermarkets and a decrease in sales rates. This example shows how a single legislative act can give rise to multiple consequences, social and economic.
Economic Factors
The reduction of the stock price in 2002 immensely diminished the flow of investments into Wall-Mart, approximately at 9,9 percent (Cameriousn & Hunger, 2006). This subsequently hindered the pace of growth. Therefore, the situation forced the management of Wall-Mart to redevelop its infrastructure. Instead of traditional discount stores, Wall-Mart opened many Wall-Mart Supercenters in mid-sized American cities. The management of this company chose to act in this way because such supercenters could offer a wider range of products.
Socio-cultural Factors
Wall-Mart has faced criticism due to its practices of hiring illegal immigrants. On the one hand, the disclosure of this information in an $ 11million fine, which the company had to pay in 2003 (Cameriousn & Hunger, 2006). It is quite possible to say that Wall-Mart could afford this price. But at the same time, this news sparked off a series of public protests. American citizens were outraged by the fact that the firm could openly violate existing labor legislation. Furthermore, many of them decided to go to other retailers. To some extent, public resentment changed the functioning of the company because the management began to conduct strict monitoring of recruiting and hiring practices in supermarkets. Furthermore, the company was accused of discrimination against women and ethnic minorities. Certainly, Wal-Mart tried to respond to these accusations by issuing a report, which stated that 32 percent of their employees belonged to ethnic or racial minorities (Cameriousn & Hunger, 2006). Thus, socio-cultural factors transformed the firms accountability standards.
Technological Factors
The development of internet technologies and especially the internet has intensified the competition among US retailers. Many companies can sell their products through WWW without having to possess a physical outlet. In this case, we need to speak about such online retailers as Amazon or eBay (Warner & Buchman 2004, p 455). Wall-Mart also tries to posit itself as an e-commerce business but at the moment, they are far from achieving leadership in this area. Yet, it should be pointed out that, unlike Amazon or eBay, Wall-Mart does not have to incur enormous shipping expenses. Naturally, Wall-Mart also conducts online commerce through its website but at this point, it is not their major priority.
Conclusion
On the whole, the analysis indicated that the development of Wall-Mart Inc is hindered most by political and socio-cultural factors. The companys relations with the public still leave much to be desired. It has turned into a symbol of corporate power in the United States, and the company has to respond to various accusations that can be both fair and unfair. In sharp, the company timely addresses economic and technological risks.
References
Camerious J.W. & Hunger J.D. 2006. Wall-Mart Stores: Inc: Under attack. “Cases in strategic management and business policy” edited by Hunger J.D. New York: Prentice Hall.
Warner. C and Buchman J. 2004. Media selling: broadcast, cable, print and interactive. New York: Wiley-Blackwell.