Wal-Marts establishment in a new town Pro’s and Con’s from Traders and Residents
Owners of small businesses located nearby
Owners of small business will be against the move of Wal-Mart establishing a branch in the new city; they are likely to give the following reasons to support their stand:
- Unfair competition, small traders will feel that the company has a large capacity that it can sell its products cheaply than the price that small traders can sell their commodities; this is because wal-mart has the capacity and can easily take advantage of economies of scale.
- Small traders are likely to discourage the move quoting that it will have an unlikely loss of business to them and also lack of employment, the company is likely to drive small scale out of business, this will create unemployment in the area. The employees whom the company is likely to employ will not be paid appropriately.
- When the company is established, then it is likely to cause traffic in the city, this leads to increased social costs to the town.
- Small-scale traders are likely to challenge the move since it can lead to brain drain in the city, people will have limited opportunities since the company sells a variety of goods which could otherwise be developed through community innovation (Stevenson, 2009).
Town residents and residents of nearby towns
Residents and neighbors are likely to see them move from a positive side, they are likely to give the following advantages:
- The company will offer a wide range of shopping well as it has a variety of commodities to sell, both the residents and neighbors will enjoy a wide range of choice and increase consumer solemnity.
- the company is likely to sell its commodities cheaply thus residents and neighbors will get a chance to get higher value for money.
- competition in a market leads to better service thus when the company increases competition, then consumers are likely to get better services from the town.
- an increasing population and shoppers in the city will lead to demand for more social investments in the city which is positive for the city.
- both residents and neighbors may be quick to point chance of improved employment of their population in the store.
- the neighbors and residents will enjoy a larger market for their locally produced good into the store thus increases economic growth in the city.
Wal-Mart representative
In response to the challenges brought about, the company is likely to give out the following benefits to the company:
- The company will be equal employment and will give priority to the residents and neighbors so it will lead to employment growth, it will respect domestic labor rights so that it will neither underpay nor overwork its staffs.
- The company will sell its products at the right price and will not use unfair competition approaches (they are considered illegal).
- The company will buy locally made products and farmed products, this will enhance the growth of the local economy.
- The company will embark on several corporate social responsibilities, corporate governance, and ethical business strategies; this will be in the efforts of improving the welfare of the society.
- The company will offer to park to its customers so the city does not have to worry about any increase in traffic because of its operation.
- The company will pay its taxes and local council rates as required by law to facilitate social-economic growth in the city (Stevenson, 2009).
Reference
Stevenson, W.J. (2009). Operations management (10th ed). New York : McGraw Hill/Irwin.