Wal-Mart analysis Research Paper Example | Topics and Well Written Essays - 1000 words

Wal-Mart analysis - Research Paper Example The paper describes the Wal-Mart company in general. This company is also the largest grocery retailer in United States and deals with diverse ranges of product lines. Wal-Mart mainly operates in 17 different countries. It is identified that both US and UK follow a free market approach that does not impose any regulation on business expansion. According to this concept, the government has only a distant role in market regulation. In contrast, China has adopted a more restrictive approach so as to preserve the interests of its traditional traders. Although, China possesses world’s largest potential market, the strict market regulations adversely affect Wal-Mart’s business interests. As compared to Chinese market, Indian market covers the features of both capitalism and a socialistic market economy. This mixed market system provides equal power to industrialists and government over the market. Like in the case of US and UK, Japan maintains a free market system so as to en courage national as well as international traders. Japan’s industrialized economy is the third largest in the world. According to Daniels, Radebaugh, Sullivan, and Salwan, different nations follow different market systems and regulations. This varied market structures raise many challenges to Wal-Mart Stores because the organization is forced to restructure its marketing policies in accordance with the trade laws of the nations in which it operates. The sources of political risk for the countries in which the Wal-Mart has its presence vary. For instance, the organization operates in Pakistan where political conflicts and terrorism are at its peak. Such a political atmosphere is not beneficial for a multinational company like Wal-Mart because the political instability would seriously impinge on the firm’s marketing operations. Similarly, China is a communist country that strongly opposes capitalistic ideologies. Under this situation, the Wal-Mart cannot function effecti vely in China since the communist perceptions of Chinese government does not fit with the capitalistic interests of the organization. In this way, the Wal-Mart may face different political threats from its various foreign markets. Therefore, it is recommendable for the company to select foreign market segments carefully while dealing with international expansion. The above said political constraints prevent the organization from developing its product lines and business strategies in the target country. 4. Many groups of individuals possess shares in Wal-Mart and these stakeholders can be mainly categorized under two heads such as market and non-market stakeholders. A market stakeholder has an economic stake in what the company does; whereas a non-market stakeholder possesses a political stake. It is obvious that market stakeholders always aim at their economic benefits. Since both these groups contribute to the operational requirements of the company, Wal-Mart’s stakeholders must get benefits that are adequate to cover the risk elements they have taken. In the view of Brigham and Ehrhardt (2011, p.572), since investment opportunities and earnings of an international company vary from year to year, it will have to make great efforts to maintain stable dividend distribution. Hence, the shareholder satisfaction is a