Social Factors Affecting Walmart
Social factors became one of the main reasons for Wal-Mart and other stores like to become popular. Discount stores managed to gain popularity because of consumer’ concern for value. Customers want the best value for their dollar. This is where discount stores were able …show more content…
Wal-Mart has been able to maintain its low prices highly because of the use of technology. The use of Electronic Data Interchange (EDI) has helped Wal-Mart cut down human labor hours by shortening its distribution cycle. In addition to EDI Wal-Mart also has introduced the use of Radio Frequency Distribution (RFID). With the help of RFID Wal-Mart is expected to save $8 billion of labor saving and another $2 billion by reducing shrinkage. Technological use has immensely aided Wal-Mart to maintain its position as a market leader and help the company …show more content…
However, due to its size and variety of products ecological factors aren’t Wal-Mart’s biggest concern.
Political matters serve as an important factor in Wal-Marts operations as well. After the state laws, that fixed prices to protect local grocers, were repealed, discount stores were able to become more competitive and expand their business. With the help of this Wal-Mart was able to expand its size with a business model focused on proving low prices. Wile some laws proved to be beneficial for Wal-Mart others didn’t. For instance, the minimum wage and high production cost because of that lead Wal-Mart to outsource production of goods to foreign suppliers, that provide low cost.
As Wal-Mart started facing issues locally, such as, low growth rates, the best option the management could come up with was to expand internationally. Following the business model of many other international discount chains, Wal-Mart also started expanding internationally. However, each country had its own set of issues that had to be dealt with. This made the international operations extremely challenging. While the success in international markets was successful to a certain extent it was no where near the