MGT/421
Individual Environmental Factors
Wal-Mart
Shirley A Everett
April 24, 2012
Robert Stack- Facilitator

Effects of Global Economic Interdependence Globalization in the economic context is related to the increase of individual businesses that operate in a range of countries. Therefore, Globalization stimulates economic growth, creates jobs and raises income levels. Globalization is marked by free trade, free flow of capital and cheaper foreign labor markets. Globalization has several facets, globalization of markets, merging historically distinct and separate national markets into one huge marketplace, and globalization of production, sourcing of goods and services from locations around the globe. There are still many challenges in the global market, for example; distance, time zones, language barriers, cultural differences, currency issues, as well as national government regulation issues, and business system improvements. Still, the world is looking smaller through globalization. In the case of the Wal-Mart as a Multi-National Corporation (MNC), the factors that affect its global and domestic marketing decisions are based on their striving to continue to dominate the retail market of the United States, and continue to build their presence around the world. The strategic planning of Wal-Mart approaches global expansion with a regionalized marketing campaign. Wal-Mart’s global focus is on finding low cost products from around the world, importing those products, integrating such products, and finally distributing them into the American marketplace. Global interdependence means that counties around the world are dependent on each other for certain goods and products. This concept is based on the immergence of importing and exporting between certain countries, specifically China. China is Wal-Mart’s major supplier because of the marketing mix China offers on goods and products. China benefits as well from Wal-Mart’s desire to increase its customer base because increased demand for low cost goods creates more jobs for its country. The global trade allows Wal-Mart to increase its efficiency and lower its cost, true enough. However, barriers exist in the trading market need to be taken into consideration, specifically quotas, tariff adjustments and exchange rates risks. Governments in foreign countries have the authority to control the amount of goods being imported or exported through their country. Wal-Mart’s operations are at risk of being impacted if tariffs are increased or quotas are decreased in their operations. Any significant change would cause Wal-Mart to be forced to increase the costs of goods being sold, which means the customer would make up the difference. Certainly the motto, “save money, live better” would be gravely compromised.
Demographics and Infrastructure When deciding a marketing decision, demographics play a major role for Wal-Mart. Demographics entail information regarding a country’s population. Demographics address factors regarding income, gender, age, density, location, race, occupation and more. (Armstrong & Kotler 2011). Looking closely at these statistics help organizations decide which location would be most profitable to build additional physical infrastructures such as Wal-Mart stores and distribution facilities. Location is major because the buying population is guided by different elements; in Wal-Mart’s case its lower prices. How well the physical infrastructures are developed in the global arena is significant to Wal-Marts ability to expand internationally. Transportation networks such as railroads and roadways along with facilities to distribute goods are mandatory to the success of effective operations.

Influence of Cultural differences Wal-Mart’s domestic and global marketing decisions are influenced by cultural differences. In Germany Wal-Mart does not employ greeters at the entrance doors of the stores, nor do the stores employees have employees in place to collect carts and bag groceries. This strategy is based on the cultural values of that country. German culture does not see these services as valuable. However the German consumer’s value time, they don’t like waiting in long lines, so cashiers are always available for checkout. The Wal-Mart in China has a larger selection of fresh meats and fish than the Wal-Mart consumers in the United States. On the other hand, Chinese consumers are accustomed to shopping in an open market, to buy and prepare their meals on a daily basis. They bring their own re-usable shopping bags or purchase them from the Wal-Mart stores. The convenience of the shopping bag system is part of an efficiency plan Wal-Mart implemented in 2007 to create zero waste. The same system is being implemented in the United States (Building the Next Generation).
Social Responsibility and Ethics Ethics and responsibility is a key for any business to continue to succeed and be effective. Unethical behavior not only harms the consumer, but society as a whole. Wal-Mart’s ethical practices line up with their belief in sustainability. This belief calls for socially and environmentally responsible actions that meet the needs of the consumers and businesses while preserving the ability of future generations to meet their needs (Armstrong & Kotler, 2011 p. 511). Wal-Marts environmental goals are to use 100 percent renewable energy, and sell products that sustain the people and the world’s environment (Wal-Mart, 2011). Enron is a good example of unethical behavior and the damage it created to its employees, stakeholders and society. Wal-Mart is responsible to make right decisions concerning legality, ethics, and social responsibility. Because not all legal actions are ethical, making a distinction is important concerning global operations. Each county has its own laws and ethical views. Companies “must look beyond what is legal and allowed to develop standards bases on personal integrity, corporate conscience, and long –run consumer welfare” (Armstrong & Kotler, 2011).
Political Systems and the Influence of International Relations Wal-Mart is a global company and because of that fact, is forced to work with countries that have political systems different from the United States. This can be a challenge because laws and policies vary from country to country. Also, the political system in many countries can become unstable because of wars, internal political strife and terrorism (Kerin, Hartley & Rudelius, 2011). Conducting business in a potentially unstable country is risky for any business because of the threat of losing its investments.
Influence of Foreign Corrupt Practices Act of 1977 Wal-Marts national, local and international operations are all guided by the Foreign Corrupt Practice Act of 1977. This Act makes “it a crime for U.S. Corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country” (Kerin, Hartley & Rudelius, 2011). The law also applies to foreign firms and individuals who conduct bribery while in the United States (Perrault, anon, & McCarthy, 2011).

Effect of Technology Wal-Mart’s networking system is sophisticated and enables the company to manage and direct its merchandise. Wal-Mart uses the Retail Link system that allows tracking of sales, managing of inventory and sales forecasting. “The system has been a competitive advantage for Wal-Mart and is still its focus for the company today” (Retail Link Blog, 2011). This technology helps Wal-Mart replenish it goods immediately, keeping its stores stocked with inventory. As a result of this highly technological system, costs are kept low and savings are passed on to the consumer. As a result of this technological advancement customers are able to order merchandise from Wal-Mart’s Internet site with an option to pick up their goods or have them shipped to their homes.
Conclusion
Wal-Mart’s continual success in the domestic and global interdependence will come with challenges. Strategic planning in both areas must be continually considered for success. Conducting business in foreign countries require close looks at the culture and laws that will affect its business. The most important factor to adhere to is ethics. Ethics tie into each thread of continual success in a company.

References
Armstrong & Kotler (2011). Marketing: An Introduction (10th ed). Upper Saddle River, N.J.: Prentice Hall
Kerin, R.A., Hartley, S.W., & Rudelius, W. (2011). Marketing (10th ed.). New York, N.Y.: McGraw Hill Irwin
Retail Link Blog. (2100). Retreived from http://retaillinkblog.com/what -is-walmarts-retail-linksystem/3
Wal-Mart Corporate. (2011). Retrieved from http://walmartstores.com/Sustainability April 22, 2012