Environmental factors and their impacts

Environmental Factors

Wal-Mart, the public corporation founded by Sam Walton in 1962 in the United States, represents the world's largest retailer and seventh-largest corporation in terms of gross weight. It also has one of the greatest supermarket lines in the United States, which has allowed it to become the greatest private employer in the country.

The organization has developed a strong international presence in other countries, expanding its targeted base of consumers. According to its annual report, In January 2006, Wal-Mart accounted international operations accounted for approximately 20.1% of total sales. Despite a strong presence in countries such as the UK, Mexico (as Walmex), Japan or Canada, some of the company's international operations were not as successful. As such, Wal-Mart was forced to sell its operations in South Korea and Germany in 2006. Many of these failures were determined by environmental, external factors that have impacted the organization's activity.

As the world's greatest retailer initially born in the United States, Wall Mart Company has found itself in the position of being the object of two types of marketing decisions: domestic and global. The main reasons for this might be the cultural diversities existing between the Americans, Southern Americans, Europeans and Asians; on the other fact it is commonly assumed that there are great differences between the characteristics of the countries' markets existing on each continent.

Therefore, the environmental factors which affect the domestic marketing decisions in the case of Wall Mart are most of the times different from the ones that affect the global marketing decisions. For example, the nationalistic feeling is not as strong in China as in Great Britain, when it comes to the development of foreign brands in their country. Even though, there have been encountered several types of environmental factors which affect both domestic and global marketing decisions: political, cultural, technological, ethical and social.Both domestic and global marketing actors find themselves into a direct relationship with the national and international political stability.

In the case of Wall Mart, in the United States there have not recently been encountered significant political instabilities which might have led to the re-direction of its marketing policies. Even though, the lack of implication of the government in regulation of the economic activities has helped Wall Mart to increase its popularity and, on the other hand, to spread the rumor that the buying decision of the Americans is strictly related to their nationalistic feeling.

On the other hand, though, on the global plan the political stability should be seen by the management of the company as a decisive factor for choosing countries on which territories they would develop, since political stability is in direct relationship with economic stability and, consequently, with the buying power of the population.

In what the economic stability of the United States is concerned, this has been of great use for Wall Mart, since it allowed it to develop a rather monopolistic position for itself. Thus, there have been many cases in which the goods' producers have complained because they could not sell their products at the prices they desired, when having Wall Mart as the main great buyer. When it comes to the global plan, as it has been outlined above, the economic stability should be seen as a sine-qua-non condition for choosing a country on which territory the company would expand.

In terms of technology, it has been assumed that it plays an important role in enforcing both domestic and global marketing decisions. For example, the Internet is the main means through which the CEO of Wall Mart Inc. communicates its decisions to the Managers of the company's hypermarkets in other countries. Thus, new approaches for electronic communication and e-commerce help solve problems. For example, many companies are using the Internet, fiber-optic telephone lines, or satellite transmission systems to immediately transfer data from a computer at one location to another."