Political: The first thing we need to look at in the political environment is the stability of the existing government. In the case of the US market the US government is very stable and there is no danger of any radical regime changes. For the US market Wal-Mart would have to pay domestic taxes in all fifty states and to the Federal Government. Taxation could potentially rise as the Democratic Party attempts to pull the government out of debt. One potentially dangerous political group could be unions. Workers unions could potentially drive Wall-Marts labor prices up, however Wal-Mart has been very successful at keeping union workers out of its stores. Regulatory concerns could involve worker safety in warehouses and stores, food regulations due to their grocery function, and possible antitrust laws if they grow to large.
Economic: Employment issues could involve Union issues, high cost of labor compared to other markets, and a high demand for benefits from US employees. Interest rates in the US are currently very low; this would allow Wal-Mart easy access to debt financing and intern make expansion possible. The US is also the largest market in the world thus offering huge profit opportunities.
Sociocultural: Demographically Wal-Mart is operating in a diverse market both racially and socioeconomically. Wal-Mart targets all races and the lower and middle class in the socioeconomic demographic. This target demographic offers a huge potential market. Wal-Mart has encountered some resistance is this category as it has been painted as a destroyer of local stores and businesses. Wal-Mart likes to operate in rural areas were it can draw customers from multiple small towns. Local stores in these towns can’t compete with Wal-Mart’s low prices and are driven out of business. Wal-Mart has been attacked for this with people blaming them for destroying small town US and putting people out of work.
Technical: The US Market is extremely advanced. The...
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