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Retail Business Environment

Notes assessment to see where their strong points are and, more importantly, where their weak
points are. We can see from this data that Wal-Mart has a weaker reputation than all of the
other companies. This may be an area Wal-Mart may want to work on in order to improve
their overall standing.
Issues and Recommendations

I feel that Wal-Mart’s most challenging issue involves the public’s resentment. Wal-Mart
has wiped out numerous retail establishments (too many to count) and will continue to do
so unless stopped. So far, some “big box” opponents have stopped Wal-Mart from specific
expansions but Wal-Mart is definitely fighting back. From Wal-Mart’s point of view, I
think more focus should be spent on global expansion. If specific areas are so against
having a Wal-Mart that they pass laws to stop Wal-Mart from building in their area, I
think Wal-Mart should stay away. For example, Wal-Mart would have a terrible time
expanding into Oakland. I would assume that with the laws that were passed, a great deal
of negative press also took place. The time and effort to get a Wal-Mart built in Oakland
may not be worth the trouble. This is one of the reasons I feel Wal-Mart should focus on
international expansion. There were 1,355 international Wal-Marts in 2004. I definitely
feel that expanding this number sounds like it could be very lucrative.
Another issue facing Wal-Mart is the federal lawsuit regarding sex discrimination. From
the numbers quoted in the case study, it sounds as though Wal-Mart is clearly discriminating
against females. This is somewhat surprising but will hopefully be fixed. Wal-Mart is very
thorough in their strategy, maybe they need to be more thorough and/or detailed in their
compensation and incentive policies. Wal-Mart definitely needs to end the discrimination.
In order to avoid future discrimination, monitoring of wages and salaries should be
established. This is especially true for upper management employees, where females are
paid significantly less than males in similar positions.
Last, I feel that the compensation and benefits offered to Wal-Mart employees are somewhat
of an issue. If only about 60 percent of employees have health coverage (compared to 72
percent in the retail industry as a whole), I think their benefit package needs to be
reevaluated. The case study claims that the reason many employees did not sign up for
health coverage is because they obtained it through a member of their household. I’m sure
that is the case for some, but not all. Furthermore, Wal-Mart does not pay any health care
costs for retirees. I feel that both examples are methods Wal-Mart uses to cut costs and both
need to be reconsidered.
Although there are a number of dilemmas in which Wal-Mart must take action, I feel that
they are doing extremely well overall. They are the largest corporation in many countries
as well as the world overall. They may need to improve their image and work out their
legal battles but I don’t think they should feel generally threatened. As Sam Walton said,
“Recognize that the road to success includes failing, which is part of the learning process
rather than a personal or corporate defect or failing. Always challenge the obvious.”

4.3 Government Policies in Retail Sectors

It will be prudent to look into Press Note 4 of 2006 issued by DIPP and consolidated FDI Policy
issued in October 2010 which provide the sector specific guidelines for FDI with regard to the
conduct of trading activities.
(a) FDI up to 100% for cash and carry wholesale trading and export trading allowed under the
automatic route.
(b) FDI up to 51 % with prior Government approval (i.e. FIPB) for retail trade of Single Brand‘
products, subject to Press Note 3 (2006 Series)

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