Introduction Wal-mart stores, Inc. is an American public corporation that runs a chain of large, discount department stores and it is the world’s largest corporation by revenue. It is the largest private employer in the world and the fourth largest utility or commercial employer, trailing the people’s liberation army of china, the national health service of the United Kingdom, and the Indian railways.
It has been criticized by some community groups, women’s rights groups, grassroots organizations and labor unions and the specific criticisms include the company’s extensive foreign product sourcing, low rates of employee health insurance enrollment, resistance to union representation, and the alleged sexism. This company was incorporated in 1969 and it had 38 operating stores with 1,500 employees. It began trading stock as a publicly- held company and it has being growing rapidly.
As it grew rapidly into the world’s largest corporation, many critics have worried about the presence of its stores in the local communities, particularly small towns with many stores. There have been several studies on the economic impact of Wal- mart on small towns and the local businesses, jobs, and the taxpayers. It is found out that some small towns can lose almost half of their retail trade within 10 years of a Wal- mart store opening and also the shop owners who adapt to the ever- changing retail market can thrive after Wal- mart comes to their community.
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A letter shows that there has been major reorganization of the retail sector in India, being considered by the agriculture and the commerce ministries with the green signal from the prime minister, under the garb of inviting investments into agriculture and propelling the second green revolution in the country. Different people in India have different perceptions about the knowledge or ignorance to the entry of American and the European major retailers into their country either directly or on the backs of a facilitating joint venture entity with the Indian non- retail players.
Retail is the big sunrise sector in India and promises major electoral battles even though the communists are busy saving the navratnas and prefer to ignore the issues of eviction of the sharecroppers from the farmlands. A great controversy is brewing in the political circles bout the entry of consumer retail Wal- mart in India. Most of the Indians accept that with this Wal- mart the advent of more competition in the market wouldmean greater choice in material, quality and prices.
The arrival of the malls and the hyper- markets have changed the scenario in a positive way where large volume buying means lower rates, quality goods guaranteed by most sellers and even the consumers with a lower budget who have the option of availing of discounts at the market place. But the pessimists have predicted that the mall culture would harm the consumer in the long run; but with the malls increasing all over the city, the consumers are spending to their hearts’ content.
The complicated issues with the foreign retailers entering the Indian markets is that it is believed that the Wal- mart drives all other competitors to the ground and then wallows in the monopolistic market it manages to create and also the allegation that the Indian money will fly abroad with the incursion of these multi- national giants into the Indian market. This is balanced by the fact that the end services provided by the Indian goods are finding a global market in the recent times. There is an ongoing debate about how high trend growth might be in India and the argument is that it depends on demographics and the productivity.
The productivity needs to rise and therefore there is need for better human capital and the acceleration of technology transfer. Therefore there is the need for the Wal- mart agreement since as is relatively known that Wal- mart shot to prominence due to the extremely effective way it leveraged it to organize logistics and so the Wal- mart is going to lead to an inflow of management and the technical know how, which will be extremely beneficial across the Indian economy as and when the practices to be introduced spread.
(Blythe, 2001) The India’s middle class sees the arrival of the world’s biggest retailer as another sign of the country’s growing economic clout and the antiglobalization activists are weighing in, saying that Wal- mart will squeeze out the India’s poverty- stricken farmers and the activists have little consideration for the economic implications.
The Wal- mart capitalizes on the economies of scale and uses the strength to drive down costs internally and gets hard bargains from suppliers, to live up to the promise of keeping prices low everyday, becoming a formidable inflation- buster which is good for consumers but if the Wal- mart deploys its legendary cost – squeezing skills in India, the activists have the fear that India’s hard- pressed farmers will go under.
(Brassington and Pettitt, 2000) The cost squeezing is the only part of a successful supermarket chain. They set quality standards, establish warehouses, and minimize spoilage, set up cold chains to ensure reliability and maintain inventory control to reduce waste. While the Indian agriculture sector is large then its distribution network is weak with a lot of its products been rotten.
The confederation of the Indian industry argues that India can be the world’s breadbasket but it has failed because most of its farms are small, inefficiently run, and also do not use the modern technology and the large players like the Wal- mart can change that once allowed to invest as they have more incentives to buy domestically and to build productivity- enhancing infrastructure. Most of the Indian farmers lack capital and therefore forced to borrow and the Indian banks have mean while reduced the rural credit to curb their exposure to the Indian farmers’ annual gamble.
Been unable to find an alternative many poor farmers continue to cultivate their land, take unsupportable loans from the rural moneylenders at high interest rates, and buy expensive seeds. If they would allow the Wal- mart the certainty of a large buyer setting quality standards and demanding new products would prompt farmers to form co-operatives or work as employees of agribusinesses, increasing their wages. Competition would also raise leading to better prices for their products and Wal- mart is viewed as a solution to this because when it enters a developing country, its farming sector modernizes rapidly ending stagnation.
As long as the government sticks to its fiscal responsibility act lower tax revenues are a good thing and if it doesn’t its even better and the great reason why there is inefficiency in the government is the lack of oversight. (Brassington and Pettitt, 2000) This is because there are not a lot of people with actual stake as to how the government spends the nation’s money. When there is a higher tax payer base, there is more stake and then the people demand more oversight, which in turn leads to better performance and the fiscal responsibility in addition to giving more funds for the government to work with for infrastructure projects.
The Wal- mart’s operation is different from the current Indian retailers, as they can completely take the entire supply chain from the field and the factory to the consumer. In India the Wal- mart is giving things a mighty push and that the long awaited agricultural revolution and the infrastructural growth can result as a side- effect of the organized retail explosion. (Brassington and Pettitt, 2000) Recommendation
India market is seen as the most productive in terms of agricultural products but the problem is it does not allow the Wal- mart to undertake its operations in it with the fear that it will practice the monopoly acts and get more benefits. From the believe of the people and the operation of the Wal- mart then it should enter the Indian markets so that it can bring in new technology that will curb the losses in the Indian produce and also assist its poor farmers in getting money. This is because with foreign investment then it becomes easier to borrow money from them and even they can give grants to assist them.
The people should allow the Wal- mart operations as it will boost their retail activities, agriculture, industry, and commercial activities which will enable the country to be the world’s supplier of its produce.
Reference: Blythe, J. (2001): Essentials of Marketing, 2nd Edn; New York, Prentice Hall Brassington, F. and Pettitt, S. (2000): Principles of Marketing, Second Edition: New York, Prentice Hall, Harlow Ziethmal, & Bitner, (2003): Services Marketing: integrating customer focus across the firm; New York, McGraw Hill.