Custom «Wal-Mart expansion» Essay Paper

Introduction

I like Wal-Mart and normally I do my shopping in its stores at least every month. Wal-Mart is a renowned international retail company that is not only a market leader in the retail industry but also the biggest company by revenues. The significant strides made by the company are commendable since the incorporation of the firm into public corporation in 1970. Wal-Mart is making meaningful progress in meeting both its local and international market targets. Because of this, the firm is focusing on expansion of international portfolio given the lucrative markets in Africa, Asia, and Europe. In addition, Wal-Mart is an international brand that takes this advantage to roll out new product lines.

Wal-Mart in my area

There is no Wal-Mart store in my area. Towards this, I support the opening of Wal-Mart store in my area. Wal-Mart has done enough to alleviate poverty in the society in not only America but the world at large. It provides employment opportunities, offer goods and service at affordable prices and it is involved in a number of community activities in areas that it has stores. Most people who criticize Wal-Mart do not have valid reasons to substantiate that the firms wage policy is worst in the industry. Opponents of Wal-Mart’s operations don’t realize that the firm plays a role of creating employment for other citizens while at the same time save money for the American people. The perception that Wal-Mart poorly remunerates its employees is fallacious because according to Tierney, “sweatshop jobs—even ones paying just $2 per day—provide enough to lift a worker above poverty level, and often far above it, according to a study of 10 Asian and Latin America countries by Benjamin Powell and David Skarbek” (2010). Whereas in Honduras a worker would make an average of $13 per day with most of the population earning less than $2, in America the argument is different. Critics base their arguments on the concerns of American workers. The opponents of Wal-Mart’s operations fail to realize that American economy in general benefits as shoppers are able to save money by shopping at Wal-Mart.

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Critics allied to the laws of the labour unions, they say that savings made by consumers are unjustifiable if social dislocations that the firm brings are put into consideration. They would be comfortable if Wal-Mart or any other retail chain pays higher wages to its workers and sell additional products produced by American citizens in favour of foreigners. ”This argument makes moral sense only if your overriding concern is saving the jobs and protecting the salaries of American workers who are already far better off than most of the planet’s population” (Tierney, 2010). People work to raise income. While others earn income by tilling the land, running small business enterprises, others are comfortable with income earned by working for Wal-Mart. This is freedom of choice that any American should be entitled to. Employees work at the firm because they opt to.   

Wal-Mart stores provide its employees with health insurance at reduced rates, according to survey carried out by Current Population Survey. If the employees in the retail sector are compared with those who are working in Wal-Mart, healthcare provision by the firm are much better than other retail stores and competitive business entities in America.

Wal-Mart rapid rise to dominance

Wal-Mart rapid rise to dominance is a positive moment to the community because it lays a good ground for affordable prices in the market. In this regard, the consumption will be higher hence the country gain revenue from taxes. Government revenue from taxes which result from high consumption is a great indicator of economic development in the country.

Capitalism globalisation and plight of workers

Wal-Mart rapid growth and development is a clear illustration that the concept of capitalism allows free and fair completion in the market. However, the completion in most cases is inclined towards gaining more and more at the expense of other players in the market. Capitalism encourages greedy tendencies among firms and companies. Globalisation on the other hand has enabled firm to expand their operation to overseas market thereby extending their profits and dominance. In this quest for more growth in capitalistic market economy, workers welfare sometimes is overlooked as the company would like to reduce cost and gain more profits.

Research done by Dube and Eidlin (2010) suggests that the entry of Wal-Mart in any state or country has the effect of lowering employee wages for the firm’s competitors. When Wal-Mart opens new stores the average wage of employees reduce; hence fall of the aggregate wage. This leads to the reduction of health care cover in an insurance policy that is covered by an employer. Moreover, insurance cover reduces the fact that new stores opened by Wal-Mart leads to low prices are beneficial to not only the lower but also the wider American population. According to Hausman and Ephraim, ”Existing research show big-box store like Wal-Mart can use their distribution system and leverage with suppliers to produce substantial savings to consumers” (Dube, Lester, & Eidlin, 2010). Through the internal capabilities and external factors, one can gauge that Wal-Mart remains a strong market leader and it will be easy for the firm to sustain its market lead due to myriad opportunities that still exist. One advantage that the firm has is substantial capital base, which is critical in rolling out more product lines and chain stores in other overseas markets. 

Retailer growth and power

Retailer can become too large and too powerful. The reason of this is capitalism and free market economy which allows a retailer to grow fast and gain a monopolistic tendencies. A monopoly therefore is quite powerful since it can win in price war. It has the power of experience, financial resource and enjoys economies of scale of big operation. Wal-Mart stores continue to stir both individual growth as well as economic growth of the country. 

Opposition to Wal-Mart expansion

The opposition to Wal-Mart expansion is not a legitimate political process but rather insincere ignorance of the operation of free economy and the concept of capitalism. Since the argument that Wal-Mart makes other competitors to close down is not valid. The competitor should come out smartly to outdo Wal-Mart by offering good prices and stocking high quality product.

The argument presented by Reich (2010) that Wal-Mart has lured the public by offering low price is on its own a supporting sentiment. It is a free market economy with several shopping stores and therefore when prices are affordable in Wal-Mart then it means that it minds about the welfare of the public than other competitors. In addition, Reich explains that, “Wal-Mart pays 1.2 million American workers an average of 9.68 dollars an hour”. This statement supports the noble initiative of Wal-Mart to provide employment to American population in a time when most companies and businesses close down due to economic problems. Therefore, it is important to note that Wal-Mart strives to continue to be relevant, to keep and create more jobs for the ever-growing population. In this regard, Wal-Mart should be given the opportunity to open more stores in order to create more jobs and as well contribute taxes to the government.

Conclusion

In conclusion, Wal-Mart is a great benefit to the public in many ways. First of all, it creates employment opportunity to not only American population but also other citizen of different countries it operates in. Secondly, it enhances economic development of a given place due to infrastructural development and efficiency in good service provision. Wal-Mart further makes it easy to obtain goods and services conveniently at affordable prices. On this basis, it is important for everyone to support Wal-Mart stores in its daunting task of ensuring that it keeps the public at heart and remains relevant without closing its doors.