Walmart has been the face of America in retails and stores. Today, this American Departmental and Online Store Company has evolved itself as a global brand. It is serving millions of happy customers around the globe. As the other global giants, Walmart has to face certain factors that is disrupting the steady work flow.
PESTLE Analysis of Walmart
Political Factors that Affect Walmart’s Operations
Walmart has been one of the biggest name in retailing both in-store and online. It is now a global brand which is serving almost 265 million happy customers every week. (1) As they are operating all over the globe, they has to face some issues and criticism amidst regions and nations. Walmart has faced some political imbalance lately which has disrupted the operations and sales for a short period of time. For instance, in China, a particular Walmart store was alleged to label and sell regular pork as organic pork to their customers. The Chinese Government was quick to react to the matter. Walmart had to pause almost every operations in China and face a series of trails. As it is operation in various countries, tax regulations and sales regulations can become a huge hurdle for the company. It has also face some employment relation issues regarding pay checks in recent times.
Economic Factors that Affect Walmart
As mainly retailers and manufacturers of consumer goods, Walmart heavily relies on the sales and the consumption rates of their valued customers. That means Walmart’s stability depends on the sales and revenue flow. If the economy falls or declines, as it is seen in most nations, Walmart will be facing difficulties in manufacturing and sourcing goods which will lead the company to continue an unwanted price hike. Such price hikes can make the customers unhappy and also demotivate the potential customers to shop in Walmart offline or online. On the other hand, their arch rivals like Amazon.com or Shopify can give then a run for their money. Such instability can be proven to be lethal for Walmart. What Walmart can do is to properly do their homework in the specific regions economy and work according to a plan. This might be beneficial for the company in the long run.
Socio-Cultural Factors Affecting Walmart
Walmart, as I have said it before, is an American retail and online departmental store. It has a unique low price and ‘American’ selling strategy. Such one sided strategically influenced approach can become very costly as Walmart is after all a global brand now. But when you go global, there are certain sectors which are needed to be followed. For instance, you cannot sell pork in Muslim orientated areas. Or you cannot sell products which are legal in the States, but not in that specific region. It is very crucial to adapt according to the nature and the social acceptance. Walmart has learned it the hard way as they had to retreat from Germany and ended up facing a 1 Billion US Dollars’ worth of loss. (2) But if this continues in the same passion, the Walmart will have a hard time even surviving on international grounds. So, heads up, Walmart!
Technological Factors Affecting Walmart
Walmart is indeed an empire, serving million and millions of happy and satisfied customers every week all over the globe. To maintain this huge empire and the customer satisfaction, Walmart cannot afford to rely on their human resources. To maintain this heavy work flow, they have decided to go auto! They have been using the technology and automation to elevate themselves to the next level. Even they have been maintaining the stores with robots. On the first half of the year 2020, Walmart has automated 650 more stores with robots which reorganizes the ramps much faster and efficiently. (3) But going automated doesn’t mean that Walmart is sacking people from their jobs. They are making a work army where robots and humans work simultaneously for maximum efficiency. (4) Going automation has been the main go to when it comes to the companies like Walmart. But there are stills rooms where they can develop certain automation.
Legal Factors Affecting Walmart
Walmart has been facing legal pursuits from the very beginning. As we are speaking legal pursuits, it does not only contains legal trails but also major policies in certain regions. Let break this into two parts; one is the legal pursuits and the other is regularity controversies. Frist up, legal pursuits. Walmart has faced various legal trials in different times. For instance, Walmart was accused by a group of ex-employees as they had no sitting arrangements in their facility as well as not granting sick leaves. (5) After a long fought trails, Walmart had to pay a huge amount of compensation. Walmart has also faced criticism over gender discrimination in the workspace and selling controversial items. As of regulatory issues, Walmart has been a huge disappointment in China considering the Pork selling issue. Some nations has imposed tough regulations on the company. This has been a huge setback for the company.
Environmental Factors Affecting Walmart
Walmart has been a major rookie in maintaining a sustainable business model. It has been conducting a huge impact on the environment. It has failed to maintain an environment friendly workspace. In order to make things cheaper, Walmart often conducts decline in the quality and quantity. Walmart has not been in the high lines if it comes to using reusable or renewable energy in their stores. Walmart has no proper plan for the disposal of their waste products. Packaging has been a major issue for Walmart as they have been using plastics in their stores. The Parking Lots are always full of cars, which means that they have been emitting greenhouse gasses. A typical Walmart store often consume acres of land which is sometimes unnecessary for a departmental store. These are some of the points where Walmart is impacting the environment directly. (6)
Walmart should act fast to resolve this problem.
Bottom Line
In the PESTLE Analysis of Walmart we have found that, despite the certain shortcomings and setbacks in some of the sectors, Walmart is still standing high on their rock solid base and revenue generation. Clearly, it has become a part of America and Americans can stop loving it. Walmart should solve the shortcomings. If they can do that, the standards will elevated much higher.
Related
- Marketing Mix of Walmart
- What are the Competitive Advantages of Wal-Mart?
- Marketing Strategy of Walton Bangladesh
- SWOT Analysis of Walmart
Reference Link
- https://corporate.walmart.com/our-story
- https://www.theguardian.com/business/2006/jul/28/retail.money
- https://www.businessinsider.com/walmart-adding-robots-help-stock-shelves-to-650-more-stores-2020-1
- https://www.forbes.com/sites/kevinmurnane/2020/01/23/why-automation-doesnt-lead-to-lost-jobs-at-walmart/#327c53ed7df9
- https://www.nytimes.com/2017/06/01/business/walmart-workers-sick-days.html
- https://ilsr.org/wp-content/uploads/2012/04/topten-walmartsustainability.pdf
Nishat Tarannum Mridula is a contributing writer at The Strategy Watch. She has been contributing for last two years.
Nishat is currently studying at the University of Dhaka. Even though her major is in Banking, she enjoys writing on diverse topics, starting from appliances to blogposts. She is in the middle of completing her BBA from University of Dhaka. Alongside that, she writes different types of business articles for The Strategy Watch.