Wal-Mart Corporation, a private company based in the United States, has been famous all over the world due to its low price retailing business despite numerous competitors such as Kmart, Sears and Target among others. In the United States alone, it has an employment of almost one million workers, aside from the over 300,000 employees worldwide. With this, it can be concluded that Wal-Mart has created more jobs than any other companies globally.
Having the largest population in the world, India’s total labor force, comprised of self-employed, wage and salary earning, casual and unemployed, was estimated at around 407 million in 1999 to 2000. The organized labor force of hired, regular and contractual employment is comprised only of 14% the total labor force in which: 60.4% comes from agriculture; 22.3% provide services in trade, hotels, business services and social and personal services; while the remaining 17.3% goes to the industry consisting of manufacturing, mining and quarrying, construction, electricity gas and water (National Sample Survey Organization, 2001).
Unlike China who also relies on its labor force, India’s labor market and competitive-edge is underrated and yet to be fully-tapped as most of manufacturing industries and services are being done in the former.
... 'need' to participate in the labor force. Alla found herself needing more goods and services that just her husband's income could ... the growing and permanent amount of women entering the labor force, the fertility rate decreased. A negative relationship between the ... fertility rate and labor force participation became evident in the working women. This ...
With this, the paper aims to analyze the potential of India’s market sector and provide necessary recommendations for the Wal-Mart prospective expansion operations.
II.Analysis of India’s Market Status – Using the SWOT Analysis (Strength, Weaknesses, Opportunities and Threats)
Economic §Large human capital, as the services sector rapidly increases.§From a state-run economy, it has now ventured into free-market.§Rapid increase in the services sector.§Vast agricultural resources, especially the agro-processing industry.§As compared to Latin America, India does not have considerable economic crisis.§Highest personal income tax rate was brought down from 56% to 30% while corporate tax rates for public companies were lowered from 51.75% to a fixed 46% or less.§Lower rate of labor absorption.§Earnings are shifted from labor to capital income.§Compared to developed countries, people have lower buying power.
Political§More liberal policy reforms. §Clear-cut policy framework to protect the resource-poor from economic development is yet to be developed.
Socio-cultural§Greater labor force, particularly for men.§Gender-bias, especially for married women who have less chance of being hired. Marriage increases a woman’s responsibility for care-giving and domestic work. §Less education provided for most of Indian women.
Opportunities and Threats
Human capital. Despite its growing population, India’s human capital can be favorable for Wal-Mart due to its cheaper labor cost. With more labor, production in goods and services specifically being packaged and distributed by the company will be increased exponentially as the company progresses. As Wal-Mart creates more jobs, its “domino-effect” also includes: increasing the country’s total organized labor force, tax collection for goods and services despite cheaper rates and the overall welfare of the nearby communities, and ultimately at the household level. In the long run, more jobs will lead to population reduction.
Agricultural Resources. India’s vast agricultural resources can be enriched as Wal-Mart can open new doors for marketing locally produced and manufactured goods and products, not only in India but also to other Wal-Mart branches throughout the world.
1. How would you characterize the branded and packaged Indian hair care category in 2010? In 2010, with Lotus & Bamboo soap bar was introduced by Mary Kay in India, May Kay was approved a customized product for a specific country or region market for the first time. Moreover, the branded and packaged Indian care category of Mary Kay was growing up and expanding its product to attract more ...
Entry of cheaper, imported goods. The introduction of cheaper, imported goods could downplay India’s local production, distribution and marketing. India’s cheaper buying power, as compared to developed countries, may either suffer or broaden business product competition among local competitors towards improving product quality that conform international standards. On the other hand, the quantity and size of competing business retailers could also possibly increase and enhancing retail employment in the country.
Gender sensitivity. Being an American company, Wal-Mart human resources not only adhere to the male, but also to the female population. Given that India is a traditional paternoster country, efforts in maintaining gender sensitivity can be a worthwhile challenge.
Given the aforementioned SWOT analysis as a basis for screening the market potential and its associated drawbacks, Wal-Mart should consider expanding its operations in India. India’s cheap labor will pave way for what the company is known for, “providing measured productivity while keeping low-priced products.” Tapping the market potential of local products will be both beneficial to India and Wal-Mart, with the former being able to boost its local production and penetrate the international market while the latter is able to capture the culture and taste of Indians while providing a “venue” for showcasing the country’s finest products.
Although India’s buying power is a huge factor to consider, free market will allow the company to broaden its target market from the high-end to the low-end users, providing affordability but notwithstanding product quality. With continuous product and marketing innovation, research and development, Wal-Mart’s competitiveness and India’s extensive human and agricultural resources will encourage local competitors from elevating the world’s global market.
1. 1. 1 The development and history of Wal-Mart On July 2, 1962, the first Wal-Mart store was opened by Sam Walton in Rogers, Ark. After 28 year’s development, Wal-Mart became the nation's number-one retailer by 1990. Wal-Mart’s 10,900 stores under 69 banners in 27 countries and e-commerce websites in 10 countries are visited by more than 245 million customers and members each week. Wal-Mart ...
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