With the involvement of the involvement of the American multinational retail corporation, different issues arise due to its changes. The corporate operates a series or a chain of hypermarkets, grocery stores and also discount departments stores. Under the same bracket, it also owns and ensures the operation of Sam's Club retail warehouses. With consideration to the current changes and the strategic locations of Walmart, the retail company has close to 11718 stores and clubs in the context of 28 countries that operate under different corporate names (Morillo et al., 385-408). With a global focus, Walmart is one of the largest corporates that by the various changes is rendering different effects.
Walmart is conquering the United States and spreading across the global setting to Europe and Asia. These changes proved helpful to the operations of Walmart as people do not majorly focus on the implication of the involvement of sub retailer corporations. The development is fostering a vast number of customers which of course happens because the customer cannot visit a different store not because the goods are different but because of the general perception concerning Walmart by the consumers. As the multinational retail cooperation strives to enter the global market and conquer the markets, it is impacting the operation of other businesses especially in the small towns within its fostering.
Destruction of The Small Towns
Under the epitome of small towns, when Walmart appears to the cities, the local economic framework is affected in different ways as the economy in the hamlet is thrown into turmoil. Several regional and businesses located in the small towns are trampled by the existence of low prices that are brought into life by the vast economies of scale that Walmart carries along. With these low prices that the retail corporation induces, it makes it difficult and complicated for the small retailers to compete. In one way or the other, the involvement of Walmart in the small towns is rendering a significant effect to the entrepreneurial settings of the small towns as the retailers there cannot counter effective competition regarding customer acquisition (Wolff-Mann, 2016).
According to different studies, A grocery (44-years old) in North Carolina registered a relative drop in sales immediately the multinational retailer corporation opened a store nearby within the context of the last two years. The grocery succumbed to price changes and competition that impacted the general operation along with other effects. Moreover, prices difference renders the significant results to the small businesses as Walmart is a large vendor in comparison to other small business that easily succumbs in case of a price drop as the commodities sold are not numerous. However, other effects would come along with the involvement of Walmart in the local towns and local businesses. Whenever Walmart creates a new store, the other enterprises succumb, and most of them end up closed as a result of the different effects. It is a common tragedy in the local settings (Wolff-Mann, 2016).
Recently, there are claims that Walmart might close up to 100 stores in the rural small town. The concern of the closure occurs because of the involvement of the corporation into the small towns which in return me frustrate the residents. When Walmart moved in the small towns, it revoked the closure of other small businesses or retailers leaving it as the only store in most cases. As a result, its closure may mean that these small towns may be left without a grocery store or a pharmacy thus a significant inconvenience. With consideration to most of these instances, they have resulted in the involvement of the community in the framework concerning the Walmart stores.
Walmart's Contribution to Poverty
The occurrence and existence of Walmart have affected the poverty rates that are gaining estimation to almost 20,000 families in the United States that fall below the poverty line as a result of the expansion of the chain company. In a most recent study, Walmart is among the top countries ensuring the employment or people with an equally high number of employees working in their stores either in the big towns or the small towns. Similarly, Walmart employees a large number of individuals living in the locations of its stores. For instance, in the case where a Walmart store location is in rural small towns, the employs are members of the communities which render the evidence for the employment (Goetz & Hema Swaminathan, 211-226).
Regardless of the employment by Walmart, the working hours and the wages the workers acquire, they provide minimal help to the families transition from poverty. With the consideration of the prior argument concerning the opening of a Walmart store that leads to the closure of the mom-and-pop type operation, then it means that stores will render other individual un-employed among other occurrences. It indicates that the small businesses are kicked out of the market by the Walmart stores due to different events such as competition. Thus, the loss of jobs renders the rise in poverty levels. Also, the closure of these mom-and-pop stores revokes the closure of other ventures for example wholesalers, among others. In consideration to the position of these job opportunities, they are high paying jobs since most of them are entrepreneurial thus may render better wages in comparison to the job opportunities created through the Walmart stores that are offering lower salaries. Thus, the poverty rates increase rather than reducing.
Correspondingly, the involvement of Walmart to the small towns is rendering different reactions to the community and also the businesses as a whole. It represents the actualization of other factors that may affect the existence of other company under the same line. These factors may include the involvement of happening (such as unionization, employment of undocumented aliens, discrimination against minorities, among others). Unionizations involves the placement of business in a chain of trade unions that involves workers coming together to achieve a common goal that involved their welfare. Since individuals may not want low wages, the store may lead to the involvement and employment of undocumented aliens that are willing to work under a specific condition and lower salaries. On the other hand, the minorities may face discrimination due to different factors that involve the involvement of Walmart stores in the small developing towns.
Under different dimensions, Walmart may be creating better opportunities for the people leaving around larger towns. The individual may gain subjection to lesser wages; however, the working conditions are favorable. With the context of the stores in the smaller city, there are significant challenges and disadvantages to its existence or involvement. Since Walmart suffocates the small businesses, then the chances for entrepreneurship in the regions are significantly lower. It delivers the enormous negative impacts on the small businesses or retailers operation near its premises.
As a result, it creates the Walmart effect. The Walmart effect includes the economic impact attributed to the multinational retailer corporation which affects the local operations (such as driving wages down and forcing the small independent competitors out of business). With the changing times and economies, the structure of the retail store is changing with each passing day and its operations changing. According to the management of the retailer chain company, they perceive the involvement into the small town strategic in the acquisition of revenue but do not render a consideration on the effects of to the communities and especially the little independent retailers (Paruchuri et al., 209-236).
Walmart moving into the small towns may render the chances for development; however, the prospects for the destruction of the cities are higher. To understand the underlying explanation behind the ruins of small towns by Walmart moving to their location, one needs to know how it takes place. For Walmart to settle and efficiently operate in the small township, it functions by kicking out the small independent business. The small companies cannot keep up with the competition since the Walmart prices may be lower or equal in different contexts (Vachon, 2016). As a result, people lose jobs, and other acquire employment which in return they earn low wages that would not deliver their families from poverty. As a result, the settlement of Walmart to the small towns comes along consequences that in one way or the other may end up destroying the small villages or communities. Understanding the involvement of the multinational retailer company to the small cities is essential.
Goetz, Stephan J., and Hema Swaminathan. "WalMart and CountyWide Poverty." Social Science Quarterly 87.2 (2006): 211-226.
Morillo, Juan, Callie McNally, and Walter E. Block. "The Real Walmart." Business and Society Review 120.3 (2015): 385-408.
Paruchuri, Srikanth, Joel AC Baum, and David Potere. "The WalMart Effect: Wave of Destruction or Creative Destruction?" Economic Geography 85.2 (2009): 209-236.
Vachon, Christine J. "Big Fish, Small Sea: Big Companies in Small Towns." Mitchell Hamline L. Rev. 42 (2016): 1105.
Wolff-Mann, Ethan. "The New Way That Walmart Is Ruining America's Small Towns." Money, 2016, Retrieved from: http://time.com/money/4192512/walmart-stores-closing-small-towns/
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