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Wal-Mart is a US business that began in the 1960s using the productivity model to provide its consumers with quality goods. The business used global sourcing to supply the American households with low-cost goods. The business model has led to a variety of manufacturers producing relatively inexpensive products that are beneficial to the Americans (Brea‐Solís, Ramon and Emili 15). However, there are reports that, as well as supplying various jobs expected to be supplied to Chinese Americans, the business pays lower salaries and wages to its workers. According to the data from the financial market, Wal-Mart has an annual revenue averaging $300 billion per annum and employs approximately 1.6 million people across all of its branches (Courtemanche and Art 166). Additionally, the nature of the business model that has been adopted by the company has led to international trade disputes with some critiques questioning the underpayment of the staff of the company which leads one quest id Wal-Mart is good or bad for America.

The business model that has been adopted by Wal-Mart is a crucial tool for fighting poverty within the United States of America. The decision by the majority of Americans to shop at Wal-Mart is solely driven by the savings in costs that they realize when they buy products from the store. The business model that is being sought by the company is futuristic. There has been a rise in online sales with e-commerce considerably taking effect in the retail sector. Therefore, many consumers are increasingly having a preference for low-cost items from reputable companies. With the future pointing to the retail businesses coming up with business models that would enable them to establish cheap warehousing and employment of delivery staff in place of the shop attendants. Therefore, the futuristic model that is being sought by the company point to the need of the staff to gain additional skills that would enable to handle the online business which is predicted by economists as the future of the retail industry.

Wal-Mart promotes the idea of globalization. The business strategy that is advanced by the company seeks to ensure that American businesses can get out and compete with other firms across the world in a fair and competitive process. With the advent of e-commerce, the business legislation that protects local businesses needs to be revised to ensure that the local firms are also competitive regarding the quality and price that offer (Ephraim 3). Quality and price are the principal decision-making points that many customers use in deciding over what product that ought to buy and that which they can postpone. The opening of many online retail stores in the United Stat is largely driven by the domination of Wal-Mart in the retail sector. As such, Wal-Mart causes many companies to be creative, an issue that of benefit to the consumer.

The company encourages some of its staff to worn stock in the business; an issued that could lead to the economic independence of the employees despite the low wages that they offered. Additionally, employees can buy stock from the company, thereby encouraging them to be economically independent. Wal-Mart helps the local firms that locate within the very region in which they operate to be competitive about what they offer to their clients. The closure of the business within the location in which it gets into operation can be explained by the inability by such companies to provide superior products. The business environment is competitive, and businesses have to come up with strategies and use technology that would make their goods attractive to their target market and offer relatively cheaper products and still be profitable within their industry of operation. The retail sector is majorly driven by the customer preferences with the retail companies needing evaluating the changing choices of their customers and ensuring that what they have to offer their clients is in line with what they need at the price that they can easily afford.

Wal-Mart majorly targets the poor people who prefer to shop in the firm owing to the lower prices that they offer. Some statistics indicate the products of Wal-Mart are averagely 10% cheaper compared to those provided by other companies. Therefore, from the $350 billion in annual sales, there are about $100 million that are saved by the poor households owing to the cheaper purchases that they make. Therefore, it contributes to poverty reduction.

On the other hand, the business model of Wal-Mart is detrimental to the American economy owing to the poor conditions of work that the suppliers have to create for their employee to meet up the costs set by the company. The incidence of the employees of a supplier killed in a fire in Bangladesh while making products for Wal-Mart is a case at hand.

The profitability of the American firm is crucial to sustaining the employment of the American citizens. The case of dwindling revenues that the company realizes offers false hope for the model as being sustainable in employing many Americans. While the sales volume of the company has been rising, there is a continued and sustained decline in the sales that the company is making, thus, offering a likelihood of the company retrenching a majority of its staff shortly. Such would hurt the American economy with the unemployed Americans having to rely on food staff and social welfare from the government.

The economic model that is used by Wal-Mart is beneficial to commercial competitors of the United States, such as China, to the detriment of the American economy. Currently, more than two-thirds of the goods that are sold in Wal-Mart stores are directly sourced from China. Such creates the economic deficit that the United States faces presently against China (Morrison 409). The idea that labor in the United States is expensive from that of China does is skewed without taking into consideration the work conditions in which the Chinese workers are to operate. If Wal-Mart is to favor American suppliers, based on their economic model, the employees of such suppliers will have to work within unsafe working conditions and be paid below the minimum wage to beat the price caps that have been set by Wal-Mart. Such leads to an adverse effect on the productivity of the employees, thus, making Wal-Mart model of no good use to the American economy. Wal-Mart serves to encourage high consumption patterns amongst the citizens of the United States. The idea of the price being cheap pushes people to buy more, thus, pushing the concept of an impulse for a bargain.

Wal-Mart seems to have an iron triangle between the government of the United States of America, China and the company itself. The donations that are made by the company to the Republican party seems to encourage the low road policies that are promoted by the political party and further serves to protect the company from being questioned on what they ought to do about environmental protection and proper organization of their business model.

Wal-Mart does not provide health insurance for their employees and such leads to the increase in the number of working population who continue relying on the government to provide them with medical insurance. Most of the children of staff working for Wal-Mart have to depend on Medicaid. While the company employs those it employees, the effect that it has in forcing the local retail firms to close is detrimental. The pressure that the company further provides to the government is also evident in the tax breaks that they are granted. Despite being given tax breaks, the company does not offer any insurance or contribute to sustainable social initiatives that compliment what the government needs to provide. Such leads to the burdening of the taxpayer despite the billions in profits that the company makes annually.

The environmental sustainability standards of the company are relatively low with the company investing lesser in reducing environmental degradation. Currently, many corporates are taking an initiative to minimize the deleterious effects that the company has to the environment. With the United States of America being part of the businesses that ratified the Paris protocol, there is a commitment that is needed from the American companies to be environmentally sustainable in their operations. Though there are fewer Wal-Mart stores that are using solar, the majority of the shops are not energy efficient. Additionally, the nature of packaging that is used by the company increases the quantity of solid waste that is generated into the environment since they are plastics, thus, not biodegradable.

In conclusion, the business model that is employed by Wal-Mart is not suitable for America. The business model is only of benefit to the shareholders and the owner of the company. The company is pro-China and has once testified against the United States of America in a trade dispute involving the two nations at the World Trade Organization (Ezell and Global Innovation Policy Director 5). Additionally, within the regions in which Wal-Mart has established a business in the United States, the smaller retail firms either tend to close shop or reduce the price of their products which results in them paying lower wages. The poor payment that is often below the minimum wages that have been set by the government is an ethical business practice that should not be encouraged. Local firms should have the benefit of promoting the economic status of the United States in the global realm instead of benefiting the economic progress of the rival countries. By importing about 70% of the total goods that they sell on their shelves, the economy deficit between the United States of America and China continues to widen on a daily basis (89). Currently, the trade deficit between the two countries stands at $200 billion, a gap that can only be closed by improving of the volume of exports from the United States to China and reducing the imports from China (Morrison 409). However, Wal-Mart does the reverse.

Works Cited

Brea‐Solís, Humberto, Ramon Casadesus‐Masanell, and Emili Grifell‐Tatjé. “Business model evaluation: quantifying Walmart’s sources of advantage.” Strategic Entrepreneurship Journal 9.1 (2015): 12-33.

Chan, Anita. Walmart in China. Cornell University Press, 2011.

Courtemanche, Charles, and Art Carden. “Supersizing supercenters? The impact of Walmart Supercenters on body mass index and obesity.” Journal of Urban Economics 69.2 (2011): 165-181.

Ephraim, Philip Effiom. “John Hoberman, Age of Globalization.” International Journal of Communication 8 (2014): 3.

Ezell, Stephen, and Global Innovation Policy Director. “Written Testimony to the United States International Trade Commission.” (2015).

Morrison, Wayne M. “China-US trade issues.” Current Politics and Economics of Northern and Western Asia 20.3 (2011): 409.

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