Sample Essay

Currently, Wal-Mart’s employees consists of 80-85% temporary or contract workers which helps Wal-Mart avoid costs of medical care and other employee benefits, however in countries where labor laws call for strong unionization, it could strictly restrict Wal-Mart’s growth opportunities as unions call for better working conditions and hours, higher minimum wage rate and benefits even for contract workers. This could affect profitability as well as the company will now have higher expenses and obligations towards its employees.

The language barrier could make expanding into new territories and getting the promotional campaigns to attract the consumer base who would understand the benefits that Wal-Mart could offer its consumers because each country and language has its own understanding of how the language is used. As it further expands in new territories, Wal-Mart could face difficulty in distant areas where people are more closely connected to each other and do not have an idea about multinational firms abroad or sometimes even at home. Wal-Mart could face problems starting and operating supercentres there and also in raising brand awareness among consumers and promotion through below the line and above the line activities. Another important limiting factor could be the financial stability of the country where Wal-Mart wants to expand as is evident from the example of Asia where the company faced a problem due to Asian financial crises.

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