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Wal-Mart’s Political and Legal Environment

Shameka Lemon

American Public University

BUS310: Business Theory,

Linda Mae Ashar

6/7/2020
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Wal-Mart's Political and Legal Environment

Walmart is the leader of physical wholesale and retail. Despite being the king,

competitive pressure has continued to rise with time. Other USA and non-USA apart, e-

commerce also poses a significant challenge to Walmart. Walmart has grown and expanded its

business internationally. Its international expansion strategy has augmented its revenue from

sales. One of Walmart's thriving market is China, which is critical to its sustainability. However,

Walmart faces political and legal opportunities and threats as well. This paper discusses and

integrates the legal and political environments of Walmart both in its domestic (USA) and global

markets.

Political Environment

Political forces are crucial for Walmart, especially when expanding to international

markets. The global business landscape is characterized by an array of different governance

models and political structures. The governments of the world are not equally open to

international business and trade. For example, the Asian economy is growing rapidly, but

Walmart has only been able to set up 28 retail stores in India and 438 in China (Wang, 2020).

These figures are very low compared to the USA figures. This is mainly because the political

environment of such countries is not quite friendly for Walmart. In India, for instance, the red

tape and complex regulations are considerable obstacles to foreign businesses and investments.

Such an environment is not welcoming for global retailers such as Walmart. The political

climate and structure of every market and country affect business operations. Political stability

encourages economic stability and stability in the business environment, where success is highly

likely (Cross et al., 2009). However, when political disruptions are dominant, the business is

affected by frequent disruptions to supply and sales, which is the problem Walmart faces in India
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and China (Stecher et al., 2018). Political turmoil in both countries disrupts the supply chain as

well. Political disruption in these countries also translates into trouble for Walmart. For instance,

Walmart has failed to understand the discerning Chinese customers whose purchase decision are

not always price-driven. Ownership issues are also politically motivated and controlled.

Legal Environment

There are different laws that retailers are mandated to comply with. Failure to comply can

breed poor reputation and financial loss. Since it was founded, the largest count of lawsuits are

related to the labour force. From low wages to discrimination, different types of legal issues

continue to worsen the situation for Walmart, both in its domestic environment and global

environment (Stecher et al., 2018). However, in recent years, the retailer has focused on

improving the working solutions for its workforce. Yet, labour-related issues are still common.

Law is a pertinent factor since legal pressures result in loss of business, financial loss, and

substantial fines.

Regarding the laws that affect Walmart and the retail industry as a whole, there are some

noteworthy ones, and they apply to both the USA and Chinese markets. Foremost, truth in

advertising is required. Violating this law results in hefty financial penalties. Moreover,

consumers are allowed to pursue punitive damages when they are wronged via deceptive

advertising (Cross et al., 2009). Walmart has faced many cases regarding false advertising, and it

has faced the court numerous times. Consumer protection laws also affect the retailing industry.

Misleading market campaigns are prohibited. Additionally, misleading discount prices are also

discouraged, and Walmart has been a significant villain of indicating incorrect prices on its app.

Such violations usually welcome class-action lawsuits again the retailer.

Conclusion
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Walmart is a household name on a global scale. It is also one of the most affluent retailers

in economic history. It has expanded fast, with more than 11,000 stores in 27 countries and e-

retail websites in 10 countries ("Our Business", 2020). Such popularity and rapid expansion

means Walmart must stay up-to-date with the most recent political and legal regulations.

Nevertheless, it risks shutting down, as it has done in countries such as Germany, China, and

India, among others.

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References

Cross, F., Miller, R., & Cross, F. (2009). The legal environment of business (pp. 360-546).

South-Western Cengage Learning.

Our Business. Corporate - US. (2020). Retrieved 6 July 2020, from

https://corporate.walmart.com/our-story/our-business#:~:text=Walmart%20operates

%20approximately%2011%2C500%20stores,million%20in%20the%20U.S.%20alone.

Stecher, A., Kenny, B., & Bank Muñoz, C. (2018). Walmart in the Global South: Workplace

Culture, Labor Politics, and Supply Chains. University of Texas Press.

Wang, S. (2020). Walmart China : Walmart History. Wal-martchina.com. Retrieved 6 July 2020,

from http://www.wal-martchina.com/english/walmart/history.htm.