Being a developing economy, local traders fear that a behemoth like Walmart would put them out of business. Also, the Indian government is not in favor of large multinationals foraying into India with 100% foreign ownership and is only willing to allow a maximum of 51% ownership by any retail multinational. Its business idea of operating multi-story retail
They have shown this by closing a few stores in a higher-crime-rate area because they were losing money, by only offering a very limited amount of health-conscience and organic products because they are high margin items and by declining to donate to the local food bank because of worries over lost revenues. Company Q is not displaying an obligation to its stakeholders; particularly the customers, community and employees by not maximizing a positive impact through ethical and philanthropic actions. In order for Company Q is improve their reputation they need to take on a socioeconomic approach to social responsibility. This approach focuses not only on profits but on the benefit of the business to society. Company Q can improve their social responsibility in three areas; customer satisfaction, community outreach and employee trust.
So when these domestic companies are getting a steady flow of customers and income, they no longer have any need or incentive for improving the quality of their products. Even if the companies wanted to improve upon their product, the only way they would be able to do so, is by removing taxes on foreign products. But by not doing so, they are rejecting new ideas into their companies and are basically just promoting isolationism since they are refusing to work with other countries and allow them to ship and sell their products freely in the States. This isolationism will cause things like unemployment because when we are refusing to work with other countries, anything related to foreign business is negatively affected. It is also necessary to allow foreign products to come in so competition will increase.
If it were not for the protection of patents, big companies, with their robust capacity, would surpass the small business entrepreneurs in speed and cost of production and thereafter suppress them completely. However, the excludability that patents impose on non owners of the inventions does not see capacity. This helps small business entrepreneurs to practice their own inventions while big companies remain hands-tied. ii) Revenue from licenses, sale or infringement. Licensing ones technology to others is another good way of making money.
CASE – Wal-Mart’s Foreign Expansion Do you think Wal-Mart could translate its merchandising strategy wholesale to another country and succeed? If not, why not? Yes and no. The reason why I say that is because it depends on which country Wal-Mart wants to penetrate. As the case says, Wal-Mart didn’t succeed very well in developed countries, such as Germany and South Korea because they preferred higher quality merchandise and didn’t care about the discount strategy.
On the other hand, banning unpaid internship opportunities is not effective because if business could not afford to provide internships, young graduates cannot gain experiences and provide positive externalities to the society. This contradicts to government’s initial intention. Upon analyzing this market failure, I will focus on other possible methods to solve it and maximize the potential benefits of these merit goods in my final paper. Clifford, Winston, “Government Failure vs. Market Failure: Microeconomic Policy Research and Government”, Jstor. Web.1 Ebook.
It makes since, instead of always wasting the sales person time. If everyone is going to be going into stores just to check barcodes and see where they find the product cheaper or even shop online all the time it doesn’t make sense for a company to be paying employees for unnecessary work. Or work their not able to do at all. It will save the company money instead of paying for such big space that not a lot of consumers are going to. The only downfall I see or disadvantage I see is depending on where those lower rent locations are because some uppity people don’t feel secure in lower rent locations.
There is a failure to realise that long term better economic welfare also means general higher standards of living, as people have enough money to buy everything they need and some of what they want, competition is rife so drives quality up and prices down, and the government are able to take in more taxes from firms who are much healthier financially. This mass employment may lead to more jobs, but the workers themselves or the way they’re used is hugely inefficient. Another reason that labour production in the UK is so low is the lack of competition. There is a strong body of evidence that competition enhances productivity. So, with a lack of one there is a lack of the other.
In fact, those “growing” companies are not truly “growing” because that even if they are still making profit, they are losing consumers and market at the same time. Especially those companies who owns irreplaceable resource and products for now, they should have a clear cognition that no product is indispensable forever. In addition, companies always narrow themselves to a limited area so that it is hard to have extraordinary improvement in their products. In order to keep their competitiveness in this rapidly developing age, asking for trouble is necessary so that companies will be pushed to develop products to reach higher level of consumer satisfaction. It is important to focus on customers and customers’ needs instead of just persuading customers to make the exchange.
The larger expenses coming along with high quality and services render salespeople a disadvantage when talking to their clients for business. The standards of performance (SOP) set for extra compensation seem unrealistic, with 75% of salespeople earning no commission in the first half of 1992, and so conceivably, fail to motivate them. This makes the result control less effective as they failed to evoke the desired behaviors – achieving sales targets. Together with other offers by competitors, this resulted in high turnover rate. Profit Sharing - Result controls may serve well with congruence between employees’ and company’s objectives, but employees take for granted the law-required 10% profit sharing of the company’s income and so their motivational effect seems little.