Wal Mart, Micro And Macro Environment

MACRO ENVIRONMENTAL ANALYSIS

External Factors

1. Political Structure: With the constitution of 1958, the French announced their Fifth Republic. The President is the head of the executive, elected for seven years. The President names the Prime Minister who is the nominal head of the executive. The legislative consists of two houses, the National Assembly (deputies are elected for five yearterms) and the Senate. The Assembly, however, has the last word in any disagreements. Various political groups build France’s political spectrum, the most important among them are the neo-Gaullist Rally for the Republic, the moderate Union for French Democracy and the Socialist Party. The current President, center- right-winger Jacques Chirac (elected in 1995) cohabits with a government of theleft, elected in 1997, under Prime Minister Lionel Jospin, due to a mixture of presidential and parliamentary elements in France’s political system. Nevertheless, both are strong advocates of the EU and support the EMU (European Monetary Union) which has implemented the new European currency, the EURO, for its eleven initial members on January 1, 1999 [9, 10, 11].

2. Economic Factors: Byexploiting its vast agricultural resources, France is, behind the U.S., the number two exporter of agricultural products in the world. Similar to the U.S., the two other important export sectors are defense products and services, which give France its rank as the fourth largest exporter worldwide. Furthermore, in terms of transportation and communications, France operates one of the most sophisticatedinfrastructures in the world. Among other factors, all this contributes to France’s position as the fourth largest economy with a GDP of US $ 1.5 trillion as of 1998 (one-fifth of U.S.), having grown at 3% in real terms compared to 1997. The GDP per capita in 1998 was at a well off US $ 24,165 and the inflation rate of 1.3% in 1998 was one of the lowest in the European Union (EU) [9, 10, 11].

3.Effect of EURO on Economic Structure in France: The EURO, adopted on January 1, 1999, by France and 10 other European countries, is the new single currency of the European Union (EU). A major economic factor for its implementation was to create one single European market in order to ease the large trade among its member states and to end the competitive devaluation within the market. The expectedbenefits are price stability, monetary stability, new trade opportunities within the single market and sound economic growth. However, companies, which operate in the member states, face some constraints. During a transitional period of 4 years the old currencies and the new EURO coexist and each company has to decide when and how to switch to the EURO. The modification or installation of computersystems, which are capable of dealing with the EURO, has to accompany that. Furthermore, commercial relations are to be redefined, as far as prices are concerned. The benefits for those companies will be reduced financial costs due to fluctuations of exchange rates

Euro also posses difficulty for retail industry as it makes it difficult for consumers to see differences in prices and determinewhether an item is expensive or not. Therefore, retailers needs to quickly take actions to clear their image and to make buyers feel that they are not been cheated.

4. Social and Culture Factors: France has rich heritage of art and culture, and is famous for its fashion, perfumes, and cuisine worldwide. An average French consumer is quiet sophisticated and very brand oriented and believes inlevish lifestyle. Lately, an increasing interest in American culture, younger consumers, and changing lifestyles are contributing to France’s import demand for food products from the United States. Generally, high quality food products with an American image can find a niche in the French market, particularly if they can gain distribution through stores and supermarkets that specialize in U.S. or...