Walmart Inc. is an international retail leader that is engaged in retailing and wholesaling trade. The company is graded to being the retailing leader worldwide based on its resources, market share revenue, and resources which have given it the competitive advantage. The company’s success has been in particular acquired via the utilization of strategic procedures and marketing (Blackwell & Eppler, 2014). The company can best be described as a consumer-centric one given that it is mainly focused on fulfilling the needs of the consumers before maximizing profits. Despite the fact that the companies are facing competition from well-established companies from its markets globally such as Tesco and Carrefour the company has consistently maintained its position through differentiation, products diversity as well as cost leading approaches. The success of the company is mainly driven by the fact that the company is more oriented on enhancing its consumer’s lives by offering affordable and quality products. In order to sustain its values, the company consistently works on lowering its operating expenses in order to sustain its ability to sustain its advantage and attract more consumers. The retailing industry is growing rather rapidly, therefore, requiring companies to adopt strategic measures that are objected at acquiring efficiency (Blackwell & Eppler, 2014). This paper will be analyzing Walmart’s Expansion Potential opportunities and Threats through the utilization of PESTEL analysis and develop reasonable recommendations for the company’s expansion in Vietnam over Russia. Additionally supportive ideas as to why Walmart should prioritize to venture in Vietnam rather than Russia will be given based on the Macro analysis opportunities and threats.

            Opportunity Factors and Trends

            Economic Market Opportunity and Potential Growth:

The retailing market has created intensifying debates in regard to its potential to advance the business sector in the unexploited and emerging markets such as Russia, China, and Vietnam. This is a transformation that is being experienced globally and it is been demonstrated by research that despite the fact that the developed regions such as Europe and America are the leading in terms of retailing business growth but the development is however still which permits the developing markets in the Asian, Africa and other regions the opportunity of experiencing even higher growth (Blackwell & Eppler, 2014). From the success that is acquired by these companies from the emerging markets, it is apparent that there is more potential for market expansion. Research shows that the unexploited market globally is close to 90 percent which shows that in order to maintain the retailing leader Walmart should undertake the expansion venture (Blackwell & Eppler, 2014). Based on the experienced transformation and growth in the retailing market there are several standard features that were established in the electronic specialty retailing market.

To begin with, the products are becoming affordable due to technological development and the ease availability of manufacturing materials. The GDP of the growing markets is particularly low which implies that there is high reluctance in regard to market penetration by the retailing companies (Chekwa, Martin & Wells, 2015). The other feature is accessed, because of this countries despite having higher market potential in regard to buyer’s willingness and demand for products there is the restricted presence of retailing infrastructure beyond major towns or areas. This implies that those that are exposed to the retailing market are quite minimal given that the larger population is restricted by access. In this context, online sales are also restricted on the ground that the development of the necessary infrastructure is minimal. Awareness and familiarity are another standard features in the retailing market. In that despite the fact that the consumers are well informed about product development, there is limited awareness and familiarity in regard to the benefits that the products offer (Chekwa, Martin & Wells, 2015). In that, it is not all about informing the public of the affordable nature of the products because they need to be informed adequately about convenience, environment, price as well as accessibility benefits.

It is rather fortunate that the above scenario is developing a more consistent modification in regard to market development. The positive change is mainly driven by several aspects which are working collaboratively. To begin with, technological advancement plays a crucial role in creating awareness and building knowledge. In that most individuals are able to acquire information at ease in regard to products directly from the internet at the comfort of their mobile phones (Chekwa, Martin & Wells, 2015). Information access is part of creating familiarity and ensuring that individual’s interests and willingness to adopt the products are triggered. Technology advancement has resulted in lifestyle change because individuals are becoming more oriented on life’s quality, affordability as well as convenience. Second, the population demographics for most of the developing markets demonstrates that there are more age category groups with a higher partiality for consumption needs that needs to be addressed. Having accessible stores and serving providers fits well within this growing needs sector. For instance, research indicates that close to 70 percent of the global populace own mobile devices that are utilized for building knowledge as well as communication (Chekwa, Martin & Wells, 2015).  This shows that half of this populace is in need of digital entertainment which is bound to enhance life’s quality. This demand will consistently create markets for electronic or digital products that work to providing individuals with home or workplace entertainment thus creating superiority in life.

Affordability and accessibility aspects are directly related to the transforming monetary status as well as spending abilities in the developing nations. The pattern is particularly evident globally particularly in the emerging markets such as Vietnam and Russia (Chekwa, Martin & Wells, 2015). The consequent results of the crowing spending capability are that currently, most individuals even those in the low or middle level have higher capabilities of having enough money for convenient electronic products such as televisions, mobile devices, cookers and entertainment products including the portable ones. The stabilizing financial status in the developing countries along with affordability is creating more resources for enhancing and expanding the retailing sector. In that more and more retailing companies and stores are being opened by either domestic or foreign investor in the countries. For instance, most investors are recognizing the attractive and suitable investment environment in Vietnam which is facilitated by political and socio-economic stability (Lamb, Hair & McDaniel, 2012). The combination of these forces is facilitating the growth of favorable retailing markets because of the increasing consumer demand and spending capabilities in the markets.

However, it should be noted that despite the fact that while the disposable income is rising in the emerging and developing markets, individuals are bound to spend higher in retailing consumption but the spending is still low in terms of US dollars when equated with that of the developed countries (Grieves, 2010). It is therefore right to note that the retailing economic environment is transforming in a rapid and dynamic nature which is leading to the rise of globalization. In this context, consumers are mainly objected at purchasing from a diverse range of goods as well as services which assist them in making the most suitable options. Consumers in Vietnam are in need of a variety of products because they need to have better choices. Based on the recent reports it was established that 90 percent of the world’s population utilizes 20 percent of its income on electronic products annually while the spending in the developing markets is particularly lower (Chekwa, Martin & Wells, 2015). Therefore, the retailing companies should mainly seek to sell products that are characterized by lower prices in order to create high market opportunities in these markets.

The transforming technology and trends have additionally added to the increasing international trend in regard to the marketing of electronic products. There is an increasing need for electronic and particularly digital and entertaining products in the remote regions in the developing markets such as Vietnam and Russia. This is an inclusion of the population that is in unending need of electronic products knowledge. The existing geopolitical situation demonstrates that the retailing business is bound to experience 10 percent increase in the next three or so years. In relation to the increasing trend of individuals in the emerging markets, individuals are becoming more conscious in regard to product quality and prices while still trying to ensure that their lives become more superior (Lamb, Hair & McDaniel, 2012). Therefore, there is an increased marketing opportunity for electronic products for the large populace in general.

Based on a survey conducted in 2016 more than 50 percent of Vietnams middle and lower classes individuals utilize most of their income on electronic devices which equates to their spending in things such as food, clothing, and luxury (Grieves, 2010). Based on the domestic firm’s success that is involved in the retailing industry, it can be predicted that Walmart can rely on Vietnam for expansion as one of the potent emerging markets. Despite the fact that the political and socio-economic climate in Russia is favorable for economic development given that the country has been focusing on several projects it is obvious that based on its trade regulations and foreign restrictions Vietnam is associated with lesser threats. In 2016 its GDP was $202.6 billion which has expanded with about 5.7 percent during the first six months of 2017 (Grieves, 2010). The retail sector contributes to about 33 percent of the GDP which is expected to rise (Grieves, 2010). This, therefore, creates more opportunities for growth as well as expansion.

            Threat Factors and Trends

            Major Contributing Threat Factors: Political, Economic, Social, Technology and Environmental

            Business expansion is a strategic move that every business should take after analyzing the local surrounding. Expansion efficiency can never be acquired without mainly considering the external forces that affect the ability of any firm to be effective. Business expansion is not only characterized by increasing opportunities but threats also exist and should, therefore, be analyzed adequately. Some of the most critical forces that should be assessed include infrastructure, lifestyle, GDP, competition, government support, interests, and ideologies. If the economic stability of the country is low this, therefore, implies that the performance of the business will also be low (Hazzawi, Palladini & Martinelli-Lee, 2014). The economic status of the state and its physical and communication infrastructure are the central determinants of the performance of the business. The accessibility and efficiency of the supply chain are mainly fueled by the infrastructure and economic state. In that, the business will be necessitated to manufacture as well as distribute products to its stores so that the consumers can have access (Hazzawi, Palladini & Martinelli-Lee, 2014). The retailing industry being a major economic contributor is among the industries that are highly assessed by the government and therefore, it is the obligation of every business to focus on adhering to the set standards.

            Education, income status, and retail-related policies are a major consideration in operations. In that, the retail sector is mainly comprised of legal, environmental, health as well as ethical measures which plays part in determining supply as well as demand (Ireland, Hoskisson & Hitt, 2008). In this context, if a country has invested highly in education and economic development then the income level even for the low and middle-class individuals is quite significant. The spending level becomes high given that the disposable expenses are high. Regulatory changes are likely to occur which might be influenced by political, environmental or even industrial interests (Ireland, Hoskisson & Hitt, 2008). In this context, taxation system mainly affects the operation of any business in either a desirable or positive manner. For instance, the taxation rate for the foreign investment in Vietnam is quite favorable as compared to that of Russia. Through high foreign taxation Russia seeks to develop its domestic market to ensure that it acquires a favorable positioning in her global context. Investing in Vietnam is, therefore, more favorable for foreign retailers given that its revenue production might not be affected. In addition, the intention of the government is in support of development in regard to accommodating and valuing foreign investment (Ireland, Hoskisson & Hitt, 2008).