Negative Effects of Big Box Commercial Stores

Negative Effects of Big Box Commercial Stores

Outcome # 2

The first outcome has an important task of analyzing the numerous case studies. The case studies highlighted the important information related to the negative affect that big box commercial retail companies can have on their local communities. The case studies are effective in providing the insight on the current scenario as well. Extensive research has indicated big-box retail stores have caused a downward spiral effect of many adjacent small business owners. According to Economic Impact Analysis, a comparative analysis involving 20 case studies of local merchants versus chain retailers, the findings were substantive. In each case study, their short run effects suggested great advantages as the big boxes offered numerous jobs and raised the property value of that specific location. However, the long run negative effects (increased local unemployment, distressed properties, and community taxes) far outweighed much, if not all, the positive effects they initially offered (Alfaro, 2004).

It is clear that the economic conditions have a strong correlation with the scope of the retail sector in the country. In those countries, where the economic conditions were good, the retail sector was able to have a positive impact. Though, the same case was not there with those countries that were facing a recession period. The reason is that these countries did not have an attractive retail sector. They were facing losses because the customer demand was not strong in the economy. This resulted in the less purchase of goods and services that affected the business transactions of the retailer to a very large extent. The business cycle of the economy is usually cynical in nature but the recession also takes place at one point or another (Desai et al, 2008).

Foreign Direct Investment plays an extraordinary role as a major economic driver of globalization. For many developing countries, FDI is an important element in their strategy for economic development. Foreign investments help ease the transfer of technological and business know-how that are needed for growth in these countries. Moreover, FDI increases job opportunities, improves labor productivity, and provides developing countries access to foreign capital. To obtain the aforementioned FDI benefits, several developing countries implemented policies and strategies aimed at promoting and attracting FDI while other countries abolished trade and investment costs, improved human capital and infrastructure facilities. This was the case seen in many countries as they worked hard towards the implementation of the proper policies in the retail sector (Choong & Lam, 2011).

The solution has certainly been recommended by many economic experts in order to address the problems related to downward trend in the economy. The World of Champs needs to assess the economic factors for making a much better decision for the foreign investment in the countries. The big box commercial stores have faced a negative impact because of the certain economic indicators. However, it is vital for all the companies in preparing their plan in accordance with the economic ...