TJX Companies Powerpoint-Business Environments

Political-Legal Environment of TJX Companies

TJX Companies, Inc. is an American company that operates in several entities. It is involved in offering a huge variety of consumer goods under different departments to a wide range of consumers. It was started in 1959 and its headquarters are in Massachusetts, USA. The company operates different brands like Sierra, TJ Maxx, and HomeGoods in the United States, Marshalls and HomeSense in Canada, and TK Maxx in several other countries. It is also one of the largest corporations in the United States by total revenue. The company’s legal and political environments are affected by laws and policies of the different countries of the firm’s operation and, therefore, it must conform to the legal and political conditions that can vary significantly from country to country. There are also barriers in the context of domestic and global political-legal environments in within the company operates.

Legal framework for contract enforcement is a local political factor that has an impact on the operations of TJX in the United States. The United States has stipulated rules and regulations that govern contract enforcement among business people as well as methods of resolving conflicts (Walker, 2017). The US government has intervened in the business environment and has provided lenient conditions for various stakeholders like consumers, suppliers, and manufacturers. The government has set up laws and regulations that allow TJX to grow and expand by protecting its property rights.

Globally, political stability is a factor that significantly affects TJX operations. TJX operates in multiple countries, overall political stability of which differs. Some of the countries where the company functions successfully include Canada, Ireland, USA, the United Kingdom, among others. Canada is politically stable, and is one of the countries where TJX has a massive presence. Marshalls, HomeSense, and Winners are companies under TJX operating in Canada and having over 245 stores. Winners was the first company under TJX to operate in Canada in 1990. The affiliate companies provide services to a wide range of consumers who are often attracted by discounts. As a choice of TJX market, Canada has a stable economy supported by the government. It is also involved in free trade agreements with several nations and is in the process of negotiating with more countries (Jenkins & Williamson, 2015). Most importantly, the country lacks terrorism and violence, making it ideal for international business. Canada also ranks high in government effectiveness in making laws that support business, import, and export. The aforementioned factors make Canada ideal for TJX company’s business operations.

TJX stakeholders must consider legal factors present in countries they wish to operate. The policies of the company are insufficient to protect the company and its workers, and therefore, it must incorporate these from the associated countries. Legal factors that affect TJX, particularly in the US, are discrimination laws placed by the government to ensure equal treatment of TJX employees and other stakeholders. The laws protect the employees and people involved in operations of the company from discrimination against race, gender, age, disability, sexual orientation, and religion (Khouja, Liu & Zhou, 2018). TJX must adhere to such rules to remain in operation. It must provide equal opportunities to interested and qualified persons regardless of their nationality, gender or age, failure to which it risks to be involved in litigations and closure. 

In addition, data protection laws, particularly intellectual laws, have an impact on the company’s growth. TJX, therefore, must look for countries with laws in place to protect patents and ideas of companies from being stolen by competitors. Canada, Ireland, and the United Kingdom are some of the areas of TJX business activity. The choice of the countries must have been government intervention in business and protection of trade privacy of a firm. In 2018, TJX filed a lawsuit against Sports Direct Company in the UK, claiming that the latter body had launched a brand with a similar name to TJX. The launched brand’s name was Brand Max, which would confuse customers according to TJX claims (Santamaria, 2019). The United Kingdom has a legal framework for trademark infringement that protects TJX from competitors. 

Taxation is the primary political barrier that affects operations of the TJX Company in the United States. As the company sells goods at discounted prices, taxes have a direct impact on the prices. There are trade wars between China and the United States that are likely to affect the prices of consumer products. In May 2019, the American administration raised the tax to 25% on goods imported from China (Miranda, 2019). The tax affected prices of a wide range of items and had a significant effect on off-price retailers. However, the taxation policy did not have a great impact on TJX as the firm has a flexible buying model. TJX sources its goods from different countries, giving it a variety of options. TJX and companies like Burlington and Ross, both with flexible buying models, are not immune to the Chinese tariffs per se, but they are not significantly affected.

Regulation in the service sector has a significant impact on TJX operations. Corrupt Regulation Sectors in different countries are barriers to entry of TJX. Corruption is a vice that can limit business growth. TJX cannot expand in African Countries like Somalia, greatly affected by corruption, for then, growth chances would be minimal. Corrupt countries usually lack a strong judicial system to curb the vice.

Laws about quality and prices are significant legal barriers to TJX trade operations. Countries usually have laws requiring international companies to sell goods and services that meet particular standards. The laws in the United States, Canada, Ireland, and the United Kingdom are lenient, and TJX can meet the set standards on prices and quality. Other countries, however, have high standards that TJX is unable to meet, especially in pricing. Being an off-price retail company, TJX can only operate in a country where the price requirements are in agreement with the company’s policy.

Import quotas are legal barriers limiting TJX’s business expansion. They impose a significant effect on the company by limiting the number of goods that can be imported at a certain time from a particular country (Ansoff, Kipley, Lewis, Helm-Stevens & Ansoff, 2018). Restrictions are usually on a first come, first served basis, and when the limit is reached, no more goods can be imported. The trade war between China and the United States has significantly affected the operations of TJX as there are few choices of countries to import goods from. The import quotas result in a shortage of products in the market, affecting prices. TJX is greatly affected as it is an off price store, and customers expect to pay lower prices. For instance, the US has an imposed quota on textiles imported from India and other countries, causing the prices to skyrocket.

References

Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., & Ansoff, R. (2018). Implanting strategic management. Springer.

Jenkins, W., & Williamson, D. (2015). Strategic management and business analysis. Routledge.

Khouja, M., Liu, X., & Zhou, J. (2018). To sell or not to sell to an off-price retailer in the presence of strategic consumers. Omega.

Miranda, L. (2019). As Stores Scramble to Deal With China Tariffs, Their Competitors Expect To Benefit. Retrieved 5 September 2019, from https://www.buzzfeednews.com/article/leticiamiranda/trump-tariffs-some-retailers-not-affected

Santamaria, B. (2019). TK Maxx owner in trademark dispute with Sports Direct. Retrieved 5 September 2019, from https://uk.fashionnetwork.com/news/TK-Maxx-owner-in-trademark-dispute-with-Sports-Direct,1052519.html#.XXDzfShKjIV

Walker, R. (2017). Maxxed out: TJX companies and the largest-ever consumer data breach. Kellogg School of Management Cases, 1-8.