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Why has Walmart viewed international expansion as a critical part of its strategy
Walmart's Global expansion case
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Question 2 How does expanding internationally benefit Wal-Mart? What factors drove Wal-Mart to start expanding business across national borders? At the first, Wal-Mart only operates its business in home country. However, Wal-Mart became more integrated and independent by expanding internationally. In 1991, Wal-Mart start expands the business at international level which includes 26 countries outside of the United State such as Mexico, China and Canada. Now, Wal-Mart totally has more than 6100 stores in foreign country. The step taken by Wal-Mart is to improve and maintain their achievement outside of the home country. Wal-Mart’s strategy which expands their market at international level gains a lot of benefit to their business. 1. Expand domestic product in large market By expanding internationally, Wal-Mart can promote their domestic product and services at international market as whole. It is more advance compare depend only at one country. Customer came from variety of the country in the world which makes the business which led to the increasing the growth of the product and services itself. This is referring to the Wal-Mart where their product and services are totally known by lot of the country in this world. Buyer power has increasing by the expanding of the business at international level. 2. Practice the …show more content…
Wal-Mart is facing a significant global competition from Ahold of Holland, Tesco in the UK, and Carrefour from France. Carrefour, the world's second-largest retailer, is perhaps the most globalized- in 2006, it generated sales outside of France for more than 50% from the pioneer concept of hypermarket operated in 26. Regard to the annual sales in that year, Wal-Mart produces less than 20% as compare to Carrefour from its international operations. However, this means that there was room for significant global
Wal-Mart, a "Big-Box Retailer" employs more than 2.1 million associates worldwide and has two-thousand seven-hundred stores in the United States with many more in Argentina, Brazil, Canada, Central America, Chile, China, Germany, Japan, Korea, India, Mexico, Puerto Rico, and the United Kingdom, making Wal-Mart the largest retailer in the world. "Wal-Mart accounts for upward of 30 percent of U.S. sales, and plans to more than double its sales within the next five years" (Lynn 29-36). Why is Wal-Mart so successful, and is Wal-Mart actually bad for America?
In 1962, Wal-Mart opened their first store in Rogers, Arkansas. In 1970, Wal-Mart's first distribution center and home office in Bentonville, Ark. open and Wal-Mart went public on the New York Stock Exchange. Just nine years from that, Wal-Mart's annual sales exceeded one billion dollars. In 1988, Wal-Mart super centers opened across the country. In a merely three years from that, Wal-Mart opened their own store in Mexico City, Mexico; making Wal-Mart an international corporation. Not even sixty years has past, and yet, Wal-Mart is over-powering our country.
According to Smithson, Walmart can expand its markets to new and emerging markets especially in the third world countries, which can significantly increase its revenues. Secondly, the company can reform is employment practices and improve the quality standard and in doing so, attract more customers and improve its brand image. On the other hand, the company faces threats such as the rising healthy lifestyle trend I that the company in most cases does not provide customers with healthy goods. At the same time, the company can capitalize on this aspect and increase its revenues. Aggressive competition from other discount retailers such as Target creates a great threat to the company (Smithson, 2015).
Walmart is bad for America, as some say. The Globalization essay that was handed out in class had many good points. It states that Walmart puts many smaller businesses out of service. A recent study by David Neumark of the University of California at Irvine and two associates at the Public Policy Institute of California, "The Effects of Wal-Mart on Local Labor Markets," uses sophisticated statistical analysis to estimate the effects on jobs and wages as Wal-Mart spread out from its original center in Arkansas. The authors find that retail employmen...
The simple question, is Walmart good for America. My classmates whose views differ from mine are more concerned with a few individuals that Wal-Mart may have had an adverse effect on. These people are only a small part of what makes up The United States of America, this question is for the greater good of the country not a few individual who need to better adapt to changing times. Wal-Mart is good for America, because it keeps us involved in world trade, sustaining our economy, the corporation is groundbreaking constantly, applying new innovations and efficiencies, and it keep the interests of the consumer to heart.
Wal-Mart has had a significant economic impact on the US, as well as the economies of countries that have relations with the US. Wal-Mart is the world’s biggest company of any kind, with 80 percent of the households in America purchasing something from the superstore; it is the nation’s largest retailer. Wal-Mart’s continuing price reduction has given Americans the advantage of being able to afford 15 to 20 percent more than they previously could. (Hansen) In a world governed by globalization and greed, competition has become rigid; as a result firms like Wal-Mart have utilized advanced marketing strategies to insure that they are on the ‘neck’ of competition, and are the core deciders of the market. (Ortega) However, Wal-Mart made decisions that were of a disadvantage to aspects of the economy, including the depletion on a small scale of Small Town USA.
With its headquarters in Bentonville, Arkansas, Wal-Mart was commissioned in the hands of its founder Sam Walton. Generally, the Wal-Mart effect is structured in a manner that it aids economic experts to evaluate attached global and local economic effects to the famous Wal-Mart retail. The term Wal-Mart effect is often employed by analysts to refer to the wide variety of both negative and positive influences of the retail business (Hiltzik 1). Evaluation of the retail’s effects is significant as the business is not only a key figure is the world’s economy but also it is arguably the most performing private economic retail. Briefly, Wal-Mart has conventionally caught the eyes of consumers since it not only boosts their experience by suburbanizing local shopping but also it avails low commodity prices for necessities (Neumark, Junfu, and Stephen 406).
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
The top two reasons for such success in ranking first in retail store market, is because Wal-Mart is convenient globally and so are there prices in the competitive market . Wal-Mart has three segments which are superstores, discount stores, and Sam's Club stores, all of these are scattered in the United States, Canada, Mexico, Europe, Brazil, and Asia. One downfall was from Sam's club because too many were opening all over internationally it decreased the number of customers per location. Overall despite the company's decline on Sam's club sales, the Corporations did well over all with the figures brought in and conditions.
Wal-Mart now operates retail stores around the globe in three different facets: Wal-Mart Stores, Sam's Club, and International.
Wal-Mart Stores Inc. is in the discount, variety stores industry. It was founded in 1945, Bentonville in Arkansas which is also the headquarters of Wal-Mart. Wal-Mart operates locally as well as worldwide. It operated 1209 discount stores, 1980 super centers, and 567 Sam’s Club by January 31, 2006. It has also extended its operations to many international countries. It runs its retail stores in two forms: Sam’s Club and Wal-Mart Stores. The Sam’s Club sells assorted product lines such as hardwares, electronics, jewelry, and to mention a few. The Wal-Mart stores also offer similar products in addition to the following: health and beauty products, apparel for women, men and children, household appliances etc (www.yahoo.finance.com). The Vision Statement, Mission Statement, Values and Code of Conduct, Corporate Governance: Directors, Executive Management, Committees and Stakeholder will be the key elements that will discussed in this report as it relates to Wal-Mart. In addition to that, the major trends in the general/macro environment and industry will be analyzed.
Today Wal-Mart servers around 130 Million people world wide and it has employees over 1.3 million people across the globe. They have been increase in growth of sales over 11% which amounted $6.4 billion US dollars. The earnings of the Wal-Mart are far ahead of its French competitors Carrefour although it is having its branches in 32 countries it earning and saving far behind. With wide range of suppliers the Wal-Mart has it has been one of the successful retail chains in the world today.
Wal-Mart and Target are two similar global corporations. If one asks each of these store’s customers why they shop there, somewhere in their answer one will find them saying that they can find everything. The difference between these two corporations is their mission, marketing, and quality. Each of these stores are looking to offer a different experience despite selling similar goods. So, when profits are not changing in the United States, they’ve opted for an expansion into other countries. They have opened stores and provided services outside of the United States.
The first Wal-Mart was opened in Rogers, Arkansas, in 1962. By 1969 it was incorporated into Wal-Mart Stores, Inc., and in 1972 went public on the New York Stock Exchange. The company grew steadily across the United States, and by 1990 was the nation's largest retailer. In 1991 and 1994, Wal-Mart moved into Mexico and Canada respectively. By 1997 it was incorporated into the Dow Jones Industrial Average. As of 2005, Wal-Mart has stores in the United Kingdom, and Puerto Rico, and brings in revenue of close to 300 billion dollars a year. In 2006, Wal-Mart invaded the China and India's markets. During the last two decades, Wal-Mart has been able to take advantage of the rise of information technology and the explosion of the global economy to change the balance of power in the business world (Wikipedia, 2006). Today Wal-Mart continues to grow and their success is not only from their sound strategic management planning but also from its implementation of those strategic plans. In other words operational planning has been an important key to their success.
...because it will affect shareholders interests if company not doing well their business. This paper discussed the reasons why Wal-Mart doesn’t doing well in global market. The main reason that Wal-Mart faced currently is internal and external problems. The internal problems included management and employees’ conflicts, while the external problems are suppliers and environment conflicts. These conflicts may cause Wal-Mart loss shareholders’ confidence to invest in their company and company’s share price also will affect. It will cause Wal-Mart difficulty to fight with their competitors in global market and spread their business to new market. To avoid these problems arise, Wal-Mart should find some solutions to resolve the conflicts. So that Wal-Mart can maintain a good relationship with their stakeholders and shareholders rather than break their relationship.