Walmart's Prospects of Entering Singapore

Topics: Supermarket, Singapore, Wal-Mart Pages: 11 (3701 words) Published: December 18, 2012
Walmart was founded by Sam Wilton. He founded it in 1962, and incorporated it in 1969. According to the Fortune Global 500 list, Walmart is the largest retailers in the world. Also, it is the biggest private employer, with over two million employees. Walmart is a family owned business. It belongs to the Walton family. It have 8500 stores in 15 countries all over the world.

Singapore is located in a small island in the south East Asia. It has a dense population of 5.183.700 in 2011. There are four major races in Singapore; they are Chinese, Malaysians, Indians, and Singaporeans. Its economic view is free market. Also, Singapore has very strict laws and they love to enforce them. It is a democratic country and acquired independence in 1965 and since then, it has achieved political stability and high economic growth. It is the second richest country in the world. Today, Singapore is known as one of the important financial and business hubs of the world along with Hong Kong.

Singapore is the most modern South-East Asian country and it has a 100% FDI. Hence, Singapore is easily the world’s easiest country to conduct business. The emerging markets alone rose by 19% in 2007.The foreign companies benefit greatly from the government aids provided by this country. I have listed some of the aids that WalMart will find beneficial if it invests in Singapore. :- 1. DEI ( Development and Expansion Incentive.):- DEI is nothing more than a tax incentive. This ,“ provides preferential co-operate corporate tax rates on all qualifying profits above a pre-determined base within a set period” (-Singapore). This gives WalMart the benefit of tax liability deduction. The only clause of DEI is that WalMart has to generate significant economic benefits in Singapore. 2. Investment Allowance:- This is another tax incentive. Investment Allowance is a capital allowance that reduces the costs of equipments that either apply new technology or increase the efficiency of the operations. If WalMart has to buy any types of equipment that has never been used before ( in Singapore), WalMart should consider applying for this incentive to get a tax exemption. These equipment may include high-technology devices or equipment that can improve the efficiency of its operations. 3. Regional Headquater Award:- This is only applicable if WalMart wants to set up a regional headquarter in Singapore or use Singapore as a base to monitor activities in other countries in the South-East Asia. It provides (1) tax incentives or (2) grants to foreign investors in order to help them succeed. However, the assistance provided by this scheme is customized to ech individual company’s needs. * The government of Singapore makes it easy for the foreign investments to find a llocation to set up their businesses. Depending, on what WalMart’s market strategy is it can locate itself in the following places. : 1. If WalMart decides to go into retailing only and not the manufacturing sector then, I personally think it should invest in the Business parks of Singapore. There are three business parks here. :- International Business Park, iPark and Changi Business.

2. If WalMart decides it wants to be placed near suppliers, like the food suppliers, then the Food Industrial Parks within the Specialized Industrial Parks. is the best location for WalMart. The options WalMart has in this case are. :- MacPherson and Tuas.

3. If WalMart wants to set-up a regional headquater in Singapore, a combination of both Business Parks and Specialized Industrial Parks may be a good idea,

4. The last option WalMart has is it opens more than one store in Singapore, it can have some grocery stores in Business Parks and others in Specialized Industrial Parks.

* The chart below shows us the...
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