Walmart Case Study

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| 2012|
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Businesses are expanding globally. This report in chapter formats outlines about the strategic decision of the company Walmart in retail industry.|

Table of Contents

Chapter 1 - Summary2
Chapter 2 - Introduction3
Chapter 3 - Environmental Analysis5
Chapter 4 – Motivation for international business7
Chapter 5 - Foreign Country Selection for expansion8
Chapter 6 - Foreign market entry mode selection9
Chapter 7 - Conclusion10
Appendix A12
Figure 1 - Internal Environmental Factors12
Figure 2 - PESTEL Analysis of Walmart13
Figure 3 - Porters 5 Forces Model14

Chapter 1 - Summary

The market forces are dynamic and push the companies for making some strategic decisions. These strategic decisions are crucial when they involve heavy investment and effort. One of the means the businesses expand is by means of entering into foreign markets. This report will discuss about the largest retailers of United States market “Walmart” which plans to enter Australia which is a new foreign market. This move by Walmart is not devoid of speculations and expectation of success and failure. Various factors influence in making a decision for a firm to enter a new market such as current and potential size of market, level of competition, legal and political environment, socio-cultural environment, GDP per capita and, purchasing power and rural/ urban distribution of population. It will also discuss about the methods adopted by Walmart to enter the new market and study patterns. A number of factors have to be taken into consideration before making a move in foreign country as the legislations, competitors and socioeconomic differences exists in each country. Overall, this report will identify the methodology of Walmart of entry in Australian market and describe the forces that may influence in entry of new market place. It will also look into the economic situations of Walmart home country and analyse the advantages of going international while being operating already in diverse markets.

Chapter 2 - Introduction

Walmart is the largest multinational company in retail industry (Cullen and Parboteeah, 2008). Walmart retail store was started by Mr Sam Walton in 1945. He began his career as J. C. Penny management trainee. In infancy of the Walmart store Mr Walton leased a Ben Franklin franchised in Arkansas, United States of America. He kept on struggling in retail industry and by the year 1962 he owned the store under the name of Walton 5 & 7. In the same year he with assistance of his brother James opened the first Walmart Discount city in Rogers, Arkansas. In 1970 Walmart went for public offering at the time when its sales were scoring at $44 million and had 18 stores under its umbrella in small and medium sized towns. It grew to 276 Walmart stores by the year 1980. The commitment of Waltons’ in retail industry gave them consecutive successes. In United states alone Walmart operates approximately 700 discount stores together with 610 Sam’s Club, 900 and 2,900 super center that are involved in selling groceries and general merchandise (Walmart). Walmart has been growing since then. Sam’s Wholesale club was introduced by Walmart in 1983. The company signed a joint venture in 1987 with Dallas based supermarket chain and started Hypermart*USA. The next acquisition move was witnessed in 1990 when Walmart acquired wholesale distributor company McLane. In 1992 founder Mr Sam died but the company expanded its operations in Mexico. The year 1994 marks acquisition of Woolco Stores by Walmart in Canada. It carried on with the international expansion and by 1996 it entered in China, followed by Germany in 1997, carried forward by acquisitions in Brazil in 1998. Interspar hypermarkets in Germany and ASDA group in United Kingdom were also acquired in the year 1998. In 2000 it started selling house hold appliances at selected...
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