Wal-Mart’s Global Expansion
Sam Walton established Wal-Mart at Arkansas in 1962. It has grown dramatically over the last 40 years and has become one of the world’s largest retailers with the sales of $401 billion in a year ending Jan. 31st 2009.Wal-Mart has approximately 7,000 stores globally with 2 million employees. It is the largest private employer in Mexico and Canada with the employee figures hitting around 1.4 million in this region. It also operates 3,600 additional stores in 16 worldwide markets that include China, Japan, South Korea, India and United Kingdom. Wal-Mart does particularly well in Canada where they have a chain of 314 stores. In 2008, it had 92,284,000 dollars of gross profit. Wal-Mart serves its customers and members over 200 million times per week and ranked first among retailers in Fortune Magazine’s 2009 Most Admired Companies survey. Wal-Mart provides sustainability- focused products.
Wal-Mart not only provides jobs for senior citizens and students but also provide opportunities to build careers with competitive salaries. The retailer claims that 75% of its stores management team joined the company as hourly sales associates.
Wal-Mart has also got an impressive ethical policy which includes regular use of recycling products and creating almost zero landfill waste. The company also makes vast amount of donations to different local level charitable organizations every year for improving people’s lives, which made Wal-Mart a trusted organization for funding the community programs to address hunger, homelessness, education, job training and other basic needs. International Expansion of Wal-Mart and its Benefits
By 1990, Wal-Mart realized that the opportunities for growth in United States is becoming limited because of the saturation of the market and decided to expand their business globally. Their international expansion put a greater impact on international market and has changed the way business is conducted globally. It has also increased the benefits for the consumers as it helps them spend less money on goods they purchase. The company’s relationship with their key suppliers such as General Electronics (For appliances), Unilever (For Food Products) and Procter & Gamble (For Personal care products) is very good. All these suppliers are internationally recognized with vast global expansion and because of this Wal-Mart are able to demand deeper discounts from the local operations of its suppliers. Apart from these world renowned suppliers Wal-Mart also does business with more than 2,500 minority and women-owned business enterprises (MWBE). The result of this good relationship with suppliers means they can lower their prices to attract more consumers, gain market share and increase their profit margins in international market. Wal-Mart claims in its data sheet for December 2009 that its international business achieved 11.6% rise in sales for the whole financial year.
Except the profit and market share another benefit of international expansion for Wal-Mart is the flow of different ideas for example, a double-floor store in New York was opened because of the success of multi-floor stores in South Korea. Other ideas such as the layout of the wine department in Argentina have now been used into the layouts of company’s stores worldwide. Wal-Mart is also constantly trying to improve its reputation ethically and consistently helping over 100,000 charitable and community-focused organizations by providing financial and volunteer support. Retailer’s policy of buying fair-trade products in the international market is also attracting the attention of many consumers to shop in Wal-Mart. Risks When Entering Other Retail Markets
The idea of expanding internationally was initially jeered off and the critics showed that Wal-Mart’s style of trading only suits to an American market, which in other countries is not going to work because of the different market structure, people’s taste...
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