Walmart Into France

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Wal-Mart expansion in France|
Management of International Business|
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Gemma Barlow 33246023|
Mahfuz Rahman|
12/17/2012|

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Plagiarism Declaration

I certify by my signature/printed name that this is my own work. The work has not, in whole or in part, been presented elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged and referenced. If this statement is untrue I acknowledge that I will have committed an assessment offence. I also certify that I have taken a copy of this assignment, to be made available upon request, which I will retain until after the Board of Examiners has published results.

Name: Gemma Barlow

Contents
Plagiarism Declaration1
1. Executive summary4
2. Country Analysis5
Political and Legal Factors5
Economic and Financial Factors5
Social and Cultural7
Technological and Infrastructural7
3. Analysis of regional organisation8
Infrastructure8
Education8
Economic Development8
Legal Issues10
4. MNE Analysis0
Company Overview0
Strengths0
Weaknesses1
Opportunities1
Threats1
What should the key strategy be?2
5. Industry Analysis3
Porter’s Five Forces3
Threat of New Entrants3
Buyer Power3
Supplier Power4
Substitutes4
Degree of Rivalry4
6. FMSS/Mode of Entry analysis and recommendation5
Acquisition5
Greenfield5
Joint Venture5
Dunning’s Eclectic Theory6
Ownership Advantage6
Location Advantage6
Internalisation Advantage6
Recommendations7

1. Executive summary
This is a brief summary of the main contents, findings, conclusions and recommendations in the report. The executive report contains enough information for a reader to become familiarized with what is discussed in the full report without having to read it. (Approximately 200 - 500 words)

2. Country Analysis
France ranks 29th globally in its ease of doing business, which is also the average rank for high income countries (The World Bank, 2012). When looking at Wal-Marts existing countries of operation, France ranks as the sixth easiest country, making it a relatively simple country to start doing business in. However this only considers factors of setting up a business such as obtaining electricity and trading across borders, and not factors specific to the retail industry. This section uses a PESTLE analysis to investigate further benefits and difficulties Wal-Mart will need to consider before opening in France. Political and Legal Factors

Company tax is lower in France, at 1.6% of GDP, then in the USA, 2.6% of GDP, meaning that a new business would be able to retain 1% more profits made in France (Estay, 2004). The French Government appointed a Mediator for corporate relations in 2010. This helps foreign companies to resolve any contractual disputes and will be beneficial in supporting new businesses (Howell, 2011). French businesses pay reduced Payroll Taxes on overtime wages, which will benefit Wal-Mart especially over busy periods such as Christmas whereby a large proportion of store colleagues will be working longer hours. Although the law reducing taxes on overtime has recently been abolished by François Hollande, France still has a very flexible policy regarding the 35 hour working week, making it easier for retailers to have full time employees working varied hours to fit in with store opening times (Willsher, 2012). France recently relaxed their planning permission restrictions so that businesses do not need permission for buildings that will be less than 1,000 square feet, which is the size of a small supermarket, in towns with under 20,000 residents (Wood, 2011). However, in order to build a larger retail unit, the proposal must be approved by a regional zoning board, which consists of 20 members, 9 of whom must be self-employed local business owners (Bertrand and Kramarz, 2001). Economic and Financial Factors

The French Labour Force is very...
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