An Assessment of Nigeria as Potential Market for Wal-Mart Stores, Inc

Topics: Nigeria, Hypermarket, Wal-Mart Pages: 11 (3781 words) Published: February 2, 2010
1.0Introduction
This report aims to examine Nigeria, a country Wal-Mart stores, Inc. is looking to invest, in order to identify opportunities and threats in the proposed market and to ascertain whether or not to proceed with investment plans. This report contains an analysis of Wal-Mart stores and its identified strengths and weaknesses, as well as the risks it will face and opportunities it has in the proposed host country which have been identified through macro and micro environmental analysis the country. Based on findings from the analysis, recommendations will be made to management and the end of this report. 2.0Methodology

A qualitative approach was adopted for this report and data used were obtained from secondary sources including reports, journal articles, online sources and textbooks. Supporting tables and charts used for analysis have been included in the appendix. This report adopted the use of SWOT analysis to audit Wal-Mart’s existing strengths and weaknesses and to investigate potential strengths and weaknesses as identified in the findings of the host analysis. SWOT analysis is a model for developing marketing plans. It assesses what an organisation can do (strengths) and cannot do (weaknesses) in addition to the organizations favourable and unfavourable conditions otherwise known as its strengths and weaknesses. SWOT analysis is based on information gathered from the organizations internal and external environment (Ferrell, et al., 1998). PEST analysis was used to examine the macro environment of the host country. This analysis looked into the political (legal), economic, socio cultural and legal factors of a country’s macro environment. The micro environment of Nigeria was examined using Porter’s diamond of competitive advantage. This theory explains why certain companies and industries are able to perform better in some nations than others and attributes it to four basic reasons including factor endowments, demand conditions, relating and supporting industries and firm strategy, structure and rivalry (Porter, 1999 cited in Hill, 2009, p. 189). 2.1Company Analysis: Wal-Mart Stores, Inc.

2.1.1.Company Brief
Wal-Mart opened its first store in 1962 but was incorporated as Wal-Mart Stores, Inc. in October 31, 1969 in the United States. It presently has about 8,158 retail units in 15 countries and the number keeps increasing. The company’s sales for 2009 fiscal year is $401 billion and its employees and associate worldwide are over 2.1 million (Wal-Mart, 2009). Wal-Mart is the largest multinational retailer in the world, both in retail value and number of outlets (Euromonitor, 2009). Best known for low pricing and a vast array of products, Wal-Mart sells everything from food, clothing, footwear and accessories, consumer electronics, toys and game, cosmetics and toiletries, sporting goods, furniture, home furnishings, etc. Most products as well as online music and films are sold through its website, Walmart.com. 2.1.2. Wal-Mart’s Objectives, Strengths and Weaknesses

Objectives
Wal-Mart’s main objective is to save people money so they can live better by providing high quality products to customers at the lowest prices. Other objectives include investing in emerging markets due to saturated local market in the USA and adjustment of operations to enable the launch of smaller stores in various locations (Wal-Mart, 2009). Strengths

Wal-Mart is known to provide high quality goods at low prices, shopping convenience and ability to offer a wide range of products from a single outlet. This is good for the Nigerian market because Nigerians tend to shop in places where everything they need can be obtained at the same time and Nigerians look for low prices and high quality. Also, substantial growth and global expansion has given Wal-Mart international recognition and a highly esteemed reputation. Another strength that Wal-Mart has is that large scale operations and profits would enable economies of...

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Central Intelligence Agency, 2009
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Encyclopaedia of the Nations
Hill, C.W.L., 2009. International Business: Competing In the Global Marketplace. New York: McGraw-Hill/Irwin.
Library of Congress – Federal Research Division, 2008
Nigerian Bureau of Statistics, 2009. Home Page [Online] (Updated Nov 2009). Available at: http://nigerianstat.gov.ng/index.php/ [Accessed 24 Nov 2009]
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