• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Globalisation of Wal Mart

Extracts from this document...

Introduction

Globalization To what extent has Wal-Mart's globalization program been successful? Introduction This essay will explore how successful Wal-Mart's (supermarket company) globalization process has been. In doing so the following areas need to be focused upon: - where they began, where they operate now, to what extent they have grown, the adopted strategies and the effectiveness of those strategies. Firstly we shall start by outlining the definition of globalization, it refers to when the world market of goods and services, and integration in world capital markets is increasing or growing. (Source: Complete A-Z Economics and Business Handbook). However it's also 'an umbrella word which includes a whole range of trends. Part of the process involves greatly increased trade flows' (Nuffield - Economics and Business). For the purpose of this essay we shall go with the first definition. Globalization occurs when countries exchange goods and services, capital is moved freely from one country to another and economies become more integrated, this is why countries are very dependant on each other. The key to a company growing is communication, as people become more connected and this allows information and money to flow quicker, due to new technology such as newsgroups and internet meetings, so goods in one part of the world will become available in all parts of the world. Globalization is the reason behind the growth of world trade and it has encouraged economic growth. ...read more.

Middle

We must now look to how affective the adopted strategies are: Walmart's growth has lead to an increased number of jobs amongst the worlds most biggest and powerful countries, offering these has favoured them also as they have more employees within their stores (meaning customers are seen to much quicker) they are also local (which means they are able to communicate with customers better) and not just this but their reputation for being a big company and solid provider of goods is improved. Wal-Mart has experienced globalization in a number of ways. In 1991, Wal-Mart had opened their first international store, this has grown to more than 1,500 stores in nine countries. Additionally, the company also owns 37.8% interest in Seiyu Ltd (a leading Japanese retailer). Wal-Marts acquisitions have been a key to their growth, such as taking over Asda in the United Kingdom in 1999, below shows the turnover and operating profit from 2000 to 2003 of Wal-Mart in the UK: Date of Accounts 31/12/2003 31/12/2002 31/12/2001 06/01/2001 07/01/2000 1 Turnover 13,325,700 12,188,000 10,731,900 9,744,600 4,395,000 2 Operating Profit 650,400 605,300 497,000 502,800 100,500 Operating profit is what is left over from the sales revenue after operating costs are deducted. There is an increase in both the turnover and operating profit, this indicates that growth is occurring in this Wal-Mart store. 'Owned by Wal-Mart Stores, the biggest company in the world by value, ASDA is the second biggest supermarket chain in the UK with 17% of the market share.' ...read more.

Conclusion

If Walmart grows too much it could cause diseconomies of scale. Additionally, when Walmart acquired Asda they had to adapt to their culture. All in all the advantages out weigh the disadvantages. For Wal-Mart to further their growth, they should implement the following: * Wal-Mart competes with giant supermarkets, however consumers don't always go to the supermarket, but instead their local convenience store. Therefore they should look to franchising their own convenience stores because they have a strong reputation of a market leader. Which in turn means franchisors will look to their name ahead of companies such as Londis, One-stop, or Jacksons. * Wal-Mart has a real competitive advantage within their core business. This gives them the advantage of investing in places with rapid growth. E.g. LEDC's that are experiencing vast economic growth. * Uphold their strong reputation through their constant advertising and willingness to offer a quality of service. Conclusion In conclusion Wal-Mart's successes have come with their ability to acquire businesses fast. They have been successful to the extent that there is nothing stopping them from going forward. The company is a prime example of inorganic growth due to the rapid competitive advantage they gained in the US. Which has been achieved by taking over businesses that require no start-up costs and are successful within their economy. In doing so, it's meant that they've gained total control, giving them the power to make all decisions for what happens to those businesses. ?? ?? ?? ?? ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Marked by a teacher

    Advantages and disadvantages of Globalisation. Need for development.

    4 star(s)

    Western countries have much lower tariffs with each other because they bargain each other's tariffs down. The 3rd world has had to beg for loans from the 1st world due to 3rd world debt.

  2. To what extent has globalisation been benefical to China's economic growth?

    Likewise, when such a large country increases imports, it drives world prices up. Simple economic theory explains this by supply and demand diagrams of products. If we use aluminium as an example, you can see from the graphs below, if supply of aluminium increase, than prices will fall.

  1. To what extent has globalisation created a 'borderless world'?

    day, 7 days a week with few protections for health and safety. Such incidents were highlighted in the tragedy in Bhopal, India, where an explosion at a Western Electric plant seriously maimed many workers. However, due to lax safety laws, Western Electric simply closed the plant, without having to pay any costs of the damage the explosion caused.

  2. To what extent and in what ways are the strategies of multinational companies influenced ...

    It is the flagship of the business; its epicentre. We will focus on two of the four validations, ownership and control and the people and the legal nationality. 1. Ownership and control is, predominantly, enforced and rested in the - "national hands" (Yao-Su Hu, Global or Stateless Organisations are National Firms with International Operations')

  1. Discuss Globalization.

    so as not to create a sudden and large increases in un-employment in localised areas. To protect strategic industries that the government feels it should maintain some degree of self-sufficiency in, or even as a short-term measure to allow a firm that has lost it comparative advantage due to a

  2. A Study of Globalisation - A study of multinationals and their effect on our ...

    labour rights, national sovereignty, the third world, and other various aspects of our everyday lives as human beings' (Graeber 2002). It is common knowledge that globalisation and free trade can affect developing countries negatively, however, the worlds most developed countries and the people who live within them are also affected negatively.

  1. Comprehensive Anatomy of China

    The most popular areas of study in China's colleges have been and continue to be within the engineering and science disciplines. Recently though, the fields of economics, law, medicine, and literature have been gaining in popularity. An additional development includes the rapid growth of Chinese students who choose to study abroad for their higher education.

  2. Give a reasoned definition of the term Globalisation

    This interaction has led to globalisation of and by economy. The actuality of globalisation can be understood by focusing on the two prime movers: 'new technology' and 'hegemony of neo-liberal values'. Certainly, the hegemony of neo-liberalism became especially visible and got an extra dimension after the end of the Cold War.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work