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Walmart

Extracts from this document...

Introduction

Wal-Mart Stores, Inc. Wal-Mart: Global Expansion Strategy Table of Contents A. Introduction B. Wal-Mart Stores Inc. 3 3 1. The Adolescence of Wal-Mart 3 2. Channel of Distribution 4 3. The Financial Facts and Figures 4 4. Unique Expansion Strategy 6 5. Corporate and Management Culture 6 C. The Competition in the United States 7 D. Wal-Mart's Global Strategy 8 E. Expansion Target: France 9 General Overview 9 Retail Industry Overview 9 Macro Environmental Analysis 9 External Factors 9 Micro Environmental Analysis 12 Porter's Five Forces Model 12 SWOT 14 Feasibility Study 17 Recommendation 18 F. Expansion Target: Israel 19 General Overview 19 Retail Industry Overview 20 Macro Environmental Analysis 20 External Factors 20 Micro Environmental Analysis 25 Porter's Five Forces Model 25 SWOT 27 Feasibility Study 29 Recommendation 29 G. Conclusion 32 H. References/Sources 34 I. Appendix in Book 2 Wal-Mart: Global Expansion Strategy A. Introduction In the last couple of years, a number of major changes took place in the global hemisphere. Countries, earlier committed to tight governmental control of their economies, have redirected their political concepts and initiated drastic reforms in order to facilitate trade. The world has arrived in the global market place, at least in some terms. Not least because of new technologies like the Internet that is about to mark the beginning of a new era of international business relations. The challenges an entity faces by forming a strategy to participate in 21st century's global economy, that is, to be competitive at a worldwide stage, are intriguing to discuss and shall be the objective of this paper. Both authors share the opinion that the world's largest retail chain at present, the Wal-Mart Stores, will be a very interesting company to examine, since Wal-Mart already took a few steps, i.e. countries, towards its global appearance. To begin with, let us take a closer look at this famous company's profile. ...read more.

Middle

However, French government is also often influenced by strong domestic interest groups, which can result in limiting the market access of U.S. products [9]. France government have imposed many legal restrictions to open up new supercenters and hypermarkets to safe guard its traditional small corner shops, beauty and heritage of the country and other environmental factors. This can leads to significant barrier of growth for supercenters and hypermarket segment of retail industry. The domestic market has also have become saturated for supermarkets and the slower economic growth and presence of some of worlds largest supermarket chains, with some strong local companies has lead to fierce competition in this sector. With arrival of Euro competition will increase in near future. France is known for its fashion, perfumes and stylish People have quality of life and enjoys high living standards are often driven by brands names instead of prices. Wal-Mart: Global Expansion Strategy RECOMMENDATION: After evaluating the Macro and Micro Environment of France with regards to its retail industry and doing feasibility study, the authors have found out that even when France seems to be a very attractive market to be in, it has certain hidden legal barriers for retail industry and especially in superstore segment and fierce competition exists and that will increase more in near future with introduction of Euro. Moreover buyers attitude and purchasing habits are not strategically fit for Wal-Mart concept of "Low Cost Leadership". Therefore, the authors holds the opinion that its not the right moment for Wal-Mart to expand its operation right away in France, especially when it has just entered into Europe through acquisition of another retailing company. Wal-Mart needs to see and access how competitors would going to react to the situation as the company would have to face same competitors in France also. Therefore Wal-Mart should take Germany as not only its entry point to Europe but also as a testing point for its performance in the European Market. ...read more.

Conclusion

Appendices/Sources [1]: Wal-Mart's Annual Report 1998 [2]: Arthur Thompson, A.J. Strickland, 1998,"Strategic Management: Concepts and Cases",10th edition, Irwin [3]: The New York Times, March 5, 1999 [4]: Calmetta Coleman, "Retailers' Sales Surpassed Expectations in January", The Wall Street Journal, February 5, 1999 [5]: Calmetta Coleman, "Retailers' Sales in February Surged on Strong Economy", The Wall Street Journal, March 5, 1999 [6]: Laura Liebeck, "K-Mart kicks off '99 with brand initiatives", Discount Store News, January 25, 1999 [7]: Calmetta Coleman, "K-Mart's Profit Increases 90%, Beats Forecast", The Wall Street Journal, March 4, 1999 [8]: http://www.hoovers.com/features/industry/retail.html [9]: http://www.state.gov/www/about_state/business/ com_guides/1999/europe/france99.htm [10]: http://www.state.gov/www/background_notes/france_9803_bgn.htm [11]: http://web.lexis-nexis.com/universe/form/academic/univ_cntryprof.html [12]: Ernst & Young, "The Euro and its Consequences", http://www.business-ineurope.com/gb/them/0fra002.htm [13]: Ernst & Young Guide France: Labor Force and Employee Benefits [14]: Supermarket News, v48, n20, 980518, p. 12 [15]: "Management Global Retailing", Financial Times London, December 4, 1998, p. 13 [16]: FirstSearch on the Web: Database 'WorldscopeS' [17]: Hoover's Company Capsule - Promodes: http://www.hoovers.com/capsules/92393.html [18]: http://www.smsmedia.de/jdp/projects/euroconv.html [19]: http://www.business-in-europe.com/gb/them/0fra001.htm [20]: Ernst & Young Guide France: Foreign Investment [21]: Financial Times London, November 5, 1998, p. 7 [22]: http://mena-peacenet.nist.gov/Dosfan/Israel/Complete.htm [23]: http://www.state.gov/www/background_notes/israel_1298_bgn.html Wal-Mart: Global Expansion Strategy [24]: http://www.us-israel.org/jsource/Economy/high97.html [25]: Business Middle East, April 29, 1998 [26]: Business Wire, March 22, 1999 [27]: Globes, February 2, 1998 [28]: Market Guide Comparison Report on Super Sol [29]: National Home Center News World Power Supplement, June 22, 1998, p. 36 [30]: Globes, January 8, 1998 [31]: Financial Times London, February 6, 1997, p. 23 [32]: Emily Nelson, "Wal-Mart Net Rose 21% in 4th Period", The Wall Street Journal, February 17, 1999 [33]: Market Africa Mid-East, December 1, 1996, p. 3 [34]: Euromarketing, November 12, 1996, p. 5 [35]: Supermarket News, March 30, 1998 [36]: Ernest Beck, "Germany's Metro Meets Expectations Amid Major Restructuring at Retailer", The Wall Street Journal, February 11, 1999. [37]: "French Retailer Tells Consumers They Can Trust Its Prices Under Euro Currency" Euromarket via E-mail, May 1,1998 [38]: http://www.cbs.gov.il/israel_in_figures/manpower.htm [39]: http://www.holidayfestival.com/israel.htm [40]: Allan Richter, "U.S. Chains find Partners in 51st State", Chain Store Age Executive, November 1998 [41]: "Gauging Global Opportunities", Supermarket News, September 7, 1998 ...read more.

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