...* Executive summary. Walmart is a United States based multinational retail store. Walmart Thrive by dominating the retail market and providing broad quantity of product at a low cost. Walmart’s has repeatedly proved its successful company strategy in many occasions. This Global retail giant have burgeoned almost in all countries where it expanded with very few exceptions. To reinforce its global expansion process Walmart acquired 51% of Massmart, South Africa second biggest retailer. Although the merger of this two large firms unfolds Walmart’s way into one of the world’s biggest potential market it won’t be simple. Poor legal system and weak securities, cultural and infrastructure barriers, financials, rivals criticism, resistance from local group and government will hinder the merger process. Walmart needs to be prepared to face these challenges and develop a strategy. In order to deal with the challenges Walmart should: 1. Learn from previous mistakes in North Korea and Germany. 2. Make use of high GDP growth in Africa and rising middle class. 3. Use Massmart successful network. 4. Create a positive Brand and company name. 5. Do what it is best at “dominate retail market” * Section 2: External environment: Walmart and Massmart are a big part of global discount retail industry. Walmart is one of the world’s biggest retail industry operating in 14 different nations...
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...I. INTRODUCTION The mission statement for Walmart is a simple statement to focus on consumer needs. “We save people money so they can live better. If we work together, we’ll lower the cost of living for everyone we’ll give the world an opportunity to see what it is like to save and have a better life”(Walton S.) Walmart’s company culture includes a list of values and beliefs it establishes through its management and employee relations. The company’s marketing efforts are to establish awareness that they are the price leaders in their market. In recent times, the company has focus on becoming involved more in local communities by charity and service. With the general instability of the global economy, corporations like to play it safe; Walmart is an example of a multinational which is making a bold move. Acquiring South African grocery chain Massmart offered Walmart a safe foothold to prepare for the next step, which is continental expansion. South Africa is arguably the most westernized country in Africa. Western companies in general perceive it as easier to do business there than in other African nations. II. SWOT ANALYSIS The SWOT analysis of Walmart shows that the company can have higher long-term success potential through aggressive global expansion, especially in retail markets in developing countries. Strengths: Walmart’s strengths are all related to the size of its business. These strengths enable the company to withstand threats despite its weaknesses. Walmart’s...
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...Case Analysis Walmart’s Expansion in Africa: A New Exploration Strategy Submitted by: Pharin Chhodarangsey (Kevin) 001MG715 Date of Submission: November 4th, 2015 Submitted to: Dr. Rachaniphorn Ngotngamwong 1 Table of Contents I. Introduction 3 I. 1 Company Background 3 II. Case Analysis 3 1. Detail the growth of Walmart and its international experience. 3 2. Describe the growth strategies of Massmart in the African Continent. 5 3. Detail Walmart’s acquisition of Massmart and expected strategic advantages.5 4. Analyses the challenges Walmart have to face in the African Continent. 6 5. What happened to Walmart’s operations after taking 51% share in Massmart in 2011? 7 References 2 I. Introduction I. 1 Company Background Walmart Stores, Inc., is an American multinational retail corporation that operates a chain of discount department stores and warehouse stores. Headquartered in Bentonville, Arkansas, United States, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. (Winston-Salem Journal, 2010) From the humble beginnings as a small discount retailer in Rogers, Ark., Walmart has opened thousands of stores in the United States and expanded internationally. Through the model of business global expansion, which brings the right store formats to the communities that need them, Walmart are creating opportunities and bringing...
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...1970 – With 38 stores open, Wal-Mart enjoys $44.2 million in sales. The company also opened its first distribution center in 1970 in Bentonville, Ark. 1972 – Wal-Mart is listed on the New York Stock Exchange. For two years before it was listed on the NYSE, shares in the company were traded over the counter, meaning that brokers directly bought and sold the stock from one another. 1977 – Illinois becomes the tenth state to have a Wal-Mart store. 1983 – The first Sam’s Club, the company’s first members-only warehouse store, opens in Oklahoma. The new club is setup to compete with Costco, which first opened for business customers in 1976. 1987 – Wal-Mart celebrates its 25th anniversary. After 25 years in business, the company boasts some 1,198 stores with $15.9 billion in sales that year. 1988 – The first Wal-Mart Supercenter opens in Missouri. Those stores, which now encompass some 109,000 to 220,000 square feet, contain a traditional Wal-Mart and a supermarket. 1990 – Wal-Mart becomes the number one retailer in the United States, with some $26 billion in sales. Wal-Mart also purchased grocery distributor McLane Co., which was sold to Warren Buffett’s Berkshire Hathaway in 2003. 1991 – Wal-Mart opens its first international store in Mexico City. The company also continued to increase the number of Sam’s Club by merging with The Wholesale Club Inc. of Indianapolis. Those 28 stores were then integrated into the Sam’s Club chain. 1992 – Wal-Mart co-founder Sam Walton dies at...
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...UNIVERSITY OF THE WESTERN CAPE FACULTY OF ECONOMIC AND MANAGEMENT SCIENCE SCHOOL OF BUSINESS AND FINANCE MANAGEMENT 324: EMPLOYEE MANAGEMENT ASSIGNMENT 2: LABOUR RELATIONS IN THE RETAIL INDUSTRY Student Name Student Number Effort Allocation INSAAF GASANT 2533029 80% DEIDRE SCHIPPERS 2846533 10% DUMISA MQIKELA 2864231 10% 2.1 The Key unions in the Retail Industry a) Brief history since 1970 Saccawu is the largest union in the retail industry on the basis of the number of workers it represents. Saccawu (South African Catering and Commercial Workers Union) was founded in July 1975 at the beginning stages of the famous Durban Strikes. As an affiliate of Cosatu (Congress of South African Trade Unions) the union was first named Ccawusa (Catering and Commercial Allied Worker Union of South Africa) because of the African ring to the name, which was highlight of the commitment to serve the workers of Africa. Ccawusa was started under the support of the NUBW (white registered National Union of Distributive and Allied workers). Other Unions in the sector were predominantly white-male dominated, Ccawusa appointed Emma Mashini as the union’s first organiser. This was to send a message to the industry that Ccawusa aimed to oppose gender inequality and racial discriminations in the workplace. By 1977 Saccawu received its first recognition by Pick ‘n Pay and slowly introduced black cashiers. In 1981, the first industrial action against Allied Publishing took place...
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...Walmart’s Acquisition of MassMart | Resources & Capabilities – Retaining Marketshare | | | | | | | INTRODUCTION Companies are always looking at ways in which they can increase their share in the market. Increased market share for a company means that it can operate within its industry with minimum exposure to threats from competing firms in the same industry. For companies to achieve this growth, they need to constantly review their strategies to ensure that their resources are efficiently utilised and that their processes and procedures are streamlined and free of bureaucracy. These companies also need to ensure that they are continuously looking at methods in which they can improve the ways in which the business operates as well as the continuous improvement of their services or products. This type of improvement can be achieved through innovation which will enable specialized and diversified services and products. It is important that the strategies behind these levels of change still deliver value to the customer as well as the shareholder through effectively reducing costs and maximising profits. Companies that get these winning strategies right, and correctly implemented, are almost guaranteed to outperform their competitors and achieve year on year growth. The past 5 years has been tough for most companies globally. This is due to the recession. The financial sector was one of the sectors that was most hurt during the recession. Because...
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...Massmart Holdings Limited (Massmart) is a South-African based global investment holding company. The Group is invested in a broad portfolio of wholesale and retail formats and rely mainly on high volumes and low cost distribution of branded consumer goods on a cash-basis. In 2011, Walmart Stores Inc. acquired Massmart for $2.4 billion ending months of uncertainty about the status of the deal. Walmart is known for bringing about lower prices and as such, economists feel that this merger will be good for competition and giving South African consumers additional choices along with competitive low prices. For South Africa as an economy, this sends a positive signal to the rest of the world in augmenting South Africa’s image as an investment destination for foreign companies. Massmart operates in 12 different countries in sub-Saharan Africa and are organised under 4 primary business segments. These are: Massdiscounters (general merchandise discounter), Masswarehouse (Warehouse club), Massbuild (Home improvement retailer and building materials supplier) and Masscash (which consists of wholesale food and cosmetics businesses as well as retail food outlets). Warren Buffett, Chairman and CEO of Berkshire Hathaway Inc., and his Vice-Chairman, Charlie Munger, outlined four criteria for a great company of which I will base my analysis of the Massmart Group on. These criteria are now popularly known as Buffet and Munger’s “Four filters” invention. They are: 1) Understandable products/services;...
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...Walmart’s Expansion in Africa: A New Exploration Strategy Introduction/Objectives: Follow the footsteps of several large enterprises, WAL-MART is trying to expand into the African market. The Walmart was founded by Sam Walton. And the most famous point for company is the “ Every Day Low Prices ” This world's largest retailer proposed $23 billion acquisition of South Africa Massmart holding share company. The Massmart is the third largest retailer enterprise on the Johannesburg stock exchange. Africa, owns many popular brands, such as Game, Makro (Makro), Dion wired, Jumbo and Builders Warehouse and so on. Massmart annual income in Africa area was up to $60 billion. It operates in 13 countries, and for Africa operates 290 stores. Massmart provides access to Africa market as the perfect springboard for WAL-MART for America retail giant through taking control of the company, so as to WAL-MART ranks among the three major retailers Africa is easy. WAL-MART have a great influence in the enterprise. The company annual sales is more than $4000 billion a year, almost is the two times of the South African’s GDP ( $2270 billion). As the world's largest retail enterprise, WAL-MART can make very simple global retail price plan. It is extremely successful business model is based on low price strategy, although the price prospects for consumers may be very attractive, but from the general direction,suppliers, retail labor and groups will lose. Critical Issues/challenges...
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...Walmart: Global Strategic Expansion - Executive Summary Since introducing its first international store in 1991, Walmart has transformed itself from an American retail giant into a global one, leveraging a wealth of resources to strategically expand operations. Although Walmart must contend with several formidable competitors, the retailer has successfully opened thousands of stores across the globe; most frequently, it has added international units through the acquisition of foreign retailers, which simultaneously reduces its competition and furthers its dominance. Walmart has differentiated itself by coupling its understanding of political, economic, legal, and cultural systems within target markets with its low-cost, high-quality approach to mass retail. Utilizing simultaneous strategic multiple thrusts, Walmart has developed layers of competitive advantage to establish itself as the world’s leading retailer. Focusing on strategic expansion, Walmart currently operates 9,826 stores across twenty-eight countries, allowing it to capture global scale efficiencies by creating a coordinated and integrated network of interdependent stores. Each unit within its network is regarded as a source of ideas and capabilities, and innovation is diffused across the company through initiatives such as a market-by-market training program that helps increase the company’s responsiveness to local demands and preferences. Thus, Walmart has established itself as a transnational corporation by developing...
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...International Analysis of Walmart 8/11/2013 International Operations Walmart is a Multinational Entity (MNE) that has 10,800 stores in 27 countries. The countries of China, Japan, India, UK, Nigeria, Ghana, South Africa, Uganda, Tanzania, Zambia, Malawi, Mozambique, Botswana, Namibia, Lesotho, Swaziland, Argentina, Chile, Brazil, Costa Rica, Nicaragua, Honduras, El Salvador, Guatemala, Mexico, US, and Canada represent Walmart’s influence globally. Walmart employees 2.2 million people worldwide with 1.3 million in the US alone. At the end of fiscal 2013, Walmart’s domestic sales were $466.1 billion and international sales were 135 billion making Walmart number 2 on the Fortune 500 list of largest companies by revenue (Walmart, 2013). Walmart’s internationalization ratio is 29%, outlining the percentage of international sales of total sales. International sales, as a percentage of total sales, are up roughly 5% since 2010 when international sales were 24.7% of total sales (Walmart, 2010). Walmart’s international presence is growing through expansion and a more multinational mindset. Walmart espouses a multinational mentality. Although the company realizes the need to have an efficient business model, the thought is “we sell what customers want” meaning that Walmart treats the different regions of the world as local domestic markets (Pennsylvania State University, 2013). As Walmart enters emerging markets, obstacles arise with integration and expansion...
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...Financial statement of South Africa South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors and a stock exchange that is the 16th largest in the world. Even though the country's modern infrastructure supports a relatively efficient distribution of goods to major urban centers throughout the region, unstable electricity supplies retard growth. The global financial crisis reduced commodity prices and world demand. GDP fell nearly 2% in 2009 but has recovered since then, albeit slowly with 2014 growth projected at about 2%. Unemployment, poverty, and inequality - among the highest in the world - remain a challenge. Official unemployment is at nearly 25% of the work force, and runs significantly higher among black youth. Eskom, the state-run power company, has built two new power stations and installed new power demand management programs to improve power grid reliability. Construction delays at two additional plants, however, mean South Africa is operating on a razor thin margin; economists judge that growth cannot exceed 3% until those plants come on line. South Africa's economic policy has focused on controlling inflation, however, the country has had significant budget deficits that restrict its ability to deal with pressing economic problems. The current government faces growing pressure from special interest groups to use state-owned enterprises to deliver basic...
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...a tool to check and track the environment they are operating. Walmart uses the PESTLE analysis, which sometimes reffered as PEST analysis, is a concept of marketing principles . Moreover, this comcept is used as a tool by companies to track the environment they are operating in or planning to launch new product or service. PESTLE is a mnemonic which expanded form donates to P-Political, E- Economic, S-Social, T- Technology, L-Legal, and E-Environmental. Let’s see the few below for Walmart- • Political and Legal Environment Walmart donates to the governor but at times it still faces some huge problems like- locking up the employees in store at night, fake sustainability displays, gender discrimination, labor union problems, etc. Till 1998 no steps has taken towards the political aspect and in 2006 it rises up as the No. 1 corporate political contributor. Unstable government also caused hindrance in the path of company expansion. For instance- Walmart was unable to expand in South Africa due to unstable and no proper direction government. • Economic Environment Fortune Magazine named Wal-Mart the nation's most admired company. It now has more revenue and more employees than any other U.S. company. Wal-Mart's growth over the last decade is unprecedented -- the company has gone from being a successful discount retailer to being a dominant force that no other retailer can ignore. When recession hits US, Walmart is one of the few companies which are thriving. Slow economy...
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...long-term objectives, the company has three main goals: (1) overseas growth, (2) continuous adaptation and (3) sustainability 360 program. Certainly, the biggest objective is to even expand more so that overall profits can be increased. There is still plenty of room for growth and many untapped markets for Walmart such as huge parts of Europe, Russia and Africa. Due to the recession, more and more people seek merchandise at a very low price because most likely that is the only thing they might be able to afford. Walmart’s second objective is to (2) continually adapt to new cultures and traditions. The firm has faced many problems in the past when entering foreign countries by attempting to use an ethnocentric approach instead of slightly adjusting their management styles to the needs and wants of the new shoppers. As a consequence, this previously used strategy has forced the company to leave particular markets such as Germany and South Korea. In order to manage the situation more efficiently, Walmart plans to learn more about the actual country before entering in order to make sure that the plans will benefit both: the company itself and the host-country. Lastly, Walmart has introduced a (3) sustainability 360 program in February 2007 to strive for a greener and more environmental friendly leadership. Its three main goals are to be supplied by 100 percent renewable energy, to create zero waste in all operations and lastly to sell products that sustain resources and the overall...
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...Organizational Structure of Walmart Doshiemae Johnson MGT/230 Patricia Ford February 1, 2016 Introduction Walmart’s humble beginnings started in Rogers, Arkansas in 1962 by Sam Walton. Today, Walmart has evolved into a multibillion dollar company earning 486 billion dollars (Wikipedia.com (Entreprenuer, 2016) (Entreprenuer, 2016), 2015). Walmart is currently located in over fifteen countries and have over eleven thousand six hundred twenty stores (wikepedia.com). Their slogan is “Save Money, Live Better.” Walmart’s success could not have happened without strategic planning of the company’s business processes. These factors decide which organizational structure would be appropriate for the company to use. This paper will discuss the organizational structure of Walmart and their corporate processes that include marketing, human resources, products, and geographical locations. Organizational Structure Walmart’s organizational structure is divisional. Under this type of structure, each division has its own executive, which is the vice president. The vice president is responsible for their own budgets, advertising, and hiring (Bateman, 2011). Each division is given enough resources and autonomy to function alone. Unlike other organizational structures such as functional where divisions are departmentalized based on common job functions and matrix where both employees and managers from different company departments work together to achieve goals and solve problems (Bateman...
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...Building an International Company Name University Abstract An international company is any company that has its facilities and other assets in at least one country other than its home country. A successful company understands the meaning of competition which has caused them to actively fight for new markets, products, and services in order to sustain a competitive advantage. A company that has obtained success in its country of origin usually expands their services into the global economy to become an international business. These companies effectively control their financial and material resources by managing economies of scale, low cost production and fluctuations in currency. Human resources are also essential in the making of a successful company by recruiting talented individuals and encouraging innovation within the company. International companies can expand organically, which is a slow process that consists of building the business from ground up, or they can expand inorganically by buying out, or merging with, an existing business. If I had to create a new product idea, I would want to invent a new way to produce cheap efficient energy for the need of the masses. I would expand the company to international status using the inorganic global growth process. Due to advances in technology, and in today’s business market, most businesses have to compete globally. “These companies actively compete for new markets, products, and services in order to develop and sustain...
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