Wallmart
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EXECUTIVE MEMO
Wal-Marts must focus on growth by building a high quality, low price brand in the new markets of South Africa and Australia by using its established retail knowledge capital and expertise.
This strategy is recommended because Wal-Mart is:
Facing increasing competition in local markets where already established
Loosing market share in these new territories due to increasing presence of suppliers (from China and India) in these emerging markets
Not maximizing potential and new revenue from access to these new markets
Not leveraging access to new goods and product raw materials
The priorities are to:
Conduct feasibility study and due diligence in recommended regions to establish mode of entry
Mobilize resources for entry
Execute entry to plan
Timeframes: 1.5 years
Budget: 350 Million USD
FIRST STAGE: CASE ANALYSIS
Identify the issues/problems
The following issues and potential problems have been identified:
Managing and coordination across a multinational organization
Competitive pressures of emerging companies, countries and territories (such as China, India, Russia, African states)
Retention of market share and/or customer share of wallet
Store and product branding protection and standardization
Innovation and cross-region pollination of new systems, methods and techniques
Knowledge management retention and development of personnel within regions
Leveraging of executive and business intelligence systems for easier decision making
Integration of multiple systems and technologies while maintaining technology as a core competitive differentiator
Management of large asset and property base
Growth and creation of presence in emerging countries including risk analysis systems
Staff retention schemes and people management strategic issues
Acquisition and purchasing policy for entry into new countries
Customization and tailoring of products to meet the customs and traditions of customers within countries.
The pros promoting the effectiveness of Wal-Mart include:
The organizations ability to entrench an awareness, create ownership and build a culture of adding true sustainable value to a countries economy, by generating new opportunities to in turn promote economical growth.
Building an economy of retailers with regards to Wal-Marts use of conceptual frameworks, intellectual capital, structures and networks of funding possibilities from across regions.
Generating a successful track record in the countries, where established, with successful ventures and remaining entrenched in the country as a dominant player
Promoting itself in building a supportive and loyal customer base by customizing its offering to the local conditions
Wall-marts ability to generate sustainable revenue streams that allows them to fund new growth.
The cons detracting Wal-Mart from effectiveness include:
Sustainable distribution and supply chains within countries become increasingly difficult to manage and implement
Wal-marts cultural clashes and impacts to promote itself outside of the immediate affiliate network sufficiently to aid in the generation of sustainable funding.
Local conditions, regulations, compliance and traditions are key factors which hamper growth.
Trustworthy and capable existing retail chains able to become Wal-Mart caliber stores seem limited within territories.
Analysis of the data (using all the tools remember Dupont financial ratios, “pest” and “swat” “four-factor”, “five forces”, industrial, product and here in IB nation “life cycles”?)
2.1 PEST Analysis
Political
Wal-Mart not always correctly politically aligned creating difficulties in expanding into new territories
Threats from political instability in regions creating losses
Alignment of partnerships from non-present in-county organizations tends to create greater risk than those that have vested interest of success within the county where they have presence.
Can be very adaptive and inventive to new ventures and entry to new markets
Its people policies can leave much criticism as it prefers having savings in investing in a flexible temporary workforce as opposed to permanent workforce. This practice may not be well received in all political circles although can be argued to create more employment
Economic
Certain territories pose greater risk in investment stability due to the nature of the economic climate and conditions
Civil war and political turmoil affects operations and investments
With growth Wal-Mart able to cross subsidize other ventures and assist ailing parts of the business
Competitive pressures and attacks within territories tend to be squashed by ingenious means to place direct and indirect competition
Social
Must customize processes to local customs and traditions -tends to be to forceful
Clash of company culture with acquired or partner companies create initial