Major International Opportunities for Wal-Mart - Research Paper Example

Research Paper, Management Wal-Mart Major international opportunities for the Wal-Mart Wal-Mart is an American multinational retail company. It has a chain of large warehouse stores and departmental stores throughout the world. From the time it has launched its first international store in 1991 its revenue generation from international market is continuously increasing day by day. It First international store was opened in Mexico in a joint venture with Cifera. Wal-Mart made a slow expansion in Brazil. This slow expansion builds a strong base of Wal-Mart stores in this region with an increased productivity and profits. Wal-Mart entered in Britain, Germany, Canada, and South Korea by the acquisition of existing retailers. Wal-Mart transferred its logistics, information and management expertise in those countries. In Argentina, China the company established its own stores. For all these moves the company had more than 1200 stores beside US. The international expansion of Wal-Mart increased its economies of scale from its international buying power. Many international companies are the main suppliers of Wal-Mart. They are been in the global operation for a long time. The company gives a huge discount than the local operator of those regions. By this the company is gaining its market share and huge profit. The internet based software of enabled the company to have control on its global operations, pricing, profit etc on the daily basis. Wal-Mart has also got expansion opportunities in India. It follows the Best Price Modern Wholesale stores with a joint venture with Bharti. It maintains the process of cash and carry, business to business wholesale structure of giving service to small business. From this the firm is getting the opportunities of learning about the small retailers and the challenges of supply chain. International strategies should the firm employ Wal-Mart should implement a multi domestic strategy focusing on the responsiveness of the local people and their requirement in each of the markets. It can sell customized product according to the need. Strategies related in maintaining Wal-Mart culture is very important for its success. Presently the company attracts its customers for its low priced products. But the people who are very brand conscious and obsessed with quality usually do not shop from Wal-Mart. So for targeting those customers Wal-Mart can stretch its business a little and create a department which will satisfy those customers by providing product of good brands and high quality. Presently Wal-Mart has a huge opportunity for entering in the Asian and European market. For introducing it in this market Wal-Mart should focus on the strategy of expanding its product range to cater the vast needs of the individuals. Before entering into large market with numerous varieties of products Wal-Mart should made and develop its strategies regarding the technology and the operational system of the company. It should also focus on those international markets which have fewer competitors. Wal-Mart should give priority in developing its political strategies as the company is facing problem in entering some of the countries of the world for some political reasons. Development of effective political strategies will help the firm to enter smoothly in other countries. Development of strategies related to price, culture etc of specific countries will help to raise the profitability of Wal-Mart. The company needs to send its executive and managers in the local community to know their customers in a better way. The anti unionization strategy of Wal-Mart needs to be relaxed for allowing its employee in organizing themselves in a union. Greater emphasis on its domestic or international opportunities Wal-Mart was established in USA in 1962. From that time it has grown rapidly and developed the most efficient retail distribution system. Till 1990 the company has made a major growth in US market. But after that Wal-Mart found its growth becoming very limited inks. Serving for a long time in US market it became very saturated. So Wal-Mart decided in expanding its business in the international market. From 1991 it started expanding its retail chain business slowly into different parts of the world. The company should have a greater emphasis on the international market. This is because Wal-Mart has already acquired the US market. But globally it has not reached many countries as of now. So many totally untouched markets are waiting for Wal-Mart. Many of the product suppliers of these international markets are the main supplier of Wal-Mart in other countries. This will help Wal-Mart for establishing its business globally. Moreover the large market of Asia, Europe and some other countries will provide economies of scale to the company which will add profit to the business. The company has realized that it did not expand its business internationally then other retailers of the world will beat Wal-Mart. The company is presently facing a strong global competition from many other retail firms of the world. So if Wal-Mart can’t establish itself properly in the international market then it will lose is profitability and popularity where as other retailers will capture the global market (Stoner and Winkle 74-77). Expected major changes Wal-Mart will do some major changes in its business in the coming years. It will start investing in e commerce by investing approximately $1 billion. E commerce is becoming very popular day by day. So it will attract more customers to this business that prefers online shopping. Wal-Mart will increase its store size throughout the world. Due to its modernization it will have a large format store growth. Wal-Mart will also update its guidance of capital expenditure. This will result in the opening of few new stores in many important market of Wal-Mart around the world. The company expects that its capital expenditure and square footage will range in between $3.8- $4.1 billon & near about 10 million square feet respectively. The company will expand its next generation to reach its customer in faster and efficient way for fulfilling their needs. It will be a dedicated distribution center, fulfillment online center and ship from store locations which will be tried by one of the efficient & biggest transportation system in the country. Wal-Mart will also form new fulfillment centers in China & Brazil. Wal-Mart’s expansion plans in many more countries and organizing business according to those countries need is one of the important expected changes in Wal-Mart (Fraser 20-24) Wal-Mart’s position in next five years The sales growth of Wal-Mart is becoming harder day by day after the great recession. In the past couple of years stores sale have been very low, near the flat line. For seven years of struggling in U.S stores Wal-Mart will go to introduce itself in online stores. With the starting of the online grocery store the company will provide the option of home delivery. This service can change the consumer awareness about the brand. So by this the company can regain its position in the market. The business of groceries is low margined. So the rivals of Wal-Mart like Amazon.com are also taking initiative to deliver groceries. But Wal-Mart has the advantage like it has its distribution centers almost throughout the world. Its expertise technology can give Wal-Mart a huge business growth. Its vendor managed inventory system, data forecasting its supply demand is helping the business to achieve its growth. More over Wal-Mart is presently expanding its business to different countries of nation. So it is getting a new market full of varieties of customers. With this rapid expansion the company will soon reach its peak and become the leading brand in retail industry. The company has all the tools of ideas & experiences. It just needs to launch them in the next phase of the company’s growth. Works Cited Fraser C. Business Statistics for Competitive Advantage with Excel 2013: Basics, Model Building, Simulation and Cases. Charlottesville: Springer Science & Business Media. 2013. Print. Stoner. J. and Wankel. C. Managing Climate Change Business Risks and Consequences: Leadership for Global Sustainability. New York: Palgrave Macmillan. 2012. Print. Read More