Wal-Mart Stores Inc, Suburbia in Mexico - Essay Example

? Marketing of the of the Number: the Paper: Marketing Introduction The essay elaborates the operation and work culture of two subsidiaries of a multinational company (MNC) of United States (US). The chosen MNC is Wal-Mart Stores Inc. which is an American multinational company that runs chain of departmental stores all over the world. The retail giant was founded by Sam Walton in 1962. It has many subsidiaries in different parts of the world which includes Japan, Mexico, Canada, Brazil, Argentina and Puerto Rico. In Brazil the owned subsidiary of Wal-Mart is known as Sam’s Club and the in Mexico it is known as Suburbia. Both the subsidiaries have different work cultures as they are situated in two different countries. I have got an opportunity from both Sam’s Club and Suburbia to join as a store’s manager. In the essay I have made a comparative analysis on both the company’s work culture to arrive at a decision for which option to choose. The essay also elaborates the facts about the two countries- Mexico and Brazil, like the living conditions, availability of transportation, cost of living and the multicultural competence in the two countries. 2. Wal-Mart Stores Inc. Wal-Mart Stores Inc. is a multinational retail giant who has dedicated their work for the betterment of the lives of their customers all over the world. The retail giant has acquired many stores all over the world and has increased their assets so as to become the largest chain of departmental stores in the world. The two subsidiaries of Wal-Mart in Brazil and Mexico are Sam’s Club and Suburbia respectively. Sam’s Club in Brazil Sam’s Club is a club which offers membership to the customers and that sells goods to both retail customers and the business customers or the wholesalers. The club sells general merchandise and groceries to their customers in large quantities. The average size of the club is around 88,000 sq. feet. The customers who have not taken the membership of stores can either take membership for one day or pay a surcharge on the price of the products that are purchased. The club also sells gasoline to the customers. It has identified a niche market as a supplier to the small business which is not so well known. The club stores open at the early hours and it has the slogan of “We’re in Business for Small Business” (“About Us”). It has recorded the highest sales in 2007 which was $42 billion or 12.1% of total Wal-Mart’s sales in 2007 (“About Us”). The operation of Sam’s Club in Brazil has remained the same over the years which is giving their customers the best quality goods and delivering the goods to them with minimum costs and giving them a very comfortable environment to shop. They have made shopping simple for the customers by bringing products at their door step. Rosalind G. Brewer, the CEO of Sam’s Club, has always focused on the innovation and technology and targeted in expanding their business by opening up new stores. The sustainability goals of Sam’s Club are the following: 1) 100% renewable energy 2) Creating zero waste. 3) Selling products that are sustainable to the environment and people (“Fact Sheet”). Sam’s Club even organize program like Giving Program to help the small owners of business by providing them with ideas of creating new business and development of vital products which will help them to connect with the community they are serving (“Giving Program”). The working culture at Sam’s Club is a unique one. It has the best team members who are all hard working. The departments like the marketing, logistics, finance and human resource are competent enough to make the whole business profitable. The employees are paid above the retail industry average salary. The employees were gives facilities like the medical assistance and also educational assistance for them and their children. Health care assistance is provided to them on an average of $17 dollar per day. The employees also enjoy attractive quarterly bonuses based on the performance of the stores and thus find the working environment suitable and comfortable (“Testimonials”). The employees are given training to cultivate their skills and thus do get the opportunities to express their talent before everybody. They are even rewarded when their performance are good. The employees are quite friendly with each other and work place politics is absent and thus the manager of the store finds it easy to handle the employees (“Fact-pay”). The threats that are faced by the stores are the political pressure due to the change in government. The changing government rules pose a challenge for the stores to adapt and thus it becomes a risk factor to them. The availability of the substitute products in the market has posed threat on the sale of the stores. The stores have the opportunity to exploit the online market through which it can attract more customers thereby increasing the sales of the stores (“News Room”). I have been offered to join the stores as the retail stores manager. Evaluating the facts about the business in Brazil I am quite impressed with the type of work they do and also the working environment in the stores. The main thing that is good about Sam’s Club is that individual efforts are taken into account and they are rewarded accordingly. As a store manger I will have the whole responsibility of the store and the employees and with the type of working environment that Sam’s Club offers it will not be a difficult job to do (“Careers”). Suburbia in Mexico Suburbia is another subsidiary of Wal-Mart which is located in Mexico. It is the departmental store which offers fashion clothes and apparels to the people of Mexico at a best and reasonable price. The sense of fashion innovation in Suburbia is unique. It sells a number of brands like Things Contempo, Weekend, Mossimo, Metropolis etc. The store sells jewelry and accessories, perfumes and beauty products along with clothes and foot wears (“About Us”). The main aim of the departmental store is to improve the quality of life of Mexican people. Suburbia has made business agreement programs with the employees and the customers to enjoy the extra benefit. Through the programs the value of the employment is increased and it contributes positively to the working community of the stores. The employees of the stores are bound to participate in these programs. The employees and their family members are given the opportunity to enjoy extended discounts from the normal 10% (“Conventions”). Bribery has been the main threat for the Mexican market. Wal-Mart has faced the challenge of bribery. The employees are accused to have taken bribe from the suppliers. This has made a negative impact on the subsidiaries of Wal-Mart and thus Suburbia has faced the same problem. The offer of retail manager of Suburbia is not as comfortable as the previous offer of Sam’s Club. The employees are not much devoted to their work this can be deducted from the working condition of Suburbia and also the Mexican market (Myers “Wal-Mart Overtakes Mexican Business”). 3. Living condition in the cities where the subsidiaries are based Osasco in Brazil Sam’s Club runs its business in Osasco, Brazil. Osasco is situated in a city named Sao Paulo which is the largest city of Brazil. The population of Osasco in 2008 was 7, 13,066 and was regarded as the world’s most dense city. Osasco has rapidly grown due to the increase in heavy industries in the suburban areas in the city thus bringing in population and congestion to the city along with growth. Osasco itself is the best place to live in with all the facilities such as transportation is well developed. Osasco’s cost of living is not too high. In non-expensive restaurants one will find meal for $10.00 and in a medium ranged restaurant one will find wholesome food in $50.00. The price of the dairy products as well as the market products is reasonable. Transports include bus and train. One way ticket fare of bus is about $3.00 and price of gasoline is about $2.55 per liter. The cost of rent is much higher in Osasco which is $ 1,000 for 1 Bedroom flat (‘Cost of living of Osasco”). Osasco can be good place to live in if I choose Sam’s Club to work with. But one factor which will not motivate in staying in Osasco is the huge amount of rent. The place looks comfortable for staying with family and also as it has improved in many ways from before. Mexico City in Mexico Suburbia has its business in Mexico City, Mexico. It is the most important cultural, political and financial center in the country. The population in Mexico City was raised to 8.84 million in 2007 and has been declared as the largest metropolitan area in the western hemisphere. According to the study conducted by PricewaterhouseCoopers, it is seen that Mexico City is the eighth richest place in the world (“Cost of living in Mexico City”). The city’s spending power is high and that has attracted the manufacturers of luxury goods to grow their business in Mexico City. The common transportation in Mexico City is the owned cars and the buses. The passengers also prefer to go by trains to their destinations. Even cycles are also seen as the mean of transportation on the roads of the city. The inexpensive restaurants charged $60.00 whereas the medium ranged restaurants charged $ 200 for a meal (“Cost of living in Mexico City”). The price of dairy products and also the market products are much higher than that of Osasco. The One-way ticket of bus costs around $ 4.00 and per liter gasoline costs $ 10.58. The rent of one bed room apartment costs $ 5,000(“Cost of living in Mexico City”). Thus it can be concluded from the data that I discussed so far, it is very expensive to stay in Mexico City for a person. I find that the offer of Sam’s Club will be better than that of Suburbia if the cost of living is taken in to account. Now, I need to evaluate that if Suburbia gives a high package then it will be reasonable to go for Suburbia than to Sam’s Club. This is because when money is not a factor Mexico City is a great place to live in with family and children. There are nice places to hang around, pubs and discos for entertainment. There are well known schools also for the children and even good colleges. But if the pay package of Suburbia is not up to its expensive lifestyle then Suburbia is not a right place to work in and Mexico City is not a right place to live in (“Cost of living in Mexico City”). 4. Multicultural competence The culture in United States differs from that of in Mexico and Brazil. There are remarkable cultural differences in the organization of the three places. Culture provides the rules and the regulations of the organization staying within which the employees of the organizations interact with their colleagues and the supervisors. Brazil and Mexico are characterized by a diverse culture. The important aspects of culture of Brazil and Mexico are the following: 1) The Brazilians before working efficiently know their business and the person with whom they are doing the business well. The Mexicans do the same but they do it for a just formality. 2) Time is required to negotiate with the Brazilians and thus with Mexicans too. 3) In Brazil face to face meetings are preferred than to written formal communications. They value legal contracts. Mexicans prefer written communication than to face to face meetings. 4) The Brazilians give effort to individual feelings than dealing with the company as a whole. Mexican whereas are very business centric, they care for the organization goal and do not care for the individuals. 5) In Brazil, the high ranking people are responsible for taking the decisions. So the hierarchy is maintained in Brazil. But that is not effective in Mexico. 6) Men in Brazil greet others by shaking hands and keeping steady eye contact. This is applicable to the female also. In Mexico the scene is different as the female does not prefer to greet each other like that way. 7) The female in Brazil prefer to greet each other by kissing on each other’s cheek. Whereas the male hug and back slap each other when they meet. Mexican does not prefer that way of greeting. They are very formal. 8) Criticism is taken very harshly in Brazil. The Brazilians lose their face if they are criticized regarding any issue. Whereas in Mexico criticism is treated sportingly. 9) Brazilians depends a lot on relationships, so it is better for them to know the other person very well before going into any decision. In Mexico, relationships are made very formally and can be broken very easily (Habels 234). I am a born and brought up in China and thus can encounter difficulties if I choose any of the two options because of the cultural difference. China has a rich cultural heritage. The important cultural aspects are as follows: 1) We have respect for our superiors and we are also loyal to or friends and give respect to the ethical system of China. 2) We have definite pattern in giving a business card. We ensure that we hold it with two hands and with respect give the card to the other to whom we are interacting. 3) Greeting is very formal and we always do it in a very light fashion. We greet the oldest person at first and then we go for others. Its respect to the elders what matters to us the most. 4) Criticism is taken light heartedly and maintaining face is also very important before everybody. Comparison of the cultural difference in China and the two countries There are five dimensions of the cultural difference: 1) Power Distance Index: The degree of inequality or equality is addressed by the power distance index. The higher the index there is vast difference between the cultures. 2) Individualism: The degree to which an individual values their culture is addressed in the individualism score. 3) Locus of control: The degree to which male are dominating in the society and having the control on others are measured by the score of locus of control. 4) Comfort with uncertainty: The levels to which the uncertainties are tolerated by the individual are measured by the score of comfort with uncertainty. 5) Long-Term Orientation: The importance that is attached to the time horizon is addressed by the score of long term orientation (G. Hofstede and J. Hofstede 345). Works Cited “About Us.” Sam’s Club. Sam’s West Inc, 2010. Web. 24 July 2013. “About Us.” Suburbia. Suburbia, 2013. Web. 24 July 2013. “Careers.” Sam’s Club. Sam’s West Inc, 2010. Web. 24 July 2013. “Conventions.” Suburbia. Suburbia, 2013. Web. 24 July 2013. “Cost of Living in Mexico City.” EasyExpact.Com, Easy Expact Ltd, 2013. Web. 24 July 2013. “Cost of living in Osasco.” EasyExpact.Com, Easy Expact Ltd, 2013. Web. 24 July 2013. “Fact sheet.” Sam’s Club. Sam’s West Inc, 2010. Web. 24 July 2013. “Fact-pay.” Sam’s Club. Sam’s West Inc, 2010. Web. 24 July 2013. “Giving program.” Sam’s Club. Sam’s West Inc, 2010. Web. 24 July 2013. Habels, Geert. Comparing Values, Behaviors, Institutions and Organization across Nations. California: Sage Publications, 2001. Print. Hofstede, Geert and Jangret Hofstede. Cultures and Organizations: Software of the Mind. New York: McGraw-Hill, 2004. Print. Myers, Amanda Lee. “Wal-Mart Overtakes Mexican Business.” Crossing Borders. Crossing Borders, 8 Dec. 2004. Web. 24 July 2013. “News Room.” Sam’s Club. Sam’s West Inc, 2010. Web. 24 July 2013. “Testimonials.” Sam’s Club. Sam’s West Inc, 2010. Web. 24 July 2013. Read More