...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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...Perspectives on International Trade and Finance Assessment 2 – Individual Case Analysis 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...
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...fiscal year 2012. Its operating income from international operations for the fiscal year ending January 31, 2012, was US$ 6,241 million... Initial Hiccups Wal-Mart's offer was to buy a controlling stake of 51 percent stake in the South African retailer. Its offer was accepted with some conditions. First of all, Wal-Mart would be restrained from cutting any jobs in Massmart for two years after the merger. Wal-Mart was also to give preference to the 503 Massmart employees who had been retrenched in June 2010 in its future recruitments. Wal-Mart agreed to honor labor bargaining rights for at least three years after the merger. In a move to develop the local manufacturing sector, Wal-Mart agreed to implement a program to improve the competitiveness of local suppliers within three years of the merger approval date. It earmarked 100 million rand (US$13.37 million) for a supply-chain training program... Smooth Ride? As the court was deliberating on the appeal against the merger, Wal-Mart and Massmart were busy moving ahead with their integration, which included aligning product sourcing. McMillon said, "Massmart is currently located in 12 markets so that's our focus. Building our business in the markets that we are currently in is our primary focus... We are excited about the region. We have a long-term view"... Exhibits Exhibit I: Criticisms against Wal-Mart Exhibit...
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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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...Corporate Site, 2014). However, not all expansion into foreign countries went well. When Walmart decided to enter the German market in 1997, they did so by buying two retail store chains, Werkauf and Interspar. This was a difficult expansion process as neither one of these companies operated like Walmart. Walmart had issues with their distribution network and the German people were not used to shopping at a big box store like Walmart (Robson, Beninger, 2013). This did not deter Walmart into the global expansion, they continued to expand into other countries and found success in Japan, and Chile (Walmart Corporate Site, 2014). During late 2010 Walmart started negotiations with one of the leading retailers in South Africa, Massmart. While the bulk of Massmart’s stores were in South Africa, they did own 313 wholesale and retail stores in 13 African countries (Robson, Beninger 2013). South...
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...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 apart from United States with yearly revenue more than $400 billion. Similarly, Massmart sells in 14 African countries with majority of its operations are in South Africa (265 retail stores in South Africa versus 25 in the other 13 countries). The retailing industry ($3.8 trillion...
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...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 strengths for further global growth are: • Huge and loyal customer base • Global organizational size •...
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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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...Moving companies across national boundaries can always be a risky situation. It is hard to control all of the aspects of your company if you are hundreds or thousands of miles away. That is why it always safe to pick somewhere that is economically stable, politically sound and just generally safe as regards to everyday business practices. So one may search the internet or even read a few magazines trying to find lists or any information on countries that have good reputations on foreign investments. You follow the list you found, and go to the best rated country. You get there and you soon realize that everyone else has foreign investments in that country, and everything is essentially being used. Customers are relatively comfortable in their consumption habits and places they shop, and there are hardly any untapped resources left in that country. Basically there is no more room for you because that home country’s market has become saturated with newcomers. There is hardly any “wiggle room” in these countries, or the development there is so ahead that it is just starting to plateau out rather than a continuous growth. I would like to be in a country where I can explore and extend my abilities as a company and maybe find a hidden skill within my company that I would not have found if I would have stayed in my host country. I also want to move to a country that has the continuous drive to get better, not somewhere that is satisfied with what they already have. Finding a country...
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...Wal-Mart Subsidiaries and Partners: Wal-Mart is one of the biggest retail chains in the world and in terms in the amount of sales the company generates, it is the one of the top five biggest companies in the world in terms of sales. Wal-Mart currently has 3,898 stores throughout the United States including 629 Discount stores and 3,029 Supercenters. The Walton family has the majority stake in the company with a 48% ownership in the corporation. Wal-Mart also has a vast grasp on the international market as well with 5,733 stores in countries across the world including Canada, Argentina China and Japan. With respect to strategic partners, Wal-Mart has branched out to numerous companies and groups to further expand their brand. On October 24, 2006, Wal-Mart agreed to have long-term marketing agreement with the band, the Eagles, to appeal to music lovers and to have a major music symbol as a voice for the company. Wal-Mart’s is comprised of three basic retailing subsidiaries: Wal-Mart stores division in the U.S, Sam’s Cub and Wal-Mart international. The Wal-Mart stores division in the United States includes the Wal-Mart discount stores, which is comprised of 629 stores nationwide, the Wal-Mart Supercenter which is comprised of 3,029 supercenters across the nation. In these stores, the Supercenter includes a full-service supermarket, a pharmacy, a pet shop and bank branches. The next subsidiary under Wal-Mart is Sam’s Club. Sam’s club is a large series of warehouse...
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...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. Multinational Strategy and Market Entry Mode Walmart’s multinational strategy of selling what customers want can often be a challenging undertaking. When Walmart chose to expand onto the African continent, it realized that working with existing retail players would be the best option to break into a new region. In 2011, Walmart purchased a controlling stake in Massmart Holdings, Ltd...
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...differences observed in making this company international. Wal-Mart Wal-Mart is a Fortune 500 international business. Wal-Mart employs 780,000 associates in 5,651 stores in 26 countries. The main corporate office of Wal-Mart is in Bentonville, Arkansas. Wal-Mart first opened in Rogers, Ark in 1962. The idea of discount retailing was not new, but Sam Walton, the founder, wanted a new type of store. To only name four countries in which Wal-Mart stores can be found Argentina, Honduras, South Africa, and Swaziland, but they may be seen under a different name in each country. In Argentina, Wal-Mart may be known as Changomas. In Honduras, Wal-Mart may be seen as Centroamérica. In South Africa, Wal-Mart may be seen as Massmart. In Swaziland, Wal-Mart may be seen as Massmart (Wal-Mart, 2012). The Four P Components of the Marketing Mix were Product, Place, Promotion, and Price. The product is the items or services the company sales. The place is the location of the company. The promotion is the ads used to sale the products or service to the customers. The price is the amount of money that the customers are willing to pay for the product or service while the company can still make money. The Evolution of Marketing Management are People, Processes, Programs, and Performance. The people parts of marketing are the people who are shopping for the products in the store and the people who are selling the product inside the store. The processes parts of marketing are the creativity, discipline...
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...Corporate Social Responsibility 1 Corporate Social Responsibility Southern New Hampshire University Trenise Graves Corporate Social Responsibility 2 Executive Summary Corporate Social Responsibility has become the main initiative for companies looking to capitalize on sustainability and humanitarian efforts. CSR has evolved from companies donating corporate dollars to global non-profits, to sending employees into emerging geographical places to work directly with its initiatives partnering organizations. Wal-mart stores Inc., operates retail stores in various formats under various banners. It’s operations comprise of three reportable business segments, Wal-Mart U.S., Wal-Mart International and Sam’s Club in three categories; retail, wholesale, and e-commerce. Wal-Mart first opened in 1962 in Rogers, AK. The business is the result of its founder Sam Walton. His visionary leadership focused on helping customers and communities save money and live better. They feature a great selection of high quality merchandise, friendly service, and everyday low prices. Wal-Mart goal is to bring the best shopping experience to consumers. Wal-Mart business philosophy is based on the simple idea of making the customer No. 1. Wal-Mart as a corporation believe that by serving the...
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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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...this paper. First, I will describe Wal-Mart’s organizational structure and make a comparison to that of other organizational structures used today so as to clarify differences and similarities. Second, I will evaluate how the organizational functions influence and determine its structure. Third, I will explain how organizational design helps determine the best structure. Organizational Structure of Wal-Mart Wal-Mart operates under three divisions, which are Wal-Mart US, Sam’s Club, and Wal-Mart International. Its global operations expands over several continents with numerous subsidiaries geographically located in several countries. These subsidiaries operate under different business names to include ASDA, Sam’s Club, Seiyu, Massmart, Wal-Mart US, Wal-Mart Canada, Wal-Mart China, Wal-Mart Brazil, Wal-Mart Argentina, Wal-Mart Mexico, and Wal-Mart Chile with more than 8,000 locations currently in operation. These divisions operate within their geographical boundaries so as to more efficiently offer the products, services, and customer support that today’s customers demand, which is also a direct...
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