South West of China: The Sichuan Province Essay

Wal-Mart is a brand that is well known around the world, especially in the USA. It has gradually developed into the largest retailer in the world. Wal-Mart’s globalization efforts have been happening rapidly. But have they been successful in all aspects of their international expansion or not? This is the main thought that is going to be discussed in this essay. The questions I will be looking at are based on a case called “Wal-Mart takes on the world” from the book of International Business The Challenge of Global Competition eleventh edition – Ball, McCulloch, Geringer, Minor, and McNett. Questions are the following:

Walmart is the world's largest company by revenue (approximately four hundred and eighty billion dollars) and the largest private employer in the world with two point three million employees. Walmart is also one of the world's most valuable companies by market value, and is also the largest grocery retailer in the U.S. “One Nation Under Walmart” is a case about how Walmart has taken over the retail business and the effects of their market domination. The case also shows statistics of how much percentage Walmart is of many suppliers’ sales. According to the case Walmart has a 30% market share of all household items. Twenty-eight percent of Dial’s business and twenty-four percent of Del Monte’s business go through Walmart stores. It is also worth noting that Walmart imports ten percent of all United States imports from China. The case states that Walmart is able to offer cheaper prices because they put so much pressure on their suppliers to lower their prices. The case, “One Nation Under Walmart”, explains the problems that some people have with the massive retailer. One of these problems is how Walmart has forced numerous local businesses to close their doors through their extremely competitive pricing. They are able to purchase bulk goods at such low prices and thus pass the savings onto customers. As a result of these lew costs, rivals are driven out of business which results in a loss of jobs. Jobs are vital to the success of a community and with Walmart causing job

As the world’s largest retail store in the world, Walmart wants to be in every market that they can be prosperous in. They know they rule the United States market, so why not try to expand overseas and dominate those markets as well. Now that they have reached limits on expansion here in the U.S., the next step was to test the water in other nations. As they began to go international, there were many critics saying they will never make it because their business practices and culture wouldn’t work in other countries. Yet the company’s globalization efforts progressed at a rapid pace. Its more than 4,263 international retail units employ more than 660,000

There was a marked improvement in China’s economy. To further increase and attract foreign investment, the Chinese government increased its numbers of experimental, special economic-zoned cities in which foreigners could operate a business. There were, however, restrictions set forward by the government. One restriction in 1996 was that all foreign businesses would have to be in a joint venture or other type of cooperative agreement with at least one Chinese partner, with that Chinese partner getting a stake greater than 51%. In August 1995, Wal-Mart, the great American retail chain and Middle America success story, arrived in China, establishing a joint venture with Shenzhen International Fiduciary Investment Co, Ltd, China. In the following year, 1996, Wal-Mart opened its first supercentre and a Sam’s Club, its members-only big-box store, in the special economic zone of Shenzhen, in the southernmost Guangdong Province. However, it took the Chinese government’s removal of further trade restrictions for foreign retailers in 2004 for Wal-Mart to kick-start its expansion plans. Three years later, in 2007, Wal-Mart acquired a 35% stake in Trust-Mart, a Taiwanese-owned chain of retail supercentres operating in the Middle Kingdom. By 5 August 2010, Wal-Mart’s presence in China grew to 189 units in 101 Chinese cities, with the creation of over 50,000 local jobs. By early 2012, Wal-Mart nearly doubled its

Wal-Mart’s expansion in China had been hindered and slowed down by regulatory restrictions for a long time. Thus, international retailers were limited to certain cities, in which not more than three stores were allowed. Additionally, each new store needed the approval of the central government. Furthermore, enforcement of local interest such as tax revenues or jobs and local protectionism by local governmental agencies handicapped Wal-Mart’s expansion in China. As a result, the retailer had only 43 stores in China by early 2005 (p.12-14).

Inventory from China is now reaching 18 billion dollars, and has increased 20 percent over the past two years. Currently over 5,000 suppliers have steady alliances with Wal-Mart. Not only does this benefit U.S. customers by keeping prices down, but it keeps the Wal-Mart corp. very well received by the Chinese people. A large portion of the world's population is located in China being a respected company in this part of the world will greatly increase sales. Wal-Mart is, however, responsible for 10 percent of the countries trade deficit to China.

On July 2, 1962, Sam Walton opened his first Wal-Mart in Rogers, Arkansas. Over 50 years later, Wal-Mart became known as the largest private employer in the United States and the largest retailer in the world. Wal-Mart have expanded to over 4400 stores across the globe. Americans truly love Wal-Mart. When there is not any groceries at house the first thought comes to mind is Wal-Mart. Wal-Mart have the cheapest and lowest price that everyone can afford, so when the groceries are scarce at home most often Wal-Mart will be the next stop. People love shopping at Wal-Mart since it is more convenient than any other store around. Wal-Mart plays a tremendous growing role in America’s economy. More than 100 million customers visit Wal-Mart every week, but is Wal-Mart good for economy? This a question that many Americans never assumed or inquired. Wal-Mart is effecting America in a lot of ways. Wal-Mart has devastated thousands of small industries and innumerable manufacturing jobs over the past decades (Economy in Crisis). Wal-Mart has become so massive in retail that it sells five times more than any other retailer in the country. Sadly, 85% of the items on Wal-Mart’s shelves comes from foreign countries. This in turns hurts America’s economy, taking thousands of jobs away and taking countless revenue. Wal-Mart is a textbook illustration of where our economic system is headed.

1. China is divided into two major geographical regions: the steppe, desert, and high plateau west and northwest; and the eastern zone, more suitable for settled agriculture.

3) Do those same sources of cost advantage enable Walmart to achieve a sustainable competitive advantage in China? With a localized demand, localized supply base, and localized distribution in China also provided domestic stores with an edge in establishing a strong regional dominance when foreign retailers found it hard to leverage national presence in a regional market. In China, however, the constraints on a foreign retailers operation directly limited the regional expansion of Walmart stores and the efficient use of distribution centers since they were so spread out. Would have to spend more on distribution costs and given the slow speed of transportation did not enable Walmart to lower its prices. Walmart also faced a problem with lack of an information technology network with suppliers, making purchasing and distribution difficult. Also, consumers in China were very different than those back home, which added pressure to the operational costs and directly threatened its ability to set the price low as possible. People in China did not buy in bulk and that is what Walmart specialized in, so shopping patterns did not fit. Diminished economies of scale and interrupted supply chain meant higher costs in satisfying Chinese consumers. Everything that Walmart thrived in and was able to do to cut costs, they

They turned a small company into one of the largest corporations in the entire world. They have completely redefined what it means to be a big business, and have had many good impacts on society. While this is true, Wal-Mart has not always had the best business practices, receiving many different criticisms over the years. Some criticisms include its relations with people and businesses outside the United States, its role within local communities, and its labor policies and practices. Wal-Mart has always been the superstore that prides itself on lower prices, so much so that it has looked to manufacture in other countries for the cheap labor. Wal-Mart has become so big, that it has stores and plants all over the world. Wal-Mart even does most of its business overseas. “Chinese suppliers, or “partners,” reportedly provide Walmart with about 70 percent of the nearly $420 billion worth of goods that it sells globally each year” (SCHELL). Wal-Mart has even gone as far as to move one of its headquarters to China. Wal-Mart is helping China, and China is helping Wal-Mart. Wal-Mart is bringing in lots of jobs and products for the Chinese people to buy, while China is providing everything Walmart needs to keep growing as rapidly as they are. Wal-Mart is one of the worst offenders of the global sweatshop problem, and because of this they had lots of criticism of their labor policies and practices. Wal-Mart is not a

Many reports have been written documenting the economic and eventual social and environmental degradation which occurs when Wal-Mart “comes to town”.

Wal-Mart is the number one retailer in the world in both sales and earnings, dwarfing many of its retail competitors. It offers a full assortment of products ranging from clothing to electronics. It currently has 6000 locations predominately within the United States with over $312.4 Billion in net sales during 2006. In addition to its strong domestic presence, Wal-Mart has expanded aggressively to Canada, Mexico, and Puerto Rico with over 1000 locations within those countries. This expansion can potentially create greater economies of scale for Wal-Mart services and merchandise. The synergies created by expansion will also drive profitability in the future by providing goods and services at even lower costs to consumers. In order to enter foreign markets successful, Wal-Mart engages in both joint ventures and acquisitions. By utilizing this method, Wal-Mart intends to leverage foreign retailer's market knowledge with its own core competencies of merchandising and supply chain management (Stilgoe, 2003).

Wal-Mart is arguably the most dynamic corporation in the last 50 years in the United States, if not the world. Arising from its beginnings in Bentonville, Arkansas, it has grown to over 4,400 discount stores, super centers and corner markets worldwide. Wal-Mart continues to expand despite public criticism of its labor practices as well as complaints about their treatment of competitors. The many strengths of Wal-Mart, like their low cost production and marketing practices, will aid Wal-Mart as it continues to grow in the retail

Q2. How would you explain wal mart choice of countries during the early stages of international expansion in the 1990 's.

The government of china is very keen to encourage foreign investors, because foreign companies are regarded as relatively good corporate