Strategic Management Assignment 8 1. Do Wal Mart and K Mart exploit any merger and acquisition in recent 5-10 years? Merger &Acquisition | Wal Mart | K Mart | Acquisition | -Bempreco: This company has been acquiesced by Wal mart. Bempreco is a retail chain in northeastern Brazil with 118 units (hypermarkets, supermarkets and mini markets). The acquisition gives Wal-Mart Brazil its first stores in the Northeast market. -Seiyu GK: is a Japanese group of supermarkets, shopping centers, and department stores owned byWal-Mart Stores. In 2005 Wal-Mart acquired a majority stake in the company which it has since increased to 95% ownership, and 100% ownership in 2008.-OneRiot: US-Wal-Mart Stores Inc acquired OneRiot, a Boulder- based …show more content…
Often, such acquisitions are also motivated by the "empire-building desire" of the parent company 's managers. 3. What is the average performance of return for those M&A? Wal-Mart | K-Mart | -With the acquisition, Wal-Mart Brazil will operate 143 units in the country, including 13 Wal-Mart Supercenters, 10 SAM 'S CLUBS, two Wal-Mart Todo Dias and the 118 Bompreco hypermarkets, supermarkets and mini markets. The acquisition gives Wal-Mart Brazil its first stores in the Northeast market.-The acquisiton give Wal-Mart and Massmart it’s first store in South of Africa, Botswana, Ghana, Guatemala, Honduras, Lesotho. | -Those most optimistic look to opportunities to cut redundant administrative expenses, increase buying power and crosssell branded merchandise between Kmart and Sears.-This acquisition is proper management and planning, the acquisition will be beneficial to employees from both companies and to consumers in general. |
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Normally if the company doing acquisition and merger, they will get more profit and advantages. In above we could know that now on Wal-Mart becoming Leader in retailing industry. Wal-Mart has dominant market share in South africa and some africa contries. Compare between Wal-Mart and K Mart, Wal-Mart has better perfomance than K
Wal-Mart decided to target emerging markets as the starting point for international expansion in Europe, nations with growing populations in Latin America, and in Asia is targeted China. The first international store was opened in Mexico City in the year 1991. By forming a joint venture with the Mexican retail conglomerate, Cifra, Wal-Mart was able to overcome cultural differences. After some experience with Mexican partners Wal-Mart succeeded to expand further in Mexico, and entered Brazil and Argentina.
Walmart faced strong entrenched competition in Canada and Europe. In these developed countries, they couldn’t gain critical mass through internal growth, so they had to acquire companies that have been in the market already. They acquired Woolco, a money losing operation, applied many of the American business practices, and within a few years, the Canadian operations were successful. They have 317 stores, and they account for more than 35 percent of the Canadian discount and department store market. In Europe, Walmart entered Germany by acquiring the Wertkauf hypermarket chain in 1998 and entered the UK by acquiring the 229-store ASDA group. They the leader and are now losing ground to Tesco. A major problem for Walmart in the European market is overexpansion. Accompanied with the famous “Always low prices” approach, they met large resistance from the competition and regulators. Large price wars began because Walmart was accused of underselling the competition. They struggled to build a strong competitive base in German losing more than $1 billion. They were unable to create a competitive advantage, so they sold their operations to a competitor, Metro. They also faced problems in Korea, so
Wal-Mart has preferred to expand internationally by buying existing operations and converting them to Wal-Mart stores. The company entered Canada by purchasing the Woolco chain that was competing with Kmart in that market, and it entered Mexico in much the same way. The company entered Europe by purchasing the Asda stores in the United Kingdom and an operation in Germany that later failed. Wal-Mart entered foreign markets via acquisition for a couple of reasons. The first is that the company relies on real estate as the cornerstone of its business. The second is that as a cost leader, Wal-Mart needed to build up economies of scale that would allow it to enjoy strong bargaining power in these markets immediately. Moreover, moving rapidly into a market minimizing the ability of competitors to register an adequate response.
Mergers and acquisition plays an important role in survival/vitalization of a corporation in today’s market. It continues to be a breakthrough strategy for improving innovation of a company’s product or services, market share, share price etc.
Wal-Mart competitors enhanced their marketing strategies and lured the right customers to their stores with proper marketing strategy in place. The final key factor that triggered a face lift for Wal-Mart was after Business Week launched a pricing comparison between Wal-Mart and their number one competitor, Target. The results proved that there were only a few pennies separating the two companies who focused on two different markets are the key factors that led to the following critical issues.
Wal-Mart Stores, Inc. (which was incorporated in October, 1969) is presently the world’s largest retailer; it sells a wide variety of products at economical prices when compared to competitors (Reuters, 2016). Wal-Mart’s business affairs are operated in three sectors: Walmart U.S., Walmart International and Sam 's Club (Reuters, 2016). The U.S. portion of the company runs retail stores in all states as well as Puerto Rico, my way of three main store set-ups, and digital retail (Reuters, 2016). The international wing of Wal-Mart Stores, Inc., features business activities in 26 foreign countries (that is, outside of the United States) and comprises several formats separated into three main classes:
The merger between Kmart and Sears clearly enhanced both of the companies’ mutual progressive goals. Sears invested many assets in the formation of Sears Grand stores, larger off store malls, and in the process bought many of the Kmart locations which were going out of business. Therefore the merger helped this process so that it would enable the further growth of Sears at a quicker pace as well as enhance the productivity and save the Kmart Corporation. This was clearly a strong decision made by the executives in combining forces so that the marketability of both companies would increase. Along with this, the shareholders could make a tremendous profit with this alliance. Prior to the merger, if the independent companies were not steadily increasing their revenue shareholders would lose money from their investments. The combination of both of the corporations would improve shareholder investment returns and thus facilitate the growth of the Sears Holding Corporation. The more investors receive higher returns, the greater investments into the company thus fostering its overall growth. The proprietary brands, selling the aforementioned products, under both companies would be able to reach the target demographic groups with greater ease. The real estate holdings of individual Kmart or individual Sears stores, now under the umbrella of the Sears Holding
Corporate structure was structured into three business units, Wal-Mart Stores USA, Sam’s Club, and Wal-Mart International. Wal-Mart is a public corporation, however the majority of the stock is still held by Walton family members. Therefore, there is lots of family involvement at the top level. The headquarters are in Bentonville, Arkansas, along with the control and decision making ability of the organization. There is a very hierarchical structure in place which only fuels the "good ' boys club" for top management. The other unique element in Wal-Mart's
In this present era, many companies that are trying to compete against their rival giant, Wal-Mart, have found it to be quite difficult. The reason being is because Wal-Mart has managed to get their suppliers to provide them with the lowest prices possible in order to increase profits. Additionally, Wal-Mart has decided to purchase as much output of any of their suppliers. In contrast, Sears has never purchased more than 50%. As a result, Wal-Mart continues to grow, while Sears deteriorates and begins to vanish.
The stores of Wal-Mart are the biggest retail company that operates within the United States of America. The company has received the first position in the Fortune 500 Index Fortune Magazine for a substantial number of years. The company has managed to embrace a distinct corporate strategy whose goal revolves around dominance into the already existing retail market. There has also been an increase in the manner for which expansion activities of the business are conducted. Numerous ventures have been made into the United States, as well as other international markets.
With regards to Wal-Mart Stores Inc., Porter 's five forces structure can be utilized to examine the intensity of Wal-Mart 's industry. Wal-Mart’s changed from a little chain of markdown stores to the world’s biggest retailer. Wal-Mart’s transformation from a small chain of discount stores in Arkansas, Missouri, and Oklahoma in 1970 to the world’s largest retailer was one of the most remarkable corporate success stories of the 20th century (Grant, 2008, p.57). Wal-Mart works in the retail business which is tremendous, growing, and greatly aggressive. Wal-Mart operates in a conventional range of markdown retailing. In its traditional area of discount retailing, Target was proving an increasingly formidable competitor, while several of the rivals that Wal-Mart had believed it had crushed – Kmart, Sears, and JC Penney – were being revitalized by new management (Grant, 2008, p.58). Wal-Mart’s fundamental rival is Target however different companies include Kmart, Sears, and JC Penney. Target may be the greatest competition for Wal-Mart since they both keep growing in the same market. Wal-Mart’s success had been based on a strategy that emphasized a few key components: commitment to “everyday low prices,” responsiveness to customer needs, matchless logistics supported by leading-edge IT, committed employees, and unremitting cost cutting founded on a culture of frugality (Grant, 2008, p.58). The risk of new entrants could incorporate food merchants on the off chance that
Other high profile mergers that appeared to have merit failed to provide a successful result; consequently, Kmart and Sears merged to form Sears Holdings in 2005. Mergers are often the result of corporations attempting to reduce the variability of its income or diversify its portfolio and increase revenue potential (Katz & Simanek, 1997). Regrettably, the much anticipated success did not come to fruition with the stifling success of competitors such as Target and Walmart. Perhaps the timing was off or it is just a sign of the times that brick and mortar stores continue to struggle against the online shopping giants such as Amazon.
Offering products at everyday low prices is one of Wal-Mart’s many strategies. The company value chain helps identify activities associated with how Wal-Mart achieves their many strategies. First, Wal-Mart’s supply chain management is extremely cost effective. For example, Wal-Mart has been known to imitate competition’s successful merchandising concepts. Another cost-effective method in Wal-Mart’s supply chain management is their ability to track the movement of products through the entire value chain. Whether the product is in shipment, in distribution center inventory, in-store
Walmart enters into international Market for the first time by opening a Walmart store in Mexico. Mexico is one of the potential markets for a Multinational company like Walmart. The main reason for entering this country is it is too close to the United state. Mexico has the huge influence over the United state. Available resources is also an issue for Walmart to enter in this market1996 : Walmart opened its first stores in China. In 2002, For the first time, Walmart topped the Fortune 500 ranking of America 's largest companies. Also, operate with 600 store in Mexico and sales more than $10 billion and expanding into many countries such as Canada, Germany, South Korea, and Japan. In addition, Walmart had store over 1200 stores outside USA. In 2012, Walmart celebrated 50 years
Two years later, the company acquired 122 Woolco stores from Woolworth, Canada. By 1997, Wal-Mart had become the largest volume discount retailer in Canada and Mexico. In 1997, Wal-Mart acquired the 21-store German hypermarket chain, Wertkauf. Other international expansion efforts included the purchase of Brazilian retailer Lojas Americans ' 40 percent interest in their joint venture, and the acquisition of four stores and additional sites in South Korea from Korea Makro. In January 1999, Wal-Mart expanded its German operations by buying 74 stores of the hypermarket chain,