Victoria Chemicals the Merseyside Project Solutions 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:

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

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.

Within less than 30 years, Wal-Mart had transformed from a small rural retailer in Arkansas into the largest retailer in the U.S. In order to continue this rapid growth, the company had started to pursue international expansion grounded in the belief that the firm’s business model of offering quality products at low prices and great customer service would appeal to consumers everywhere around the world (p.8)[1]. China was of particular interest in going international as Wal-Mart’s top management held the opinion that it was the only market in which the firm’s success story in the U.S. could be repeated (p.2/8). However, in 2005 (nine years after its

What is the Zara “business model”? How is it different from the business model of other large clothing retailers? What weaknesses, if any, do you see within this business model? Is it scalable?

The business idea of Zara is to link customer demand to manufacturing, and to link manufacturing to distribution. And based on this general idea, Zara has several essential elements for its business model. First, speed and decision making, which means that in the external level, Zara need to respond very quickly to demands of target customers, and always keep in style. While for the inside, Zara treasure intelligence and judgment of common employees who enjoy a great deal of autonomy. Second, its marketing, merchandising and advertising strategy. Zara does not spend on virtually advertising, while it spends heavily on stores, and no selling online because of

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).

No business in this type of industry has total control over the market price and there are no barriers to entry and exit. Because of its monopolistically competitive playing grounds, Zara’s conduct is to increase its market power by producing demand for its heterogeneous products. Through differentiation and cost leadership, Zara attempts to increase market demand by offering new items weekly while keeping a low inventory, thus making its products unique and attractive to consumers. Because of its backward vertical integration model, Zara creates a strong synergy throughout its production process. Zara has sustained a competitive advantage globally by expanding into new markets and becoming more efficient. In a monopolistically competitive industry, Zara is expected to make profits in the short run but will break even in the long run because demand will decrease as average total costs increase. This means in the long run, a monopolistically competitive firm, such as Zara, will make zero economic profit (AmosWEB, 2001).

Following is an analysis of Zara 's current expansion strategy into the US retail market and recommendations on future tactics to ensure a successful expansion. Zara 's expansion strategy thus far has been quite successful; however, with every new store opened, its ability to maintain an efficient centralized production system and a strong, unique culture will be diminished.

As described by the case study, explain the supply chain for Zara from raw material to consumer purchase.

In order to understand the success and failure of Walmart Stores, Inc. in markets other than the United States, we

Quick response of Zara leads it to be successful in the fashion clothing industry. Zara adopts international strategy for its operation. With vertical integration, it benefits Zara in cost aspect, however, it involves some risks. Due to our anaylysis on Zara’s operations, some of the recommendations are made to facilitate its further improvements.

Zara is a clothing company that was founded in 1975 and came from Spain. Its under Inditex group which owns other brands such as Massimo Dutti, Pull & Bear, Oysho, Uterques and many more companies. Zara grew very fast and currently in 2012 has 1,617 stores worldwide. With a large name in the fashion industry, besides that, Zara faces tough competition internationally including H&M, Benetton, and GAP. In order to keep up with the speed chic, Zara need to keep up also with the information system to run their business.

5f. What current or potential weaknesses (if any) do you see in Zara’s IT infrastructure and thus IT strategy and potential impact on Business Strategy and Business Model?

Next, the essay will concern about five performance objectives that help Zara achieve competitive advantage in business. About quality, beauty, affordable prices and fashion are factors leading to magic success of Zara as well as other brands of Inditex, but it is not easy to do that. Amancio Ortega is president of the corporation with 32,000 employees, but he still has habit of operating as a family company with a clever and simple style. Zara operates with closed model from research, design, production, distribution and retail. Diversity, abundance and frequent changes of clothing design have become the biggest competitive advantage of Zara. The competitors expect to have the attraction like Zara. Most customers feel loss or lack