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Globalization and Global Strategic Planning - Admission/Application Essay Example

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Globalization and Global Strategic Planning Introduction Wal-Mart is the largest retail store chain in the world and was started in 1962. From a strategic perspective, the company is organized into three main segments namely: Wal-Mart United States, Sam’s Club and Wal-Mart International…
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In countries such as China and Japan, Wal-Mart operates in multiple formats including discount outlets, restaurants, superstores and retail stores. Sam’s club contributed over 10.5% in terms of annual revenues in 2011 through both retail and online operations. The company employs over 2.1 million people and is bigger than all other major retailers (Carrefour, Tesco and Metro AG) put together. In the United States, the company operates nearly 3000 superstores, 720 discount outlets and over 600 Sam’s Club outlets (Wal-Mart, 2011).

International Operations Internationally, the company operates over 4200 outlets, which contribute over a quarter of its annual revenues. It is the primary retailer in markets such as Mexico and Canada and is enhancing its market at a rapid share in markets across Asia, Africa and South America. It employs over 650,000 people in these markets. The company operates through fully owned subsidiaries in South America, Canada and the United Kingdom, which it has entered the Japanese market through a joint venture (Antoni, 2007).

In Canada, Wal-Mart began its operations in the early 1990s through the acquisition of Woolco and currently has over 300 stores, out of which over 100 of them are superstores offering a multiple range of products under a common roof. The company considers Canada a major market and has even opened a Wal-Mart Canada bank along with the introduction of the Wal-Mart Rewards incentive scheme (Kneer, 2011). In the UK, Wal-Mart operates under the name Asda, which it had acquired previously. Asda is one of the most important segments for Wal-Mart International with over 45% of net sales in 2011.

Unlike its US counterpart, Asda operates primarily as a grocery chain although it has begun to focus recently on non-consumable goods as well. There are over 350 Asda outlets in the UK of varying sizes (Kneer, 2011). The larger branded superstores are known as Asda Wal-Mart Supercentres while the smaller ones are branded as Asda stores. Wal-Mart is also a major player in the Chinese market and operates here through several joint ventures. In Japan, Wal-Mart completed a 100% acquisition of the Seiyu retail chain in 2008 while it operates through a majority-owned subsidiary, Walmex, in the Mexican retail sector (Aswathappa, 2010).

In Central America, the company operates as a majority shareholder in the Central American Retail Holding Company (Aswathappa, 2010). Market Entry strategy Wal-Mart’s market entry strategies have been quite varied in the international markets. While some strategies such as those adopted in Mexico and China have largely proven successful, the company has had to exit markets like Germany and Korea due to poorly executed strategies and lack of understanding of these markets (Quelch, 2011). Wal-Mart entered the Mexican market through a 50:50 joint venture with a leading local retailer, which was soon acquired to give Wal-Mart a leading position in the market.

The strategy here and in Canada was to leverage local purchasing power, local economies of scale and utilize local logistics to the best extent possible. While there were some early mistakes in terms of determining the right product mix and understanding local customer preferences, these shortcomings were nevertheless resolved quickly to pave the way for better profitability (Quelch, 2011). Wal-Mart entered Hong Kong through a joint venture with a noted Thai retailer. The company had no experience with Asian markets

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