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Cultural challenges in international business
Cultural challenges in international business
Cultural challenges in international business
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How to operate successfully in an international environment; A case study of Wal-Mart in Germany Introduction Many business activities usually shape up the aspirations and daily activities of people in all parts of the world. This can be attributed to the fact that, Business enterprises present a wide and rich variety of different organizational goals and objectives which cater for the needs and wants of consumers starting from a consumer who purchases a loaf of bread to a giant oil exploration carried out by a big company for the government. Nevertheless, for a long time, many organizations have managed to maintain a stable relationship with the society and the environments in which they operate in. However with the ever deepening and expanding ties between the societies and many firms within their environments, relationships between them and the society becomes complex. Despite that organizations see themselves as global players in their operations and outlook, it is usually hard for them to adapt to changing circumstances and changing environment. This can be seen in the case for Wal-Mart in Germany, (Harrison, Dalkiran,& Elsey,2000). Strategic Problem facing Wal-Mart In less than eight years, Wal-Mart has successfully been able to open up over 85 stores in the whole world, however, it was not able to successfully integrate itself in Germany as in 2006, and the U.S retail giant left the market at over $1 billion USD. The domestic success of Wal-Mart is normally based on factors like low prices, high volume sales and even distribution channels that are streamlined of which none of these factors do well and fit in German’s regulatory regime or culture. The attitude of Germans plus their culture only favors the medium, and sm... ... middle of paper ... .... (2008), International Business: Environments and Operations, Pearson Education Dunning, J. H. (1993), Multinational Enterprises and the Global Economy, Addison-Wesley Harrison, A. L., Dalkiran, E., and Elsey, E. (2000), International Business, Oxford University Press , chapter 13, pp. 272-291 Hymer, S., (1976) The International Operations of Nation Firms: A Study ofForeign Direct Investment”, Cambridge, MLT Press. Laudicina, P. A. (2005), World Out of Balance: Navigating Global Risks to Seize Competitive Advantage, McGraw-Hill Porter, M. E. (1998), The Competitive Advantage of Nations, The Free Press IMD World Competitiveness Yearbook, International Institute for Management Development The Global Competitiveness Report, World Economic Forum Rugman, A. M. and Collinson, S. (2008), International Business, Financial Times Prentice Hall
Wal-Mart has had a significant economic impact on the US, as well as the economies of countries that have relations with the US. Wal-Mart is the world’s biggest company of any kind, with 80 percent of the households in America purchasing something from the superstore; it is the nation’s largest retailer. Wal-Mart’s continuing price reduction has given Americans the advantage of being able to afford 15 to 20 percent more than they previously could. (Hansen) In a world governed by globalization and greed, competition has become rigid; as a result firms like Wal-Mart have utilized advanced marketing strategies to insure that they are on the ‘neck’ of competition, and are the core deciders of the market. (Ortega) However, Wal-Mart made decisions that were of a disadvantage to aspects of the economy, including the depletion on a small scale of Small Town USA.
By building international reach; Wal-Mart would gain economies of scale, which increase the ability to reduce prices to its customers. Furthermore, global suppliers would help the company facilitate the entry process into new markets by having the “wisdom and support” of an established presence in the market who know customer trends and market needs and specifications. Not to forget the advantage of e-commerce in breaking the international barriers and increasing sales, which is already happening in Mexico through kiosks, where consumers order online and pay/pick at the
In the United States and all over the world, the entry and operations of big retailers like Wal-Mart into a small town sparks great controversy within the community. The fact that people contemplate on the fact that the policies and actions of Wal-Mart are destructive to a small town’s economy is not new. Most small town’s economies are run by subsistence and self-reliant traders. With time, the traders embrace the division of labor and specialization of skills in accordance with the trade, production and manufacturing needs of the community. In such a market, a simple move like a decision by the producers to sell directly to the consumers may spark
My objective is to analyze the two retail giants’ methodology to satisfy and maintain customer although that I anticipate Wal-Mart’s to be a better buy than Costco because of the gargantuan scale of Wal-Mart has constructed its commerce on saving the customer Our decision is to invest in Wal-Mart. The choice for Wal-Mart is on the basis that their functional-level strategy is really robust, nevertheless of the fact that they do not treat their employees well. The fact remains that they are financially stronger, have a better business-level strategy, and have a corporate-level strategy than Costco. Costco v. Wal-Mart: What must we learn about them?
Within an excerpt from, “The United States of Wal-Mart,” John Dicker explains that Wal-Mart is a troubling corporation. Dicker begins his article by discussing why the store is so popular within the news in an age of global terrorism, coming to the conclusion that Wal-Mart has a huge scope in the United States and that it has more scandals, lawsuits, and stories than any other supercenter. Continually, he goes on to explain that Wal-Mart outsources jobs and their companies demands makes it hard for employees to have livable wages and good working conditions. Furthermore, Dicker addresses the claim that Wal-Mart provides good jobs, by destroying this perception with statistics showing how employees live in poverty and that their union scene
Wal-Mart is one of the world's greatest assets to most people. It provides consumer's a place they can go to virtually get anything they need from, car repairs, to groceries, prescription's, even the latest toys and electronics. With all that said, this paper relates to the different forces in business that affects business: competitive, economic, political + legal + regulatory, technological, cultural + social, demographic, and natural forces. Although there are technically seven we are going to focus on competitive, political, technological, and natural forces.
Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.
According to Smithson, Walmart can expand its markets to new and emerging markets especially in the third world countries, which can significantly increase its revenues. Secondly, the company can reform is employment practices and improve the quality standard and in doing so, attract more customers and improve its brand image. On the other hand, the company faces threats such as the rising healthy lifestyle trend I that the company in most cases does not provide customers with healthy goods. At the same time, the company can capitalize on this aspect and increase its revenues. Aggressive competition from other discount retailers such as Target creates a great threat to the company (Smithson, 2015).
Roberts, Bryan. Berg, Natalie. Walmart: Key Insights and Practical Lessons from the World's Largest Retailer. Kogan Page Limited, 2012. Print.
Wal-Mart is now operating globally, and its main vision is for additional global expansion of operation and "promotion of ownership of ethical culture" to all of its stakeholders worldwide (www.walmartstores.com). The idea of Wal-Mart’s vision on ethical culture is key in globalization. Wal-Mart has had good reputation and competitive advantage worldwide because it has been able to embrace culture and diversity in its operations across nations. In promoting ethical culture, Wal-Mart helps its customers and stakeholders to take the right decisions and to do the right thing.
... and each division to have a different manger to work both for his store and for the company. They can increase there overseas branches by having a different strategic plans. They can even divide the products into different categories such as very high or low end products. Need to use new technologies with different approaches so that can ready to use new technologies with in a short span of time. The main generic strategy is to have over all cost leadership by which the Wal-Mart can control the cost. The supply and distribution system has to be more effective in present one so that they can save both time and money while doing distribution of there products from ware house to the stores.
The paper focuses on the increased complexity of globalized organizations and methods of altering the process within the structure. Business and environment change constantly to sustain development in emerging markets and increase efficiency. Integration of relationships and processes of the world systems, help to manage local, regional and planetary balance to manage duplication of success become conceivable. The retail giant Wal-Mart exhibits its ability to transform the organization asynchronously with the increase integration of globalization.’ Wal-Mart unveils the type of integration possible between globalization, and business services as it adapts, eliminating redundancies and repetitive movement. It observes the effect and influence, propagated on business through it use of supply chains, and influence.
Wal-Mart Stores, Inc. is a renowned retail goods superstore that sits atop the Fortune list at number one. It would be very difficult to find an individual who is unaware of Walmart’s position as the largest brick-and-mortar retail chain in the world. The company has thrived over the past few years and is continuing to grow by effectively managing its store operations and distribution strategies. One of the major contributors to the business consistently meeting market expectations is directly attributable to their management approach. Walmart has revolutionized the way retail companies manage their supply chains in more ways than one. But, perhaps the most revolutionary was the practice of unprecedented coordination with suppliers (Chekwa,
When Sam Walton died in 1992, some industry insiders doubted that the Wal – Mart chain that he had founded some 30 years earlier would retain its prominence as a discount retailer. Lost for good they feared, would be the “magic spark” that Walton used to light fires under the chain’s 1.3 million associates. And, as Wal – Mart stock failed to enjoy the same bull – market growth as many other companies in the mid – 1990s, the pundits appeared to be correct. Today, however, with stores in all 50 U.S. states and nine other countries, Wal – mart has rebounded, leading the pack of discount stores with record earnings. In fact, with $218 billion in annual sales and 100 million customers per week, Wal – Mart is the world’s largest retailer and was named “Retailer of the Century” by Discount Store News.
At the first, Wal-Mart only operates its business in home country. However, Wal-Mart became more integrated and independent by expanding internationally. In 1991, Wal-Mart start expands the business at international level which includes 26 countries outside of the United State such as Mexico, China and Canada. Now, Wal-Mart totally has more than 6100 stores in foreign country. The step taken by Wal-Mart is to improve and maintain their achievement outside of the home country. Wal-Mart’s strategy which expands their market at international level gains a lot of benefit to their business.