Potentials for Walmart in Wider Africa
Does the wider African continent hold potential for Walmart? Yes it does. Africa (sub-Saharan Africa in particular) holds so many prospects because of its rapid economic growth, abundant natural resources, a relatively young population and an increasing literacy level. The International Monetary Fund (IMF) estimated that Africa grew twice as fast as it had been growing over the past two decades. It recorded a 6% growth rate per annum; a growth rate much faster than the developed world.
Furthermore, while the populations of developed world (e.g. US, Japan, China and Western Europe) are aging fast, the reverse is the case in Africa (i.e. a higher percentage of the African population are young; median age in Africa is about 20 as compared to 30 and 40 in Asia and Europe respectively). Sub-Saharan Africa recorded 40% of its population to be below 18. Furthermore, technology has been embraced and can be seen as an accelerant to the economic growth currently enjoyed. Africa now has the fastest growing middle class (middle class, people who spend equivalent of $2 to $20 a day) with 34% of the Africa’s population spending $2.20 a day; over a 100% higher than it was 20 years ago. The number of middle class Africans is projected to grow by 42% to 1.1 billion in population by 2060. Notable countries in this regards are (with the exception of South Africa); Nigeria, Ghana, Kenya, Rwanda, and Botswana.
For example, Ghana's immature mass grocery sector offers impressive opportunity for retailers looking to invest in this largely undeveloped sector. With the country's economy and consumer outlook positive, in our view, long-term growth prospects for the sector provide an attractive platform from which to...
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...al knowledge, we should ensure me create systems that promotes cultural awareness among our staff. A good approach would be to localize our staff base and monitor performance regionally. A good initiative would be to introduce feedback systems that allow participatory information sharing between the company and its key stakeholders.
Considering the lack of adequate infrastructure in most African stores, we could introduce smaller chain of stores to ease accessibility by more people mostly in rural areas where people have less money to spend and poor transportation network.
The most advised form of entry would be to form a strategic alliance with a local relatively mass grocery store to test and gain deeper understanding of each market. Subsequently, to deepen market position, the company would do more acquisition of grocery stores with a cultural fit advantage.
RNRA Team, “Supermarkets, Fresh Produce and New Commodity Chains: What Future for the Small Producer?” Hot Topics: February, 2004.
Wal-Mart could also chose to operate in dispersed rural locations to thwart competition from discount retailers and hence achieve higher revenue realization. Wal-Mart could also introduce newer product lines including organic food .Wal-Mart also should focus to increase market share in the grocery and vegetable market segment apart from the consumer durable portfolio. Wal-Mart should also focus to achieve higher margin realization by investing in specialty services like pharmacy with special tie-ups with insurance groups for high volume purchases.
America 's grocery industry is a big business. It is so big in fact, that a few major corporations dominate it. For example Walmart 's grocery business in the US accounts for approximately 56% of the company 's sales. This is the equivalent of $188B per year. It 's nearest competitor, Kroger 's total sales volume for 2014 was less than one third that of Walmart. (Soni, par. 1) Another
There are significant barriers to entry in the grocery store industry that prevent new entrants from taking market shares from preexisting giants, such as Kroger and Whole Foods. Economics of scale are prevalent in this industry, forcing any potential competitors to overcome large upfront costs to be able to compete in terms of pricing. In addition, there are strong exit barriers. Companies have large investments in property, inventory and distribution channels that they are not willing to lose in order to leave the industry. Finally, local farmers are not likely to gain a large force in the industry, as many are not willing or able to invest in obtaining certifications from the government.
When it comes to technology, Africa has almost everything the rest of the world does. Although we may be slightly behind, technology is fast growing on the continent. For instance, Africa is the fastest region when it comes to mobile growth. It is estimated that over 67% of the population on the continent have mobile phones, and 27% have a device that can access the internet. Simply put, 27% of the total population of Africa has mini computers at their disposal! Africa is not only thriving on mobile technology and internet, but also other forms of technology that contributed immensely to the day-to-day life on the
...ur world; as the wealthy countries continue to excel and developing countries continue to regress there's countless negative consequences that can occur. And “will” occur if society continues on in mindless consumption. In a world completely engrossed in the pursuit of perfection, how can we deny the exponential oversight that is the Walmart corporation? Under the false notion of providing better prices on the products necessary in our daily lives, Walmart is in fact ensnaring society within its alluring trap-brimming with environmental hazards, immoralities and greed. Next time you find yourself standing at the checkout of your local Walmart superstore, stop and think. Are the savings you hold in your hand truly worth sacrificing the future of your community and essentially the world? If not, please make your way to the exit and have yourself a wonderful day.
Sociologist George Ritzer coined the term grobalization in his 2007 novel, The Globalization of Nothing. In it, Ritzer defined grobalization as “the imperialistic goals, desires, and needs of large corporations, or even entire countries, to impose themselves in various areas of the world so that their power, influence and profits can grow” (2007). Grobalization is a combination of the words “growth” and “globalization. Grobalization is used over globalization because it speaks specifically to the “growth imperatives of organizations and nations to expand globally and to impose themselves on the local (Ritzer, 2007). As a form of unbound capitalism and cultural imperialism, grobalization is both a specific and extreme form of globalization.
Priscilla. “The World Economy and Africa.” JSpivey – Home – Wikispaces. 2010. 29 January 2010. .
African nations regularly fall to the bottom of any list measuring economic activity, such as per capita income or per capita GDP, despite a wealth of natural resources. The bottom 25 spots of the United Nations (UN) quality of life index are regularly filled by African nations. In 2006, 34 of the 50 nations on the UN list of least developed countries are in Africa. In many nations, the per capita income is often less than $200 U.S. per year, with the vast majority of the population living on much less. In addition, Africa's share of income has been consistently dropping over the past century by any measure. In 1820, the average European worker earned about three times what the average African did. Now, the average European earns twenty times what the average African does. Although per capita incomes in Africa have also been steadily growing, and poverty falling, measures are still far better in other parts of the world, such as Latin America, which suffers from many of the same disadvantages that Africa has.
Challenges in Today's U.S. Supermarket Industry. 2014. Challenges in Today's U.S. Supermarket Industry. [ONLINE] Available at:http://msdn.microsoft.com/en-us/library/aa479076.aspx. [Accessed 31 March 2014].
The food and staples retailing is an increasingly competitive industry. The market giants (competitors) are Coles (owned by Wesfarmers) which has 741 stores across Australia and plans to add 70 m...
Artadi, Elsa V., and Xavier Sala-i-Martin. The Economic Tragedy of the XXth Century: Growth in Africa. Cambridge, MA: National Bureau of Economic Research, 2003. Print.
Wal-Mart is facing a significant global competition from Ahold of Holland, Tesco in the UK, and Carrefour from France. Carrefour, the world's second-largest retailer, is perhaps the most globalized- in 2006, it generated sales outside of France for more than 50% from the pioneer concept of hypermarket operated in 26. Regard to the annual sales in that year, Wal-Mart produces less than 20% as compare to Carrefour from its international operations. However, this means that there was room for significant global
...nal supermarket retailers will reinvent themselves over a period of time, in order to attract and maintain a loyal customer base. New concepts, neighborhood marketing, and innovation will be the key to success over the next decade.” (Imlay, 2006) What is propose is that a smart mix of products, perhaps catering to demographic tastes and needs, may tempt the shopper not drive out to the big box store, but instead loyal to their local market.
A good location can have a significant impact in attracting potential customers, thus improving sales. Especially in the case of a supermarket, location is more important than other business sector. Customers never drive long distances to only buy daily necessities. Moreover, favorable location gives efficiency to company’s logistics because unnecessary moving cost can be cut down. So, we can say that it is important factor for the successful operation of the supermarket.