Research a top multinational company in the world including its international strategy over the last 10 years. Using your research, write a report explaining its strategy, including a discussion of the following questions:
- What sort of international orientation does it have?
Do you think it is ethno-, poly-, or geocentric? - What were the decision factors for the locations it chose to expand in?
- Did it have the core capabilities to succeed in those markets?
- Think about its objectives, how it chose its countries, what opportunities and constraints were apparent at the time, and what it needed to do to succeed in those markets.
- Define what a value chain dispersal and integration strategy is, and then describe how the strategy is organized around it.
For International business strategy: assignment help , We have selected the Wal-Mart’s multinational company. Wal-Mart’s International Strategy Wal-Mart is a leading grocery retail company of the world. Company operates its business in more than 27 countries under the name of the 69 different banners in the world. In addition, company has employed more than 2.2 million associates worldwide. The net sales of the company, at the end of fiscal year 2012, were approximately $444 billion. Company operates its business through three main ways such as retail outlets, online and on mobile devices (Wal-Mart, 2012). This helps the company to cover more customers across the world. This paper discusses the Wal-Mart’s strategy of international expansion. This paper also describes the sort of international orientation of strategy. Along with this, through this paper, the decision factors that the company considers in international expansion have also explained. This paper also explains the core capabilities, opportunities and constraints and the success factors that are needed in the markets for Wal-Mart. At the end, this paper also defines the value chain dispersal and integration strategy and the linkage of Wal-Mart’s strategy with them.
Sort of International Orientation in Strategy: The strategy of Wal-Mart is an integrated strategy that includes attitudes and beliefs. The strategy of Wal-Mart more focuses on the vision of the company that is related to the, meet the needs of the consumers and providing best possible services, so that they can enjoy a lavish lifestyle with low cost. In addition, the strategy of the firm also focuses on establishment of organization in international market as the best discount stores that provide low cost and quality services to the customers. Wal-Mart’s strategy also has the international orientation in terms of providing a competitive advantage to the company in international market, as it uses cost leadership strategy to differentiate itself. In the last 10 years, company’s marketing strategy more focuses that low prices are guaranteed for every transaction (Bergdahl, 2008). Moreover, company also uses international advertising in order to attract global customers for the retail outlets and to motivate them to purchase products at low cost. In last 10 years, company’s strategies have also focused on the development of brand image. In this, company developed the trademark and brand image of the company, as a luxuries brand, which is affordable at low prices in the mind of the customers (Zentes, Morschett & Klein, 2011). It has helped the company to attract new customers for the retail outlets at different locations and cities. We also provide case study assignment help on business strategy to our clients.
Nature of Wal-Mart Strategy: As per nature, in the last 10 years, Wal-Mart’s used ethnocentrism approach in its strategy. It is because the top management of the company makes the strategies at the main headquarter and applies this strategy across the world at all retail outlets. Company also provide training to executives at headquarter and send them to the different places for execution (Bruce, Moore & Birtwistle, 2004). It shows the ethnocentrism of Wal-Mart in the international market.
Decision Factors for the Locations: There are several factors that company considered in selecting the location for expending the business. The detailed description of these factors is as follow: Competition: In order to select the right location for expending, company has considered the level of competition in the country. Company is committed to providing low-cost products to the customers with high quality in comparison to its competitors. The low level of competition helps the company to maintain the costs of the products in the market (Hicks, 2007). Cost of Labor: Cost of labor was one of the most significant factors that company has analyzed in order to expand its market in international market. Company selects the location, where the cost of labor is low and they have good skills and experience of retailing because it helps the company to maintain the low processes costs in the company. It directly impacts on the product costs and facilitates the company to maintain low product cost and high quality of the products and services in the international market (Dube, Lester & Eidlin, 2007). Economic Perspective: Company also selected locations on the basis of economic perspective. Through the strong economic perspective of country, company took the advantages of a healthy and high-income spending consumer market (Malone, Laubacher & Morton, 2003).
Core Capabilities to Succeed in the International Markets: In order to succeed in the international market, company has the core capabilities that create a competitive advantage for the company and also provide effective operational activities that ensure the success of the firm in the international market. Company has various core capabilities such as positive culture, diversity management, low-cost operations and distribution channels etc., which help the company to maintain a customer base in global market and achieve competitive advantage. In order to select the country, company had various opportunities such as attract local customers, provide employment to the local people, develop their living standard, provide low cost products in an easy way and develop market share and achieve competitive advantage over the local as well as international competitors (Dube, Lester & Eidlin, 2007). In order to select country for expansion of business, company also faced several problems that reduced the competitiveness of the company. These constrain include trade unions negotiations, workers’ demand for wages, working environment, conflicts, government rules, political rules and regulations, relationship with the local suppliers etc. These constrain reduced the growth of the company and also presented the problems in selecting a country to expand the business. To get success in new markets, company needs sources to create an effective and supportive relationship with the local government that will help the company to influence local people. Company also needs to develop the relationship with the local societies and ensure them about it products and service for customers and its policies towards the human resources (Soderquist, 2005). This is helpful for the company to create strong business in the local market.
Link of Strategy with Value Chain and Integration Strategy: Value chain dispersal refers to the grouping the firms’ activities into several categories such as primary activities and support activities. Primary activities include inbound logistic, operations, outbound logistics, marketing and sales and services. These activities help the company from purchasing raw material to provide finish goods to the end users. On the other hand, support activities include the firm infrastructure, HRM, technology and procurement. These activities support the company to achieve competitive advantage (Hill & Jones, 2011). In the similar way, integration strategy helps the company to increase the value of value chain strategy. With the help of integration strategy, company can also transfer the knowledge and skills, tools, content to the employees. The strategy of Wal-Mart also follows the effective value chain and integration strategy in order to develop the competitiveness in the local and international market. Company’s strategy create effective primary activities such as company has effective inbound and outbound logistics that supply the products to the right customers in the low time.
Company also has supportive warehouses to stores and provides products to the retail outlets. In the same way, company has effective infrastructure and proper ambiance to attract customers and provide a stress free working environment to the employees. This supports company to provide training and development programs to the human resources. Company also uses supportive technology that helps the company to achieve competitive advantages (Parnell, 2003). In addition, innovative IT tools and two ways communication process is also effective to ensure the flow of customers and manage proper infrastructure.
Conclusion: It can be concluded that Wal-Mart has effective and supportive international strategy that helps the company to select right country for operations and in achieving competitive advantages. To select right country, company considered several factors that support in operations. In this, economic and political factors are important, which create problems for the company in the market. For this, company needs to develop the rules and regulations and needs to develop the supply chain that attracts customers towards the company.
References Bergdahl, M. (2008). What I Learned From Sam Walton: How To Compete And Thrive In A Wal-Mart World. USA: John Wiley & Sons. Dube, A., Lester, T. W. & Eidlin, B. (2007). A Downward Push: The Impact of Wal-Mart Stores on Retail Wages and Benefits. UC Berkeley Center for Labor Research and Education, pp. 1-10. Hicks, M. J. (2007). The Local Economic Impact of Wal-Mart. USA: Cambria Press. Hill, C. W. L. & Jones, G. R. (2011). Essentials of Strategic Management. USA: Cengage Learning. Malone, T. W., Laubacher, R. & Morton, M. S. S. (2003). Inventing the Organizations of the 21st Century.USA: MIT Press. Moore, C., Bruce, M. & Birtwistle, G. (2012). International Retail Marketing. UK: Routledge. Parnell, J. A. (2003). Strategic Management: Theory and Practice. USA: Dreamtech Press. Soderquist, D. (2005). The Wal-Mart Way: The Inside Story Of The Success Of The World’s Largest Company. USA: Thomas Nelson Inc. Wal-Mart (2012). Our Story. Retrieved from http://corporate.walmart.com/our-story/ Zentes, J., Morschett, D. & Klein, H. S. (2011). Strategic Retail Management: Text and International Cases. USA: Springer.
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