WAL MART Global International Expansion
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Transcript of WAL MART Global International Expansion
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WAL MARTGlobal Competitors
16/11/2010 SMM 208 1
GlobalRanking
Company DomesticCountry
2006 retailsales (US$m)
1 Wal-Mart Stores, Inc US 344,992
2 Carrefour S.A. France 97,861
3 Tesco Plc UK 79,976
4 Metro AG Germany 74,857
5 The Kroger Co US 66,111
Source: The top five global retailers
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WAL-MART S International Operations
Stiff competition from K-mart and Target.Difficult to sustain Double-Digit Growth Rate.
Suffering from soft sales and rising inventorieswith respect of its sam s club division.Opportunity to tap potentially vast market.
Globalization and liberalization createdopportunity in early 1990.
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Period Sales % of Change EBIT % of Change DepreciationTotal NetIncome % of Change
Jan-10 405,046.00 0.99 22,066.00 5.59 7,157.00 14,414.00 8.75
Jan-09 401,087.00 7.29 20,898.00 3.67 6,739.00 13,254.00 3.04
Jan-08 373,821.00 8.43 20,158.00 6.27 6,317.00 12,863.00 5.53
Jan-07 344,759.00 11.59 18,968.00 8.17 5,500.00 12,189.00 6.85
Jan-06 308,945.00 9.75 17,535.00 7.44 4,645.00 11,408.00 8.83
Jan-05 281,488.00 9.82 16,320.00 14.99 4,185.00 10,482.00 18.29
Jan-04 256,329.00 11.63 14,193.00 14.76 3,852.00 8,861.00 13.34
Jan-03 229,616.00 12.55 12,368.00 18.97 3,364.00 7,818.00 21.25
Jan-02 204,011.00 6.63 10,396.00 2.77 2,700.00 6,448.00 2.43
Jan-01 191,329.00 - 10,116.00 - 2,868.00 6,295.00 -
Financial data in U.S. DollarsValues in Millions (Except for per share items)
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Canada
1994, MarchAcquire 122 WoolcostoresWoolworth Corp.
WAL MARTDiversification
and International Expansion
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Mexico
Year 1992
Joint ventureCifra S.A. (Mexicos largestretailer)63 stores (22 Sams Clubs, 11Wal*Mart supercenters)
WAL MARTDiversification
and International Expansion
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South Americ aP lan to enter in1995Brazil &Argentina
WAL MARTDiversification
and International Expansion
Braz ilJoi n t Ve n ture with Loj as
Americ anas
Arge n ti na Gree nf iel d Opre a tio ns
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J apanJoint Venture with SeiyuLtd
Ind ia Joint Venture with Bharti
Chi naJoint Venture with
Shenzhen InternationalCredit InvestmentCompany
Germ anyAcquisition of Wertkauf and
IntersparWAL MART
Diversification and International Expansion
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Cou n tr y Mode o f Entr y
Str a teg y Fa te o f the de a l
Canada(**290)
Acquiri ng a we ak pl ay er
Woolco 122 stores in 1992 VERYSUCCESSFULWipe d out T.E a to n Comp any, a ma jor pl ay er
Oper a te d in are as th a t h av e highbr and recog n itio n
Oper a te d in are as requiri ngmi nimum cultur a l ada pt a tio n
Emph as ise d on cu stomer ser vice &store de sign
UK(**337) Acquiri ng Acquire d ASDAs oper a tio ns (232 store s)1999
SUCCESSFUL.Competitor s-Te sco s and Sains bur ys
Cas hi ng o n the M&A syn ergie s
Mexico(**919)
Joi n tVe nture
Entere d in 1997 JV with Cif ra
Loc a l m ar ket kn owle dge
Overc ame cultur a l b arrier s
SUCCESSFUL.(50% of the m arket )
Competitio n by Carre f our
SITUATIONAL ANALYSISGOING GLOBAL
** no.of stores operating as on Jul2007
Three successes out of ten.Successes 3/10
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Cou n tr y Mode o f En tr y
Str a teg y Wha t w as the fa te o f the de al
Germ any
(**0-88)
Acquiri ng Acquire d large st pl ay er s Wert ka u f and In ter spar
FAILED.Entere d in 1997(21+74 store s);Exite d in 2007-Americ an St yle Wor king pr actice s-High L abor Cost s.-Mana geme nt -- St aff Rif t s
-Competitor s: ALDI and LIDI (che ap ) .
Simil ar bu sine ss and HR mo del s
Met E U gui deli ne s f or bu sine ss
Braz il
(**298)
60 -40 JV Le ver age d experie nce o f Mexic an m kt s Whe n e ntere d in 1995
Alre ady Carre f our ,P de A , and Se ndas
So ver y tough competitio n (Pi w as e ate n )Emph as ise d on Customer ser vice
De velope d eco nomie s of ScaleUtili se d Discou nt t actic s
Arge nti na(**15)
Gree nf iel d Oper a tio n
Gaine d experie nce f rom Mexico & Braz il -Wro ng an ticip a tio n of the Arge nti ne
-Competitio n by Carre f ourEco nomie s of Sca le
SITUATIONAL ANALYSISGOING GLOBAL
Three successes out of ten..
** no.of stores operating as on Jul2007
3/10
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SITUATIONAL ANALYSIS GOINGGLOBAL
WHY GLOBAL - To survive
Why was growth so important?
Capital market expectations-continuous sales and profits.
Expectations of its own employees-ESOPS.Saturated domestic market.U.S. just 4% of world's population-(rest 96% -already dented)Emerging markets-tremendous opportunities.
What were its strengths?
Tremendous buying power-P&G,Kelloggs,Nestl,Coke,Pfizer,etcDomestic knowledge bases & competencies.
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STEP 1-DECIDING COUNTRY-specifics of the business,competitive and economic environments
Acquiringan existing player
(GM,CN,UK,SK,PR,JP)
Starting new storeson own
Joint Ventures(MX,BZ)
STEP 2-DECIDING STRATEGY
Start greenfield*operations .(AG,CH)
SITUATIONAL ANALYSISGOING GLOBAL
*A new operation that is built from the ground up. `
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