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Wal Mart Goes International Essay

2819 words - 12 pages

Wal-Mart Goes International:
Stepping into International Waters

The vision set by Wal-Mart is to continue progressing in the retail business not only in the United States, but internationally as well. The company's mission, provide cheap products and services to the public, claims to be the driving force that makes the company aspire in retaining leadership in the retail industry. This paper will explore reasons behind Wal-Mart’s engagement in an aggressive effort to penetrate the international market to sustain its growth in the coming years. The strategies utilized by the Wal-Mart company focus on market penetration, specifically since Wal-Mart is a highly recognizable brand. ...view middle of the document...

Wal-Mart has been surrounded by controversy since the death of originator, Sam Walton. To truly understand why people are so dissatisfied with the Wal-Mart Corporation, we must examine the drivers of globalization and identify the forces that affect Wal-Mart’s decision to transcend international waters.
Let’s begin with some historical insight of the originator Sam Walton’s plan for Wal-Mart. In the late 1940s, when Sam Walton was franchising a Ben Franklin's variety store in Newport, Ark., he had a simple but momentous idea. Like any retailer, Walton was always looking for deals from suppliers. Typically, though, a retailer who managed to get a bargain from a wholesaler would leave his store prices unchanged and pocket the extra money. Walton, by contrast, realized he could do better by passing on the savings to his customers and earning his profits through volume. This insight would form a cornerstone of Walton's business strategy when he launched Wal-Mart in 1962. For nearly five decades, Wal-Mart's signature "everyday low prices" and their enabler—low costs—defined not only its business model but also the distinctive personality of this proud, insular company that emerged from the Ozarks backwoods to dominate retailing. When you look at the drivers of globalization, many differences exist between the way business was and is conducted versus how it will be conducted in the future. With Wal-Mart fully focused on low costs, outsourcing and manipulation are considered innovative and necessary means to beat the competition. Walton understood that a major requirement for keeping costs down was controlling the payroll. As he would write in his 1992 autobiography, Made in America, “No matter how you slice it in the retail business, payroll is one of the most important parts of overhead, and overhead is one of the most crucial things you have to fight to maintain your profit margin.” Not only did Walton prefer to hire as few people as possible, but he also dreaded paying them more than he had to. Unions were particularly feared, and Walton did everything he could to fight them, almost always successfully. Wal-Mart’s rate of growth has been astounding and can be tracked from its inception; however that growth has been accompanied by two distinct kinds of perceptions among the public. On the one hand, Wal-Mart has been celebrated for its business innovations, which have set a new global standard for efficiency. On the other, it has been condemned for its hard-charging business practices. Globalization is the expansion of economic, cultural, political, and social systems in a way that accommodates financial, economic, and operational policies around the globe. The Wal-Mart Way Principle #11 states, “The ongoing success of your organization is in direct proportion to your ongoing commitment to grow.” (Soderquist, 2005). There is a clear idea that in order for Wal-Mart to continue its momentum, growth must never stop. Growth is the ultimate driver...

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