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1. For Assignments Solution Contact
info.casestudyhelp@gmail.com
www.casestudyhelp.in
+91 9902787224
Global Business Environment
Q.5 Case study
The company is involved in the serving of over 179 million people in one year and it
also possesses over 2 million associates all over the world. The number of stores
possessed by Wal-Mart numbers to over 7, 343 and its Sam’s Clubs are also present
in over 14 markets. Hence it is not surprising that it is the biggest retailer in the
whole of United States. From the year 2002 the company has been topping the list
of fortune 500 list and in the year 2006 it was pushed to the second place, next only
to Exxon- Mobil due the rise in the price of oil in that year. In the year 2008, the
annual revenue generated by Wal-Mart was over 378 billion dollars. Hence the
company continues to be successful in many nations exploiting the human resources
as well as the other resources in the nations. Its idea is to capitalise on the strategy
set by the company for global expansions and the present targets of Wal-Mart are
the big nations with huge human resources like Russia and India.
The strategy used by Wal-Mart at the multinational level is being modified in such
a way that it becomes the transnational strategy and the key aspects of this
strategy includes response at the national level, operations at the international
level and also taking lessons from the operations that are being conducted on a
global scale. The aim of the company in following such an approach is that it should
become the best choice for goods that are low cost in the United States as well as
the whole world. As the company is basically a retail company it stresses on the
concept of orientation of the consumers by acquisition as well as distribution of
goods at a low cost and at the same time facilitating learning on a global scale by
the process of decentralization, tackling competition over the borders and by
sharing its acquired knowledge. But still in the global business arena, the company
is relatively new and on its way to become a leading player. The stress placed by the

2. company on the concept of national response has to an extent, brought about
reductions in the operational efficiency of the company because it was not able to
accomplish economy of scale which is enjoyed by the customers when it comes to the
products that are standardized.
The company is involved in the formulation of blueprints for the managers when it
comes to the strategies which they are supposed to follow. According to the needs as
well as the culture of the people there is a high level of adaptation and the company
has its location which is proximal to its market. The company also shows a lot of
sensitivity when it comes to individual needs of every nation and also responds in
an appropriate manner to these needs. There is also close contact and co-operative
working shown by the company with the respective government so that every rule
or legislation that has been passed by the government could also be taken into
account while designing the strategies. The company is also involved in a lot of
community works by provision of sponsors for the student community and
contributes its share to the welfare of the people in the nations where it has its
operations.
Each of the stores operated by Wal-Mart is from that of the product being stocked
by the company which would move towards the equipment at the front end and this
would go a long way in helping checkouts in a rapid manner with the philosophy set
by the company in place- provision of goods at low prices every day and at the same
time providing customer services that are of top quality. Hence the added
advantage of the low costs is that the expenses incurred in organisation of
promotions for sales could be cut down to a large extent. Moreover the predictability
of sales also increases. The company firmly believes in the system of “cross docking
inventory system” and hence has invested a lot in the same. The process of cross
docking has led the Wal-Mart to attain economies of scale and this has in turn
brought about considerable reductions in the costs that are incurred for sales. In the
system followed by Wal-Mart, there is a continuous delivery of the goods to the
stores in a time of maximum two days and at times there are no requirements even
to inventory them. Hence the shelves of Wal-Mart are refilled faster than four times
of the existing competition in the market.
This is a particular advantage possessed by the company when it comes to
competition. The power of buying of Wal-Mart is leveraged by means of purchasing
in bulk quantities and also the company takes care of its own distribution. Hence
everyday low prices are guaranteed by the company and hence it has become a one

3. stop shop. Hence at present the company owns stores in a variety of companies like
Argentina, Mexico, Brazil, Canada, UK, Korea china and also in Germany.
The major reason behind the success of Wal-Mart lies in the fact that the company
believes and concentrates on the strategy of single business. This is the strategy
that has been providing the company with success over a period of over 30 years. In
the three decades the company has never believed in the concept of diversification
for the sustenance of its growth and also its advantages at the competitive level.
Hence the services provided by the company and the low prices offered are the
major reasons behinds its success. The concentration on one particular strategy also
poses a threat to the company because it is equivalent to place all the eggs in one
single bucket.
Question:
(10 × 2 = 20)
1. Explain Wal-Mart’s global expansion strategy.
2. What is single business strategy? Comment your view on the strategy.
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