Wal-Mart
In 1945 Sam Walton opened his first variety store in Newport, Arkansas. It was a Ben Franklin franchise. After five years it became the number-one Ben Franklin Store for sales and profit within six American states . In 1950 Sam Walton opened Walton′s Five and Dime store in Bentonville, Arkansas, where Wal-Mart′s headquarter is still based today. It was only the third self-service variety store in the United States of America. Though it was still a Ben Franklin franchise Sam Walton bought in much more products from other sources . After successfully rolling out this model into other towns he and his brother James ′Bud′ Walton launched their first Wal-Mart in Roger, Arkansas in 1962. It was their first independent store. In 1969 Wal-Mart stores were incorporated as Wal-Mart Stores, Inc. Shortly after, in 1970, Wal-Mart now operating 18 stores with an annually turnover of $44 million went public. In the same year they opened their first distribution centre and their home office in Bentonville, Arkansas. With sales of $1.2 billion and 276 stores the company′s stock was approved and listed on the New York Stock Exchange in 1972.
This Text is looking at the impact Wal Mart's expansion outside the US has had on both the UK and the German grocery market places. It contains a demographic market analysis of both the German and UK grocery market and deals with possible movements caused by Wal Mart's entry to these markets. It also provides an overview of its US operations and long term strategy.
Part of the text is a comprehensive analysis of Wal Mart's market entry strategy in relation to market entry strategy.
Table of Contents
1 Wal-Mart – an Introduction
1.1 Wal-Mart Culture and Strategies
1.1.1 Ten Rules on running a successful business
1.1.2 Corporate Structure and Strategy
1.2 Wal-Mart USA –Store Portfolio
1.2.1 Discount Stores
1.2.2 Supercentres
1.2.3 SAM’s Club
1.2.4 Neighbourhood Markets
2 Wal-Mart International
2.1 Internationalisation theories for the retail industry
2.1.1 Motives for Internationalisation
2.1.2 Strategic decisions for international retail businesses
2.1.2.1 Market Handling Strategy
2.1.2.2 Market Entry Strategies
2.1.2.3 Competitive Strategy
2.1.2.4 Planning Problems for international companies
2.1.3 Wal-Mart’s early years of internationalisation
3 Wal-Mart Germany
3.1 Entering Germany
3.1.1 Internal Challenges
3.1.2 External Challenges
3.2 Opportunities
3.3 Conclusion and SWOT Analysis
4 Wal-Mart in the UK
4.1 The British retail market
4.1.1 Consumer structure and preferences
4.1.1.1 Consumer Structure
4.1.1.2 Consumer Preferences:
4.1.2 Strategies and employment of marketing tools
4.1.2.1 Loyalty-Cards and Customer Relationship Management
4.1.2.2 Every Day Low Pricing and Trade Promotions
4.2 Asda and the takeover
4.2.1 Asda and Wal-Mart – a match made in heaven
4.3 The Wal-Mart Effect
4.3.1 The Impact on Competitors
4.3.1.1 EDLP – Competition on Price
4.3.1.2 Demographic and geographic factors
4.3.1.3 Non-food the new battleground
4.3.1.4 Conclusion
4.3.2 The changing environment for suppliers
4.3.2.1 Customer Relations Management and suppliers
4.3.2.2 Impact on British suppliers
4.3.3 Wal-Mart’s arrival – benefit for the consumer
4.3.4 Asda – internal challenges
4.4 Evaluation of the ‘Wal-Mart Effect’
5 Strategic recommendation
5.1 Recommendation for Wal-Mart Germany
5.2 Recommendation for Wal-Mart UK/Asda
5.3 Recommendation for Wal-Mart Europe
Objectives and Core Themes
This thesis investigates the international expansion strategies of Wal-Mart, with a specific focus on the operational challenges and market impacts of its entries into the German and British retail sectors.
- Analysis of Wal-Mart’s fundamental corporate culture and "Ten Rules" for success.
- Evaluation of international retail entry strategies, including joint ventures and acquisitions.
- Assessment of the "Wal-Mart Effect" on competitors, suppliers, and consumer expectations in the UK.
- Investigation into the specific obstacles within the German retail market, such as overcapacity and hostile regulatory environments.
- Strategic recommendations for Wal-Mart's future growth and European integration.
Excerpt from the Book
1.1.1 Ten Rules on running a successful business
Rule 1: Commit to your business. This is the most obvious of the rules. Sam Walton states that it is important to believe in the business more than anybody else. He also says that passion is like fever and everyone around will catch.
Rule 2: Share your profits with all your associates. Firstly this rule illustrates one major difference to other retail operators. Wal-Mart employees are not called as such but “associates”, partners, who work for a common goal. This ties in with rule number one, to create commitment and passion.
The other idea is sharing profits. In 1971 when Wal-Mart introduced this concept it was revolutionary. Sam Walton realised that by treating employees as partners and let them share the profits he will create a loyal workforce, which in return will provide the company with even higher takings.
Rule 3: Motivate your partners. Three ways of motivations are named: Monetary incentives, Challenge partners – encourage internal competition, Don’t become to predictable. The main idea behind this is to turn the workplace in an exciting environment.
Rule 4: Communicate everything you possibly can to your partners. The best way of explaining the principle behind this rule it is best to cite Sam Walton: “[…]The more they know, the more they’ll understand. The more they understand, the more they’ll care. Once they care, there is no stopping them. […]”
Summary of Chapters
1 Wal-Mart – an Introduction: Provides a historical overview of Wal-Mart’s origins, its growth in the US, and the foundational management principles established by founder Sam Walton.
2 Wal-Mart International: Examines the theoretical foundations of international retail expansion and details the company's early international ventures in North and South America.
3 Wal-Mart Germany: Analyzes the difficulties encountered by Wal-Mart in the German market, focusing on intense competition, regulatory hurdles, and structural challenges.
4 Wal-Mart in the UK: Assesses the impact of the Asda acquisition, evaluating how "Every Day Low Pricing" (EDLP) strategies influenced British competitors, suppliers, and consumers.
5 Strategic recommendation: Offers a critical evaluation of Wal-Mart's European performance and proposes future strategic directions to achieve sustainable success in these markets.
Keywords
Wal-Mart, Asda, Retail, Internationalisation, EDLP, Germany, UK, Supercentres, Competition, Supplier Relations, Marketing, Market Entry Strategy, Corporate Culture, SWOT Analysis, Consumer Preferences.
Frequently Asked Questions
What is the primary focus of this work?
This thesis examines Wal-Mart's international growth strategy and the specific challenges faced when entering the German and UK retail landscapes.
What are the central themes explored in the text?
The work covers core management principles, the impact of the Asda acquisition in the UK, the difficulties of standardizing corporate culture abroad, and strategies for global retail competition.
What is the primary research goal?
The goal is to evaluate Wal-Mart's international performance and identify strategic improvements for its operations in Europe.
Which scientific methodology is utilized?
The research relies on secondary data analysis, including corporate reports, retail market surveys, industry academic journals, and comparative performance indicators.
What topics are discussed in the main body of the text?
The text details Wal-Mart's internal corporate philosophy, its US store portfolio, the complexities of market entry, and the distinct competitive dynamics within the British and German markets.
Which keywords best characterize this work?
Keywords include Wal-Mart, internationalization, EDLP, retail competition, market entry strategy, and corporate culture.
How does Wal-Mart's "Productivity Loop" influence its strategy?
The loop illustrates how operational efficiency and cost reductions allow the company to offer consistently low prices, which in turn drives customer traffic and increases sales volumes.
Why did Wal-Mart struggle with its initial German market entry?
Challenges included underestimating the German market's cultural landscape, a rigid "one-size-fits-all" approach, slow store renovations, and high levels of local price-based competition.
- Quote paper
- Dipl Betriebswirt (FH), BA (hons) European Business, ACMA Axel Antoni (Author), 2002, The impact of Wal-Mart on the British retail market, Munich, GRIN Verlag, https://www.grin.com/document/5834
