1a. Wal-Mart is a US based multinational retail company that sells general merchandise and groceries. It has grown over the last fifty years into the largest retailer in the world. Today, nearly 260 million customers visit more than 11,500 stores under 65 banners in 28 countries and e-commerce sites in 11 countries each week. With fiscal year 2015 net sales of $482.2 billion, Wal-Mart employs 2.2 million associates worldwide – 1.4 million in the U.S. alone.
One of the strengths of Wal-Mart is the scale of operations. Wal-Mart is the largest retailer in the world with more than $400 billion in revenue and 10,130 stores. It makes Wal-Mart a giant retailer that is very difficult for other ...view middle of the document...
Also, there is high employee turnover. This increases firm’s costs, as it has to train new employees more often. The main reason for high employee turnover is low skilled and poor wages.
1b. Wal-Mart offers a wider range of products than any other retailer. It offers both branded and own label goods. Among some of the categories are:
• Electronics & Office
• Movies, Music & Books
• Home, Furniture & Patio
• Home Improvement
• Clothing, Shoes & Jewelry
• Baby & Kids
• Toys & Video Games
• Food, Household & Pets
• Health, Beauty & Pharmacy
• Sports, Fitness & Outdoors
• Auto & Tires
• Photo & Gifts
• Crafts & Party Supplies
1c. Wal-Mart in the U.S is ranked first in power distance and individualism, and second in uncertainty avoidance. This shows that there is unequal distribution of power of group member. Relationship between employee and employer is strict and rarely goes down to a personal level. Male workers are often very assertive and competitive where as female workers are more often like followers, doing as they’re told by their superiors. Wal-Mart employees accept familiar risks and fear of ambiguous situations as well as unfamiliar risks. Although Wal-Mart’s mission statement is “Saving people money so they can live better.” They did not take into account their employee’s welfare, and workers are not well taken care of.
2a. Wal-Mart selects it’s markets based on strategic importance of market. They expanded internationally so as to rise above competitors such as “Carrefour” from France as well as “Tesco” from the United Kingdom.
Wal-Mart has grown rapidly to the largest retailer in the world. Wal-Mart has been able to reap significant economies of scales from its global buying power, they have made used of their significant size exercise strong buyer power on suppliers to reduce the prices, this increase Wal-Mart’s ability to pass on lower prices to consumers, gain greater market share and ultimately reap greater profits.
2b. Wal-Mart uses two main types of market segmentation. The first type is regional. Regional segmentation involves grouping customers based on their physical location such as by city, county, state, region, country, or international region like Asia or Europe. For example, Wal-Mart does not stock snow shovels in its cities like San Diego because there is hardly snowfall in that side of the country.
The second type of segmentation is by demographics, which is based on the age of customers. In this type of segmentation, the company stocks its outlets to meet the tastes of its customers depending on their age in a certain region.
3a. The four key issues are culture differences, stiff competition, lack of scales and stores being located in undesirable locations.
3b. Because of culture differences, Wal-Mart does not understand the countries’ common practices; this will lead to misunderstandings and unhappiness among consumers, which will affect the success of Wal-Mart’s expansion. For example,...