Multi-National Corporation Major Multinational Corporation Term Paper

  • Length: 8 pages
  • Sources: 8
  • Subject: Business
  • Type: Term Paper
  • Paper: #55981732

Excerpt from Term Paper :

These shortages decrease the company's competitive position in the U.S., but even more so abroad.

Within the international setting, one additional strategic aspect is represented by the relatively low position of the retailer. While it is the undisputable leader of the American retailing industry, within the international arena, Wal-Mart's international position is rather weak.

The company had previously attempted to penetrate the European market, but had failed. The most eloquent case is represented by Wal-Mart Germany. The company opened the store in 1998 as a result of gradual purchase of local chain stores.

Wal-Mart Germany implemented the same business model as in the United States. There was the joyful morning cheer, the casual outfits and the expectation of intense social interaction. Still, this behavioral model was not applicable in Germany, where the population is more reserved and private. Additionally, the American retailer penetrated the German market with the same strategies as in the United States, without customizing them. But the German market was different, the consumers revealed different purchase behaviors and the competition was highly intense from established European retailers such as French Cora, German Metro or French Carrefour.

Wal-Mart "pursued a fundamentally flawed internationalization strategy due to an incredible degree of ignorance of the specific features of the extremely competitive German retail market. Moreover, instead of attracting consumers with an innovative approach to retailing, as it has done in the U.S.A., in Germany the company does not seem to be able to offer customers any compelling value proposition in comparison with its local competitors. Wal-Mart Germany's future looks bleak indeed" (Knorr and Arndt, 2006).

All in all, Wal-Mart failed in Germany because it did not understand the principles of the German market and it did not adapt to them. This ability to understand a foreign market and to develop a customized business model to serve its specific needs is a key success factor. In other words, the future success of Wal-Mart is directly pegged to its strategic ability to diversify its business model in order to integrate economic, social, political and other differences across the markets it serves.

In this setting then, the future of Wal-Mart seems uncertain and the uncertainties are pegged to the inability of its strategy to improve its image within the national market and its position within the global market. In the situation in which the company devises new strategic measures to address these two issues, then it is expected for it to ensure its sustainable growth. On the other hand however, if the company does not strategically strengthen its domestic image and international position, its success might be short lived and unsustainable within the long-term.

5. Conclusions

Wal-Mart is one of the largest economic agents in the world and the undisputable leader of the American retail industry. While it is blamed for numerous shortages in its approach of the various stakeholder categories, Wal-Mart remains the epitome of corporate success and an emblem of the American economy.

The future of Wal-Mart is expected to remain embedded in the long lasting culture of the lowest possible price, as this had been created by founder Sam Walton. The current analysis has however shown that while this strategy is successful in attracting customers, in the long-term it has to be supported by strategies which create sustainability. At this level then, it is recommended for Wal-Mart to pay more attention to the needs of its stakeholders and to better diversify its international strategic approach.

References:

Blanchard, R., The digital challenge for libraries: understanding the culture and technology of total information, iUniverse, 2005

Knorr, A., Arndt, A., Why did Wal-Mart fail in Germany? Institute for World Economics and International Management, http://www.iwim.uni-bremen.de/publikationen/pdf/w024.pdf last accessed on November 10, 2011

Ireland, R.D., Hoskisson, R.E., Hitt, M.A., Understanding business strategy: concepts and cases, 2nd edition, Cengage Learning, 2008

Wilbert, C., How Wal-Mart works, How Stuff Works, http://money.howstuffworks.com/wal-mart.htm last accessed on November 10, 2011

Operating divisions, CIIPP, 2009, http://walmart.ciipp.com/en/article-list-303.html last accessed on November 10, 2011

Wal-Mart Stores Inc., Morningstar, 2011, http://quote.morningstar.com/Stock/s.aspx?t=WMT last accessed on November 10, 2011

Wal-Mart Stores Inc., Cogmap, http://www.cogmap.com/chart/wal-mart-stores,-inc. last accessed on November 10, 2011

Wal-Mart 2011 Annual Report, http://investors.walmartstores.com/phoenix.zhtml?c=112761&p=irol-reportsannual last accessed on November 10, 2011

Wal-Mart Website, 2011, http://www.walmart.com…

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