Wal Mart Essay

732 WordsMar 14, 20143 Pages
‘Always Low Prices’: Wal-Mart’s internationalisation strategy In Management, Marketing, Real Estate on January 17, 2013 at 1:19 pm 1) Is Wal-Mart a multinational enterprise? Why? Wal-Mart may be considered a multinational enterprise because it has operations in nations other than the country it is headquartered in. Wal-Mart is based in Arkansas and holds an 8% share of the US market. While it operates under the Wal-Mart name in the 50 states and Puerto Rico, the MNE conducts businesses under 55 different names across 15 countries. It appears in Mexico as Walmex, Asda in the UK and India as Best Price. An MNE is defined by the geographic spread of its business, not by its international success. Wal-Mart has become the world’s biggest company in terms of sales revenues through the success of its scale strategy in the Americas, Britain and China. However, this formula failed to advance the firm in Germany and South Korea. 2) Why is Wal-Mart making foreign direct investments in Europe? Foreign direct investments are equity funds invested in other nations by MNEs. These companies will then have control of foreign affiliates, providing access to markets, economic unions, technological and managerial knowledge and labour pools. Wal-Mart has directly invested in Europe since the turn of the twenty first century, with the purchase of Interspar and Wertkauf. Wal-Mart continues to invest to increase its sale revenues, especially since experiencing a slump domestically. As of 2011, the international unit generated over $109 billion in revenues, accounting for roughly 26% of total sales. European operations protect the MNE from fluctuations in the value of the US dollar, by generating earnings in other currencies. This is an essential consideration for a company which makes a lot of purchases overseas. Wal-Mart has also learnt to conduct business differently,

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