Wal-Mart in Africa Case Study

WAL-MART IN AFRICA CASE STUDY

Jillian Kronfuss

Herzing University

Dr. Pogue

BU-690-7 BUSINESS INTEGRATION & STRATEGIC PLANNING 

While expanding the business in Africa, Walmart had faced multiple issues which included the opposition of some trade unions and Government.  Walmart’s expansion caused the huge loss of jobs in Africa due to its acquisition and because of that threat, these parties were severely against it.  Walmart’s unique growth happened in Africa when they bought Africa’s second largest store, Massmart and started their operations, there.  Walmart always implements low cost strategy while doing business in any country that they are in.  They reduce the cost of their production and allow everyone to purchase goods from them.  Walmart selected Africa because they considered Africa and emerging market with better growth.  (Wal-Mart in Africa, 2013).  

 Competitive Advantages Compared to Their Competition

Walmart is one of those companies which are enjoying a competitive advantage in their industry.  The main competitive advantage of Walmart is their cost effective strategy.  They provide quality products at a much lower cost than their competition.  They also have their retail stores in most of the countries which in turn provides easy access to their customers while its competitors are not as efficient as them which gives Walmart a large competitive edge.  Another advantage of Walmart includes their wide range of products with a large number of variety and many different products, all under one roof.  

SWOT Analysis

A SWOT analysis indicates that one of its strengths includes a reputation and brand that is so well known which gives them a strong market power compared to their competition.  The weaknesses of the company include the inability to adapt quickly to the local conditions such as in the African nations. Opportunities exist to offer diverse and customized products to the needs of the young and growing population of Africa.  However, the company faced threats from other major retailers such as Shoprite in the emerging markets which could pose a challenge to the growth of the company.  

The Recommendations

Walmart should do its best to adapt its business model to suit the local conditions in Africa.  This is due to the fact that the social, demographic, political and economic environment in Africa is very different from America which in turn means that the company needs to adapt its business model to suit the local conditions that are prevalent in the African nation.  One way to adapt to the local conditions is by differential pricing model for the company products.  Using a high store capacity to offer its products can also help overcome much of the digital infrastructure challenges faced in African countries (Rigby & Vishwanath, 2006). Walmart should make sure that they will remain the low cost leader always in all markets.  They need to keep their eyes and ears on other companies so that no one replicates their strategy.  They should also create a more consumer friendly environment to ensure that they fully satisfy their customer base.  They should arrange some events for their customers, as it will allow them the opportunity to get an entrance into other small towns of many other countries as well as find a family type of environment that the people are searching for.  Walmart should also put more focus on their products and maintain the quality and variety of their products. (Motsoeneng, 2015). Walmart would be much better off if they had a more polycentric orientation or even a geocentric attitude so as to penetrate the foreign market with respect to their locality and thus, to improve sales.