Wallmart

EXECUTIVE MEMO

Wal-Mart's must focus on growth by building a high quality, low price brand in the new markets of South Africa and Australia by using its established retail knowledge capital and expertise.

This strategy is recommended because Wal-Mart is:

* Facing increasing competition in local markets where already established

* Loosing market share in these new territories due to increasing presence of suppliers (from China and India) in these emerging markets

* Not maximizing potential and new revenue from access to these new markets

* Not leveraging access to new goods and product raw materials

The priorities are to:

* Conduct feasibility study and due diligence in recommended regions to establish mode of entry

* Mobilize resources for entry

* Execute entry to plan

Timeframes: 1.5 years

Budget: 350 Million USD

FIRST STAGE: CASE ANALYSIS

1) Identify the issues/problems

The following issues and potential problems have been identified:

- Managing and coordination across a multinational organization

- Competitive pressures of emerging companies, countries and territories (such as China, India, Russia, African states)

- Retention of market share and/or customer share of wallet

- Store and product branding protection and standardization

- Innovation and cross-region pollination of new systems, methods and techniques

- Knowledge management retention and development of personnel within regions

- Leveraging of executive and business intelligence systems for easier decision making

- Integration of multiple systems and technologies while maintaining technology as a core competitive differentiator

- Management of large asset and property base

- Growth and creation of presence in emerging countries including risk analysis systems

- Staff retention schemes and people management strategic issues

- Acquisition and purchasing policy for entry into new countries

- Customization and tailoring of products to meet the customs and traditions of customers within countries.

The pros promoting the effectiveness of Wal-Mart include:

* The organizations ability to entrench an awareness, create ownership and build a culture of adding true sustainable value to a countries economy, by generating new opportunities to in turn promote economical growth.

* Building an 'economy of retailers' with regards to Wal-Marts use of conceptual frameworks, intellectual capital, structures and networks of funding possibilities from across regions.

* Generating a successful track record in the countries, where established, with successful ventures and remaining entrenched in the country as a dominant player

* Promoting itself in building a supportive and loyal 'customer' base by customizing its offering to the local conditions

* Wall-marts ability to generate sustainable revenue streams that allows them to fund new growth.

The cons detracting Wal-Mart from effectiveness include:

* Sustainable distribution and supply chains within countries become increasingly difficult to manage and implement

* Wal-marts cultural clashes and impacts to promote itself outside of the immediate affiliate network sufficiently to aid in the generation of sustainable funding.

* Local conditions, regulations, compliance and traditions are key factors which hamper growth.

* Trustworthy and capable existing retail chains able to become Wal-Mart caliber stores seem limited within territories.

2) Analysis of the data (using all the tools remember Dupont financial ratios, "pest" and "swat" "four-factor", "five forces", industrial, product and here in IB nation "life cycles"?)

2.1 PEST Analysis

Political

* Wal-Mart not always correctly politically aligned creating difficulties in expanding into new territories

* Threats from political instability in regions creating losses

* Alignment of partnerships from non-present in-county organizations tends to create greater risk than those that have vested interest of success within the county where they have presence.

* Can be very adaptive and inventive to new ventures and entry to new markets

* Its people policies can leave much criticism as it prefers having savings in investing in a flexible temporary workforce as opposed to permanent workforce. This practice may not be well received in all political circles although can be argued to create more employment

Economic

* Certain territories pose greater risk in investment stability due to the nature of the economic climate and conditions

* Civil war and political turmoil affects operations and investments

* With growth Wal-Mart able to cross subsidize other ventures and assist ailing parts of the business

* Competitive pressures and attacks within territories tend to be squashed by ingenious means to place direct and indirect competition

Social

* Must customize processes to local customs and traditions -tends to be to forceful

* Clash of company culture with acquired or partner companies create initial