Walmart

Wal-Mart Takes on the World Minicase:

A Case Study Analysis

Subject, Section

Name of Teacher

April 16, 2006

I. Introduction

Wal-Mart Corporation, a private company based in the United States, has been famous all over the world due to its low price retailing business despite numerous competitors such as Kmart, Sears and Target among others. In the United States alone, it has an employment of almost one million workers, aside from the over 300,000 employees worldwide. With this, it can be concluded that Wal-Mart has created more jobs than any other companies globally.

Having the largest population in the world, IndiaÐŽ¦s total labor force, comprised of self-employed, wage and salary earning, casual and unemployed, was estimated at around 407 million in 1999 to 2000. The organized labor force of hired, regular and contractual employment is comprised only of 14% the total labor force in which: 60.4% comes from agriculture; 22.3% provide services in trade, hotels, business services and social and personal services; while the remaining 17.3% goes to the industry consisting of manufacturing, mining and quarrying, construction, electricity gas and water (National Sample Survey Organization, 2001). Unlike China who also relies on its labor force, IndiaÐŽ¦s labor market and competitive-edge is underrated and yet to be fully-tapped as most of manufacturing industries and services are being done in the former.

With this, the paper aims to analyze the potential of IndiaÐŽ¦s market sector and provide necessary recommendations for the Wal-Mart prospective expansion operations.

II. Analysis of IndiaÐŽ¦s Market Status ÐŽV Using the SWOT Analysis (Strength, Weaknesses, Opportunities and Threats)

Factors Strengths Weaknesses

Economic „X Large human capital, as the services sector rapidly increases.

„X From a state-run economy, it has now ventured into free-market.

„X Rapid increase in the services sector.

„X Vast agricultural resources, especially the agro-processing industry.

„X As compared to Latin America, India does not have considerable economic crisis.

„X Highest personal income tax rate was brought down from 56% to 30% while corporate tax rates for public companies were lowered from 51.75% to a fixed 46% or less. „X Lower rate of labor absorption.

„X Earnings are shifted from labor to capital income.

„X Compared to developed countries, people have lower buying power.

Political „X More liberal policy reforms. „X Clear-cut policy framework to protect the resource-poor from economic development is yet to be developed.

Socio-cultural „X Greater labor force, particularly for men. „X Gender-bias, especially for married women who have less chance of being hired. Marriage increases a womanÐŽ¦s responsibility for care-giving and domestic work.

„X Less education provided for most of Indian women.

Opportunities and Threats

Human capital. Despite its growing population, IndiaÐŽ¦s human capital can be favorable for Wal-Mart due to its cheaper labor cost. With more labor, production in goods and services specifically being packaged and distributed by the company will be increased exponentially as the company progresses. As Wal-Mart creates more jobs, its ÐŽ§domino-effectЎЁ also includes: increasing the countryÐŽ¦s total organized labor force, tax collection for goods and services despite cheaper rates and the overall welfare of the nearby communities, and ultimately at the household level. In the long run, more jobs will lead to population reduction.

Agricultural Resources. IndiaÐŽ¦s vast agricultural resources can be enriched as Wal-Mart can open new doors for marketing locally produced and manufactured goods and products, not only in India but also to other Wal-Mart branches throughout the world.

Entry of cheaper, imported goods. The introduction of cheaper, imported goods could downplay IndiaÐŽ¦s local production, distribution and marketing. IndiaÐŽ¦s cheaper buying power, as compared to developed