Essay on "Business Expansion Report on Proposal for Wal-Mart"

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[EXCERPT] . . . .

Business Expansion

Report on Proposal for Wal-Mart engagement in China.

The Wal-Mart store is one of the leading American subsidized markets for domestic goods that have been subsidized. In the recent past, it has been considering expansion of their stores to other countries and one of them would be in China. The report is solely aimed at looking into the possibility of expanding the stores to China, the challenges, the cultural differences, the market trend, the political atmosphere as well as the legal situation that should be expected by the Wal-Mart management and how to overcome them all.

The sole reason for the research was to look at the viability of the Chinese market for the expansion of the Wal-Mart stores and to provide adequate data and information to the Wal-Mart management about the China market before they venture into the expansion bid into China.

Through the observation of the legal system, the business opportunities, the threats to the kind of business Wal-Mart engages in, the market needs and demand and the cultural differences that exist therein, it was concluded that China is a country worth trying out the expansion process of Wal-Mart since the possibilities of thriving and the strengths of Wal-Mart outweigh the threats.

1.1. Introduction

The Wal-Mart was founded by Sam Walton in 1962 in 719 Walnut Avenue in Rogers, Arkansas. Today there are 706 stores in the U.S.A. offering competitive prices and good shopping experience to millions of Americans across the U.S.A. The size of and average store, according to Walmart Corporate (2011) is 10,800 square feet and has an

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employee base of about 225 people.

In the Wal-Mart stores, there are a wide variety of items offered for clients. These include family apparel, Healthy and beauty aids, Electronics, Toys, Lawn and garden items, Jewelry, Automotive products, Home furnishings, Hardware, Sporting goods, Pet supplies, House wares among many other supplies that clients can walk in and shop for.

With such a wide variety that the store deals in, it seeks to have further expansions to business viable countries in the developing world. Hence this research and report that detailed the market situation of China through data that was obtained from observation of the business trends, business documents, legal documents and business data on the internet and information on reliable websites.

1.2. Wal-Mart Operations

Wall-Mart has several stores throughout the U.S.A. with each store offering a wide variety of goods. Lately, there have been other subsidiary centers that have been opened to bridge the gap that existed between Wal-Mart and the other chain stores. Some of these stores are like the Wal-Mart Supercenter, Neighborhood market by Wal-Mart, Supermercado de walmart, market side, Sam's club and Walmart International.

Wal-Mart is in the process of reorganizing its operations within three geographical locations with units that are headed by regional presidents; these regions are the South, North and West. This is aimed at facilitating the growth as the chain store seeks to enter new markets and develop new regions across the U.S.A. And better leverage their resources.

Wal-Mart is said to have one of the most efficient merchandise replenishment mechanism that take no more than 48 hours to replenish hence offering the customers and all round supply and availability of stock, or delivery period that is less than 48 hours.

Wal-Mart engages in selling sustainable merchandise that is strict on the lifespan observation. There is a strict observation of the quality from the manufacture materials and standards to the storage and the ultimate consumption ad use by the consumer.

According to Walmart Corporate (2011), Wal-Mart believes in and observes the environmental conservation and provide the consumer with environmental friendly products like the compact florescent light bulbs, fair trade coffee, organic produce and so on that helps in energy saving and environmental conservation.

1.3 Why China

There is a growing business potential in China with each year seeing a growing trade base and an increasing number of trade partners. China is open to the whole world for trade hence giving all the willing traders a ready chance to invest in China.

One reason why the Wal-Mart should invest in China is the promising economic trends that are there. The total world trade that was experienced in January to July 2007 was a staggering $391.9 billions, which was a 12.4% increment as compared to the same period of the previous year as shown in Consulate General of India, (2007).

The other reason why China is suitable for Wal-Mart business is that there is a British legal system that has been adopted in China hence there is an atmosphere that is conducive and the American-based business will not have a hard time in terms of acquainting itself with the business environment. Further communication and interaction will is relatively easier and advantageous for the staff that will relocate from USA to China since English and Chinese are the bilingual legal languages used in China (Abacus CPA, 2007).

There is a conducive political environment and a stable social environment; two prerequisites to the success of a business in any country. The Wal-Mart will take advantage of the peace and welcoming consumer base to attract the customers to the new stores that will be opened in China.

The other factors that would put China at a more strategic position for trade and setting up of a Wal-Mart would be appropriate are the availability of the man power, availability of international banking system and there is no restrictions in the funds transfer system and amounts.

2.0 National business system and cultural conditions.

There are various differences in the business system as well as culture that exist between the American culture and the Chinese that the Wal-Mart management will have to put into consideration before they set sail to China. One fact about the business system in China is that it is highly inclined towards the socialism system with a belief in common ownership of the means of production and the resources. This is in stark contrast to the American business system that is entirely capitalistic in nature. This difference in the business system will mean that the Wal-Mart management will have to adjust their business culture so as to make the people of China feel like they are part and parcel of the business and that it belongs to the society. Some of the ways of achieving this is the high involvement of the locals at all levels in the organization and developing a strong CSR program that will make the society around feel the presence of the Wal-Mart as an organization.

The fundamental cultural differences that may negatively affect the operations of Wal-Mart in China if not well taken care of are outlined below as shown by Pre-Departure Orientation for Chinese Students, (2011).

The Americans treat conception of self on self-reliance and self-promotion is more accepted as they value freedom from external interference, while the Chinese the conception of self is viewed from a group perspective and they value self modesty as well. In social relationships, the Americans are more comfortable with peers and there is minimizing the importance of social ranking. This is the opposite of the Chinese culture who would like to know who is in charge and they are highly formal hence this business atmosphere must be created and the clients be made to feel there is a figure of authority to whom they can report or approach on burning issues.

The Chinese are also known to value reciprocation of obligations as one should be responsible for each other, yet among the Americans, there is an evident avoidance of interdependent relationships and situations that will bring up long-term obligations and responsibility for the other. At the work level, the Americans value completion of the assigned tasks than the relationships and friendships. In Chinese culture, they are relationships oriented where the maintenance and sustenance of relationships is more important than accomplishing a task.

The other significant difference is that Americans do have the zeal to directly confront, criticize, handle controversial topics and press to the logical end their opinions while the Chinese are the opposite. They avoid as much as possible direct confrontation and heated discourse, avoid open criticisms and controversial topics and concern themselves more with maintaining peace and harmony among themselves.

Their sense of time is such that they have interest in the past as much as they are interested in the long-term future, yet on the other hand Americans are less interested in the past and pay much focus on the near future.

There is more respect to personal relationships than the written laws and procedures for engagement, Americans on the other hand will give preference to the law and the written rules. They assume that it is the rules that produce fair and good results and fair results for everyone; it as well leads to reasonable procedures and decisions.

There are a number of difficulties that the Wal-Mart is bound to face once the stores open doors in… READ MORE

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Quoted Instructions for "Business Expansion Report on Proposal for Wal-Mart" Assignment:

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ASSIGNMENT BRIEF

Assume that you are a researcher working in a multinational company (it is easier if the company is fictional) based in Country A (a developed country), and that you are asked by your chief executive officer (CEO) to write a report on doing international business in Country B (a developing country).

In the report, you must an***** various aspects of the international business environment (see below) and provide a recommendation on whether your company should engage in trade and/or investment in Country B and how. You may if you wish make Country A a developing country and Country B a developed country.

It is sensible to decide on real countries for Country A and B and a real industry for the firm (e.g. textile manufacturing). Note: these are only examples.

You can select any countries and any industry that you wish. It is sensible to select countries and industries for which it is easy to obtain the data that you will need. For your own benefit, you should define what your firm does narrowly and clearly (e.g. a *****˜laptop manufacturer***** is much better than a *****˜computer firm*****).

Issues to be considered in the report:

a) An analysis of the national business system and cultural conditions in Country B with an assessment of how this will affect your firm within its industry.

You should keep in mind the national business system and cultural conditions in Country A so that you have accounted for the major differences between the systems that the firm operates in from the one it is considering operating in. When considering cultural conditions, you should avoid focusing exclusively on Hofstede*****s, Trompenaar*****s or Hall*****s frameworks and instead draw on a more diverse set of readings about national culture. Also avoid general an*****s of national business systems and cultural conditions and instead provide an analysis that is relevant for your chosen industry and firm.

b) An assessment of the pattern and trends of trade between the two countries, especially in your selected industry, and also consideration of the type and level of protection measures against imports and foreign investment in Country B within your industry.

In this section you should indicate, in the light of the trade patterns and the level of protection, what type of competitive advantages your firm would need to be successful in Country B. Note: you need to keep in mind the industry that you have selected for your company.

EITHER

c1) An outline of the exchange regimes that govern Countries A and B with an assessment of the risks this poses for your firm.

You should highlight measures that may be used to reduce these exchange rate risks.

OR

c2) An assessment of the implications of international institutions such as the WTO, EU, NAFTA for the firm*****s proposed business links with Country B.

In this section you should apply the implications of the work of the international institutions for a firm in Country A doing business in Country B.

d) Advise on whether the firm should export or use foreign direct investment, or a combination of these means, to do effective business in Country B.

In this section you should discuss what type of exporting and/or foreign direct investment should be used.

EITHER

e1) Advise on the type of political risks that the firm may encounter in Country B and on ways to reduce these risks.

OR

e2) Advise on the problems of establishing and operating a corporate social responsibility policy covering business with Country B.

Please note that any discussion of the points above has to be relevant to your chosen firm and industry. At the end of the report you should come up with clear and well-grounded recommendations for your chosen company on whether it should engage in trade and/or investment in country B.

The report should contain a clear introduction and a conclusion, summarising your recommended trade/investment strategy for your company.

GUIDELINES

Your assignment ***** some help and pointers for you.

I thought that it would be helpful if you could all bear in mind the following points when preparing your projects.

1) Avoid using lazy English or imprecise expression. For example, please avoid ending sentences with the word *****˜etc*****.

2) When quoting an authority, the reference, for example (Hill, 2010), should be immediately after the end of the quotation. For further information on referencing please see the Effective Learning Services booklet entitled *****˜References and Bibliographies*****. This is available in hard copy or via this link: http://www.brad.ac.uk/acad/management/external/els/pdf/refandbib.pdf from the School of Management website.

3) Diagrams and tables, including the title, should be on a single page.

4) You should briefly explain to your audience what the diagram is illustrating.

5) Avoid using diagrams, tables and theories where they are irrelevant or there is no connection to the rest of your project.

6) The *****˜Executive Summary***** should come before Introduction.

7) The *****˜Executive Summary***** enables the top management (CEO) to have an idea of what you did, why and how you did it, the outcome and your recommendations. This is a summary of the whole project and one to two paragraphs are enough.

8) The *****˜Introduction***** helps the reader to understand why you are doing the research and how carried it out. One paragraph of up to ten lines or so is enough.

9) The *****˜Conclusion***** is a summary of what you did, the findings and the recommendations.

10) There is no need to highlight some points by putting them in bold type.

11) Please observe the word limit. The good news is no more than 3500 words required for this project and this excludes reference, diagrams, tables and appendices (See the ELS booklet entitled *****˜Report Writing*****. This is available in hard copy or via this link: http://www.brad.ac.uk/acad/management/external/els/pdf/reportwriting.pdf).

12) Remember to include a list of your references at the end of the report (See the ELS booklet entitled *****˜Report Writing*****. This is available in hard copy or via this link: http://www.brad.ac.uk/acad/management/external/els/pdf/reportwriting.pdf).

13) Paragraphs should be more than five lines and not more than twenty lines. In short they should be reasonable.

14) The assessors are interested in how you an***** the national business system and culture conditions in Country B with an assessment of how this will affect your firm within its industry, please note in the Country B (See the ELS booklet entitled *****˜Report Writing*****. This is available in hard copy or via this link: http://www.brad.ac.uk/acad/management/external/els/pdf/reportwriting.pdf).

15) An assessment of the pattern and trends of trade between the two countries, especially in your selected industry, is important, as is a consideration of the type and level of protection measures against imports and foreign investment in Country B within your industry. You should also state the type of competitive advantages your firm would need to be successful in Country B (See the ELS booklet entitled *****˜Report Writing*****. This is available in hard copy or via this link: http://www.brad.ac.uk/acad/management/external/els/pdf/reportwriting.pdf).

16) Your project should be clear (readable English with correct spellings), numbered and have headings.

Hope this is going to help you to prepare a well researched and written project.

*****

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