Wal-Mart: Global Paper

Wal-Mart: Global

MBA: International Business

Prepared by:

1. Provide a company overview, and identify the countries in which the corporation operates.

According to Global 500 Wal-Mart ranks number three on the list of the world's largest corporations, even though Wal-Mart ranks three it only comes behind two major oil companies (Royal Dutch Shell and Exxon Mobil). Wal-Mart is an all-inclusive company that offers its consumer products and services ranging from food to oil changes. The company was founded by Sam Walton and is currently headquartered in Bentonville, Arkansas. Walton started the business in 1962 and now has expanded over a 40 plus year period into a global empire with several different formats. "Every week, 176 million customers visit a ASDA, Mi. Bodega Aurrera, Changomas, Neighborhood Market, Sam's Club, Seiyu, Superama, Wal-Mart store, Supercenter or one of our many other formats around the globe" (Wal-Mart, 2012).

2. Identify the types of market systems and types of legal systems that exist in the countries where the corporation operates. What effect do these have on the company's operations?

Since Wal-Mart was established in the United States, the free market capitalistic infrastructure enables Wal-Mart to maximize its business endeavors. In retrospect, Wal-Mart has taken consideration of other global economic factors. Wal-Mart uses several types of marketing systems and other country's legal system(s) in a collaborative effort to maximize its products, services, presence, and profits. Wal-Mart employs strategic marketing methodologies to second and third world countries. By doing so, Wal-Mart offers growth potential to certain targeted regions of the world in the hope to stimulating jobs in that particular region. Wal-Mart corporate leaders have teams that visit local governments of perspective regions and negotiate on behalf of Wal-Mart to seek and meet the economic needs of that country's government. Understandably, throughout the years Wal-Mart had to find innovative ways to demonstrate its economic feasibility to reluctant governments. Wal-Mart's past legal dilemmas made public regarding labor disputes, underpaid wages, and questionable work practices in third world countries have left a bad impression on Wal-Mart in its entirety. In fact, a study was led in 2009, where several interviews were conducted documenting factory workers and producers for the retail giant. In, "India, Sri Lanka, Thailand and Bangladesh, found that Wal-Mart's purchasing practices subjected workers to excessive working hours for poverty wages, suppression of their right to demand improvements in their treatment at work, and a lack of job security" (Clean Clothes Campaign, 2009).

3. Discuss the possible sources of political risk for: (a) the countries in which the company has a presence and (b) the basic nature of their products and operations. If you were a political consultant for the company, how would you suggest the company approach its political risk given trends in international political systems?

Wal-Mart Latin America, also known as Walmex is the third-largest corporation in Mexico. Like Wal-Mart globally, Walmex Latin America boast "revenues by 31.4% to $27.2 billion" (Agren & Ogier, 2011). Besides Walmex providing basic products such as food and other goods and services, it had the privilege of establishing the world's first Wal-Mart bank. Like Wal-Mart America, Walmex has launched its "Everyday Low Prices" campaign enabling low prices for a majority of their products by supplying bulk in mass quantities. In turn, this regulates inflation, and reduces the risk of product shortages. Walmex considers its cost-cutting endeavors to an effective "management team with a large business to oversee and yet such a humble environment and minimum operating budget" (Agren & Ogier, 2011). In the recent years, Walmex has surpassed its revenue goals and objectives. This may pose a threat to the government of Latin America because Wal-Mart de Mexico's profits and project sales have even surpassed the government's revenues, making Wal-Mart an economic stronghold for any Latin American economy.

4. Identify the stakeholders the company must satisfy. Why is this process more difficult for companies operating internationally?

Wal-Mart essentially has stakeholders in the form of market and non-market.

These stakeholders view their interest in two forms: monetarily and community effectiveness. First, for Wal-Mart to meet and placate the interest monetarily, stakeholders require certain aspects of market growth to constantly be attained. Market stakeholders want to see substantial returns on their investments through Wal-Mart, so its top management teams assure that goals and directives reflect as such. Wal-Mart recognizes the communities it serves as its non-market stakeholders. This area of performance feeds off the other, for instance, the market cannot meet its objectives and performance goals without providing due diligence to the non-marker (community) stakeholders. Programs like employee healthcare, reasonable salaries, fringe benefits, as well as providing a multitude of quality goods and services while keeping prices down for the consumer are all measures that