Free Globalization Essay Sample
Abstract
The main purpose of the research is to draw out clearly the connection between Wal-Mart global operation and its political involvement as the main agenda. This evaluation of Wal-Mart stores as the transactional corporation chosen for the research, this shall emphasize further on the strategic formulation that Wal-Mart encompasses in it operations and other factors like outsourcing, supplier’s network, and vertical integration and globalization expansion roles by this corporation.
Introduction
Wal-Mart stores were founded by in the year 1962 by Sam Walton. These multimillion chain stores have accrued from the national to the international market level. It is one of the most common name in the American households having stores across every neighborhood in every state and nearly every continent it has mergers or acquisitioned other stores to from ties with the locals of those regions (Pallavi, 234). The year 1972 saw the store been listed on New York Stock Exchange. It is considered to be the largest private employer in very many regions. It is also considered the most politically involved organization in the United States, critics articulates that this eminent organization has been using this influence to dictate pricing and putting smaller retailers out of business. However, this has been the biggest discount stores in the whole world celebrated for providing its customers with affordable utilities in nearly all nations (Liedtka and Rosenblum, 147).
Wal-Mart Global Operations
Wal-Mart store is currently considered the largest public chain department discount store in the world, comprising of over thousands of stores and employs roughly about three million employees globally. This organization is operational in nearly all major megacities in the world, its operational in UK and is formerly known as Asda, Mexico which falls under the name Walmex, North America operating a variety of clubs (Sam club) and variety of warehouses in the same region, in Japan under the name Seiyu, also in India as best price, other countries that have this stores includes Brazil, Argentina, Puerto Rico and Canada (Pallavi, 265).
All over the world Walt-Mart is considered to be the most powerful retail brand, this is because this organization operates different format of retail stores across the globe. According to Jana (2006) notes that in the United States alone these entity operates hundreds of other discount stores and is considered the greatest employer world wide. With a whooping increment of stores sales of 5.4% every year and records of increment of 27% over the year 2008, in 2009 revenues of $ 405,607 million, this was due to in the average transaction size per customer and customer footfall. The growth in operating income and net income have generally been complimented by the growth in net revenue has partially. Increase of 3.6% from 2008 of$ 22,798 million, was the revenue record that tallied in operating profit of Wal-Mart during FY2009. This constituted the 82% of the company’s total from the strong financial performance in Wal-Mart’s US operations.
Globally this organization has made major acquisition to facilitate competition from foreign stores, which are house hold names in the region that Wal-Mart intend to venture. In Canada Wal-Mart is operation after acquisition of Woolco which was formerly a subsidiary of Woolworth Canada; this led to accumulation of 122 stores owned by this organization in 1994 as echoed by Chen and Paulraj, 130).
Wal-Mart has other joint ventures in China and also enjoys subsidiaries in this region that generate a lot of revenue. In Central America Wal-Mart owns about 51% of the shares in Central American Retailing Holding Co (CARHCO) and other stores in States like Honduras, Costa Rica, El Salvador and Guatemala. In Norway although the government excluded Wal-Mart from the Government Pension Fund of Norway portfolio of investment, this organization enjoyed the stock value of over US$ 500 million. This came in the wake of Wal-Mart withdrawal from German market citing sustained loss from the volatile competition from this region and sold off to Metro stores (Quinn, 87). Later the same year Wal-mart ventured in to a merger in India with Bharti Enterprise, this was because International Corporation in retailing are prohibited from directly involvement into commerce in this region. Wal-Mart franchised and operates through wholesaling end to this enterprise, and the Bharti Enterprise operates from the front side and associates themselves with retailing outlet while Wal-Mart deals with logistics and cold chains.
Political Involvement
This organization is rated 177 as the most politically involved corporation in the world. This has brought about critics about how it uses the political influence to mitigate competition unfairly through scrupulous means. In California Wal-Mart has used political influence and financial power to execute and override democracy enacted zoning policy about grocery stocking that prohibit combination of groceries and department stores good in a store of one thousand plus square foot. Recently election of the year 2004 in America it was the biggest contributor and has been very keenly involved in the federal politics it has progressed and formed Political Action Committee (PAC) and has provided federal candidates with accumulative of over 2 million dollars recently (Alden and Neil, 24).
Apart from the acclaimed “the other Washington” by Bill Gates in the mid 1999 as US hinterland another upstart by Microsoft, Wal-Mart also has also tried to beef up their presence politically in Washington. This disdain was first projected by the Wal-Mart founder Sam Walton during the 2000 presidential campaigns.
This organization has been facing many lawsuits from employees to local government that have been trying to mitigate Wal-Mart expansion in the view of protecting smaller retailers. Trade unions also have lodged series of litigation because as the biggest private employer Wal-Mart discourages union among their workers. Restriction placed would see Wal-Mart losing big in countries like China and in the U.S making them to be politically involved to mitigate these factors as voiced by Alden and Neil (23). The mega stores have projected into great clout in Washington and have put more emphasis on political involvement by legislative issues engagement. This progression have been estimated that in congress more than 300 have been receiving donation ranging from $1,000 and $17,000 accumulating that 85% of the donation have been to Republican candidate.
Outsourcing
Wal-Mart is usually forced to outsource in nation where they see potential market and there are restrictions on the laws of the land. However, due to the large scale of operation this organization has devised system of outsourcing in major department to mitigate the cost of employing personnel that are only needed seasonal. Most of the jobs that are given to consultancy agency include marketing research, new invention in branding of the services and goods and retailing research in foreign regions (Chen and Paulraj, 121).
Vertical Integration
Wal-Mart internal culture, leadership, and human resource structures and practices relationships environment is mostly composed of the elements which are within this organization, these includes corporate cultures, management and current employees and their behaviors. Some of these elements like the era when this organization was hit with diversification issues usually affect the organization as a whole; however other aspect like reforms and strategic reengineering only affects the managers. Employees are usually directly impacted by the managers philosophical or leadership ideologies. These has been considered to be the fueling factors which underlies in the success of Wal-Mart, this has been analyzed from the fact that they have injected the progressive kind of managerial structures (Gereffi and Christian, 177).
Wal-Mart Global Expansion
Over the last 40 years Walt-Mart have grown to a very strong and lucrative position in the global market this is accordance to commerce in the international market. As a template for twenty-first century capitalism Wal-Mart has been both praised and pilloried. Mainly when trying to examine the global expansion impact of Wal-Mart we have to have the consideration in terms of four themes which includes: its organization structure and business model, emergence of buyer-driven commodity chains in the global economy influence to the Wal-Mart’s growth, in terms of its own stores the Wal-Mart’s labor relations dual impact and global supply chain working conditions and Wal-Mart community outcry effectiveness and the genesis as voiced by Gereffi and Christian (127). By embracing three research criteria Wal-Mart has underscored the value of a expansion globally agenda in that; there is need for taking the research globally, the ability of working change from within and new media and audience incorporation.
About 20% of the International segment is yielded from the organization overall expansion commerce income, this is inclusive of other several various stores and restaurants which includes Wal-Mart and Sam’s Club located in 13 different regions and Puerto Rico. This divisional structures works for Wal-Mart because of the effort they have placed on precise objectives such as service, customers and product. Wal-Mart narrowing down these focuses have helped to perform effectively for this allow them to pinpoint areas that need strengthening and remedies applied appropriately (Quinn, 102).
The end of 2008 saw another development in renaming a German retailer Stephan Fanderl as emerging market president to preside over market in the Russia and other neighboring market in this region. Later the start of the year 2009, Wal-Mart procured a Chile retailing grocer from the controlling interest procured in Chile from the merger withDistribucion Servicio D&S SA. Other development includes procurement of Vudu which deals with online sale of movies and production of blue rays players others include selling of second hand cars in one of the stores in Buffalo (Liedtka and Rosenblum, 149)
Strategies pursued by Wal-Mart
Wal-Mart deploys strategic strategies; leadership and knowledge management relationship are basically formulated on the basis which purposely distinguishes it from their competitors by means that are in the future sustainable. Business decision are held strategic if the variation that consequences in sustainable advantage and involve some innovation in the knowledge management. Wal-Mart adopted strategic planning and leadership etiquettes and authenticated them after Second World War in the style of discounting on its merchandise and upgrading from the economic recess (Jana, 2006).
These attributes has been the success story that rallies behind the achievement of this great superstores world wide, this is viewed that discount retailing was not the strategy, and was not implemented when Kmart, Target and Wal-Mart first became operational. The management that acknowledged this attributes was actually actualizing on the fact that the main vision would have to be based on the best practice relationship of the organization, equipped with this recipe Wal-Mart would be later become one of the leading chain of retail stores globally (Liedtka and Rosenblum, 151).
According to Gereffi and Christian (198) articulates that from this aspect this organization has been able to dominate the American retailing industry. However many consider the strategy which is implemented in this organization a great mystery of how the survive on low pricing and discounting all their merchandise, the weaknesses of this organization are well guarded and every timer a loophole shows up it is cleared with effect thanks to their very solid managerial structure which receives appraisal every year.
Growth in terms of expansion in the US and International markets, has seen these giant discount store make strategic attempts in the its formulation to govern the retail market where it presence is felt, this has helped in widespread name recognition and customer satisfaction in the discipline of the brand name championing Wal-Mart, this has resulted to branching of new market segments in the discipline that concerns retailing (Pallavi, 299)
Conclusion
Wal-Mart have progressed in globalizing the level of corporate in many region in the world, this progression has created employment opportunity for the locals. However, critics have also clogged the progression benefit that is associated with Wal-Mart over years since it has been in operation. The political sphere which Wal-Mart has ambushed to protect their advancement has also been target for critics as lobbyist are formulating campaigns against letting this organization acquire immune from the congress as it is the biggest donor in political activities in this region. However, this fact neglect to oversee the benefit that this organization has brought to the American and globally homes by proving discounts on their products making the living condition of the general population comfortable.