Ch 13 Organization of International Business Essay

Words: 868
Pages: 4

1. Intro & Background

Wal-Mart Stores, Inc. was incorporated in 1969 and now is the world’s largest and most successful grocery retailer which was selected as world’s largest company in 2007, by Fortune 500. It has 8,970 stores in 15 countries and total revenue of $421,849 billion (2010).

Wal-Mart’s main business strategy is ‘EDLP-Every Day Low Price’ which is the key-point of their success. To accomplish this strategy, they mainly focused on efficiency of distribution structure.
They used ‘Cross-docking system’, ‘POS’ system, ‘QR-Quick Response’ System. All those strategies core values are ‘Time’ and ‘Response’. Shorten the time for everything includes distribution, storing, etc directly affected lower the price of goods which
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However, I think there could be problems arise with that way. There could be damage to headquarter’s reputation they’ve made in domestic market if international division makes mistake or distortion of core value while they try to adjust to local market. It will seriously harm whole Wal-Mart’s name and will affect their sales. For example, while they try to get into Korea, they didn’t know about Korea’s atmosphere and condition. They struggled in Korea for years and finally got out of Korea without getting anything. This mistake damaged Wal-Mart’s name maybe not only in Korea division but also in headquarter.

In this case for Wal-Mart, Worldwide Area Structure could worked, too. If they use this structure, the great system they proved in domestic market can be used in all the areas but all the other things can be adjusted to each area’s property. In that way, they can reduce possibility of failure in certain country like Korea or German.

4. Conclusion

Wal-Mart is one of biggest company in the world and they’re making huge amount of money all over the world. There is no doubt that they are successful. But it doesn’t mean that they have nothing to fix or improve. If they want to expand their business, they should make their international division more efficient and effective. That means, sure they should use their great system they have used in domestic market to international division but those strategies are needed to be reformed in