walmart in pakistan

INTERNATIONAL BUSINESS PRESENTATION WALL MART

GROUP MEMBERS GROUP#D Raheel Raza Syed Danish Hamdani Raja Adil Saad Saeed Umair Rasheed Sumbal Akber Shabana Malik

HISTORY OF WAL-MART

Wal-Mart headquartered in USA. Sam Walton started his discount store in 1950 by the

name of Walton's Five and Dime. Sam franchised it from 1944 to 1950 and then relocated

in 1950 to Bentonville iSam Walton owned 11 stores by 1962.

Sam Walton incorporated the stores as Wal-Mart Stores Inc in 1967.

By the end of 2009, Wal-Mart globally owned 8400 stores, had more than 2.1 million employees and generated annual sales if nearly $540 billion.

THEORIES WITH RESPECT TOWAL-MART Mercantilism:

This theory will not apply on Wal-Mart. It is due to this reason that it is not being apply anywhere in the world.

Maximum exports of high value products.

Minimum imports of less value products.

Absolute Advantage:

Wal-Mart has absolute advantage in

1: Low prices

2: Variety of products3: Capital abundance4: Latest technology

FACTOR PROPORTIONATE THEORY

Wal-Mart has land, capital and technology in abundance in home country. As compared to the host country.

THEORY OF COUNTRY SIZE

Variety of resources: All the perishable goods

would be taken from host country due to the nature of product and in the host country its in abundance.

Transportation cost: It also depends on the nature of products as perishable goods would be taken from the host country the transportation cost would be less but other products has perishable goods the transportation cost will be high.

Economy size: The economy size of host country is large. Its population is over 18 million. As high population in major cities the demand for product would be higher.

PRODUCT LIFE CYCLE THEORY

In product life cycle theory Wal-Mart places itself at MATURITY stage. It is reflected as Wal-Mart is facing severe competition (like Sears. Kmart and Tesco) as they competing by highly standardized products. So that’s why it is expanding towards the developing world.

PORTER-DIAMOND THEORY

o Factors Endowment WAL-MART has basic factors land. WAL-MART has advance factors technology and

skilled labor.o Demand conditions

The demand of WAL-MART is high in home country.

o Supporting industries

The supporting industries of WAL-MART are the firms which are producing their products.

o Firms strategy and structure

High quality products at low prices under one roof.

NEW TRADE THEORY

This theory is not apply on WAL MART because

Wal-Mart attain economy of scale in home country.

First mover advantage.

SCANNING OF EXTERNAL ENVIRONMENT CULTURAL FACTOR Pakistani society is family oriented

society where any outdoor activity that supports family experience is preferred.

Franchising Wal-Mart provides a place where family enjoys a quality product.

Day by day people are being more brand conscious. 

SCANNING OF EXTERNAL ENVIRONMENT Legal Factors Legally acceptable to introducing a WAL-

MART franchise.

SCANNING OF EXTERNAL ENVIRONMENT POLITICAL FACTORS

The current political condition of Pakistan is favorable for Wal-Mart as there is democracy in Pakistan.

SCANNING OF EXTERNAL ENVIRONMENT Economic Factors The economic condition of individuals in

Pakistan is improving day by day. As now more members of the family are

earning hence the disposable income of people are increasing so they can spent more on personal needs.

COMPETITIVE FACTOR

Competition is medium, because the existing competitors have not captured enough of the market share.

The existing competitors are Metro, Cosmo and CSD.

MODES OF INTERNATIONAL BUSINESS Franchising

SELECTION OF LOCATIONS Geographically Islamabad, Lahore and

Karachi are good locations for Wal-Mart as they have good infrastructure and Potential demand.