walmart in pakistan
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INTERNATIONAL BUSINESS PRESENTATION WALL MART
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GROUP MEMBERS GROUP#D Raheel Raza Syed Danish Hamdani Raja Adil Saad Saeed Umair Rasheed Sumbal Akber Shabana Malik
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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.
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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.
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Absolute Advantage:
Wal-Mart has absolute advantage in
1: Low prices
2: Variety of products3: Capital abundance4: Latest technology
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FACTOR PROPORTIONATE THEORY
Wal-Mart has land, capital and technology in abundance in home country. As compared to the host country.
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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.
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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.
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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.
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NEW TRADE THEORY
This theory is not apply on WAL MART because
Wal-Mart attain economy of scale in home country.
First mover advantage.
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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.
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SCANNING OF EXTERNAL ENVIRONMENT Legal Factors Legally acceptable to introducing a WAL-
MART franchise.
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SCANNING OF EXTERNAL ENVIRONMENT POLITICAL FACTORS
The current political condition of Pakistan is favorable for Wal-Mart as there is democracy in Pakistan.
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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.
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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.
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MODES OF INTERNATIONAL BUSINESS Franchising
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SELECTION OF LOCATIONS Geographically Islamabad, Lahore and
Karachi are good locations for Wal-Mart as they have good infrastructure and Potential demand.