Question 1) How could Wal-Mart continue its extraordinary growth?
Answer 1) In 2005 Wal-Mart became the largest company in the world .The sales were around $260 billion and it had over 5000 stores in the 10 countries it had its services in. It employed over 1.5 million workers and it continues to attract price conscious and vulnerable customers for all over the globe .In a study conducted it has been shown that one out of every product that is sold in the US is sold through Wal-Mart .That's a very large achievement by every amount considering the fact that US is the largest consumer in the world .Competition is as vigorous as ever as the Home Depot and Best buy are giving Wal-Mart a run for their money but Wal-Mart is as strong as ever and is continuing to do unmatched innovations in the field of retail .Under the new strategy it is trying to enter newer and bigger markets like India china Russia where it has a limited presence by tying up with local companies which have a very strong foothold in the domestic markets like Bharti in India .It gives the company a strong head start in the domestic markets of the new company as the domestic company already has a huge brand image and distribution networks in the home country which makes it easy to establish the Wal-Mart brand .Wal-Mart can continue its extraordinary growth by addressing key issues the format of the stores ,deployment of the technology ,the use of human capital and the most important part of taking the executive decisions of managing a company as big as Wal-Mart with sales of around $300 bn.Another way of continuing the extraordinary growth is by acquiring smaller competitors and small mom and pop stores which have a strategic location advantage and have been there for a very long time .It gives Wal-Mart a foothold right next in the neighbourhoods which are otherwise difficult to penetrate and take a very long time .
Question 2) What would be the limits to that growth?
Answer 2) It is true that Wal-Mart is the largest company in the world and has revenues exceeding $300bn .But all good things come to an end and so will the growth of Wal-Mart .If it continues in the fashion it is doing right now it will reach such huge unimaginable levels if the same growth trend continues .There are various factors which will lead to limit of the Wal-Mart growth factor .These are:
The Americans have never had a problem with big companies yet they have always set limits on the scale and size any company can reach .Up to a certain limit its fine but when it starts reaching greater levels the public consensus is that it has to stop .The result id the so called antitrust action which is initiated by the federal bureau. Despite the huge campaigns that Wal-Mart is working for everyone it still sells to only about 10% Americans and has a huge way to go .The Workers Unions are gearing up for a battle and the Congress may enact any protective law anytime to protect the small businesses and with the expansion of Wal-Mart consumers won't be willing to hand over their hard earned cash to just one company.
According to the general view Wal-Mart stream rolls everyone and everything in its path and it can kill even the most cutthroat competition ever .The business all over the world are creative people when they are the most desperate and the other retailers have often shocked the might of the Wal-Mart and given it a run for their money .As time passes more and more companies will find innovative ways to take Wal-Mart head on which will lead to reduction in the share of Wal-Mart.
The greatest force of all is that all mammoths finally slow down after reaching a certain stage .It has been seen with the companies like GM, A T &T, Sears.The driving spirit fades after a certain stage and becomes a killer >There are no signs of slowing down as of now but to prevent it in future will be a near miracle .The company officials insist that it can grow but now at the pace it is used to for the last 15 years .
Question 3) Did Asia and Europe offer Wal-Mart real opportunities for international market dominance?
Answer 3) Wal-Mart started in US when the country was at its peak and all u bulls raging and all guns were firing. The company grew to tremendous proportions and it has reached to unimaginable heights in the US. Its said that out of every 3 products sold in the US 1 is sold through Wal-Mart .That's an achievement by any means .When Wal-Mart entered Europe it was already saturated by the local retailers like Tesco and Carrefour and the protectionist nature of the EU also made life difficult for it .Also to understand the mindset of the European customers who take pride in their own brands and heritage was also a very major issue for Wal-Mart .Also the tougher stance against the goods not produces in the EU and the import norms also made it difficult for it to make the inroads like it did in US. Asia was all together a different market with the companies growing and democracies developing .The protectionism coming to an end and the start of the liberalization .It entered Japan with the ailing Seiku and forged a strong bond with it .It has had a very strong relationship right from the start .It sources nearly 95 % of its products from China. It entered China, Thailand and other countries in the following year's .It faced problems when entering India as government policies weren't favourable. Yet it started a joint venture with the leading telecommunication company in the region Bharti and started the retail chain in a very limited way .If Wal-Mart can grab the market shares of companies like China and India which have the largest populations in the world it can maintain its leadership in the coming decades and maintain a strong relationship with the nest gen consumers.
Question 4) How could the company take advantage of its global reach or propel itself through the years to come?
Answer 4) The Wal-Mart has the best global supply chain in the world as compared to any other retailer in the world .Its global presence makes it a very strong contender for the next gen leader in innovation in retailing .Other companies will have to work very hard to match up to the standards it has created .With its presence throughout the world it can reach developing countries like India, China and Brazil because the next big wave of growth can come only from these economies.