Essay On Wal-mart
Wal-Mart is a multinational retailing store chain that is present in more than one country. Since 1999, ASDA’s is fully owned by the owners of Wal-Mart and is, therefore, a chain of Wal-Mart in the United Kingdom . By value, Wal-Mart is the biggest company by value and owns ASDA, which is the second biggest store in the whole of the United Kingdom after it took over Sainsbury’s in July 2003. ASDA is spread all over England and Scotland with more than 122,000 employees working for it.
ASDA states that “The story begins with the great entrepreneurial vision and drive of the founding fathers who pioneered the concept of one-stop shopping in the UK” . Wal-Mart has recently in July 2006, pulled itself out from Germany leaving ASDA to be its only European chain. Pulling itself out cost Wal-Mart a huge amount of money as “Wal-Mart said it would sell its 85 German stores to the rival supermarket chain Metro and would book a pre-tax loss of about $1 billion (£536 million) on the failed venture” . Wal-Mart has done a lot to help the environment as well as “Through Wal-Mart Argentina’s “Eco Action”, children are learning about problems facing their environment and what they can do to help” . Spreading business to more than one country is a very profitable business but requires high expertise and strong financial backing. The United Kingdom and Germany are the two most established markets, which Wal-Mart decided to enter.
Due to the financial backing and stability of the retail store in America and its developed goodwill over the years made the governments of the two countries allow the chain to enter and issued a permission notice or license to it. Along with that, the flow of Foreign Direct Investment is always good for another country. There are some advantages as well as disadvantages of buying an already established business in a foreign land as well as domestically.
The advantages are that the goodwill of the business comes with it along with the lessening of establishing cost. While the disadvantages are that it is hard for the new company to develop its separate identity and any bad publicity in the past has to be faced by the newly taken over organization.
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- Hall, A., Bawden, T.; Butler, S. (2006).Wal-Mart pulls out of Germany at the cost of $1bn. Retrieved on 31st January 2007 from http://business. timesonline. co. uk/article/0,,13129-2290398,00.html
- The ASDA Story – Introduction. (n. d. ). Welcome to our All About ASDA Site. Retrieved on 31st January 2007 from http://asdacares. gpalm. co. uk/the_asda_story/the_asda_story_load.html
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