Posted: June 22nd, 2022

Issues In International Business

Question:

Discuss International Business Issues.

Answer:

Introduction

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The Company’s history

Walmart was established in 1962 by Sam Walton (Walmart.com 2016,).

It is a popular multi-national retail chain store headquartered in the United States of America.

It has built a chain that includes discount department stores, hypermarkets and grocery stores.

There were 11 545 Walmart stores in 28 countries as of June 30, 2016 (Walmart.com 2016, 2016).

In different countries, the company is known by different names.

It’s known as “Asda”, “Walmart” and “Best Price” respectively in India, USA, Mexico, and Mexico (Walmart.com 2016,).

Background

This company is very popular as it is the largest by revenue worldwide, according to Fortune Global 500, which was published in 2016 (Fortune 2016).

It is also considered the most valuable company in terms market value.

According to Walmart.com (2016), the company’s net income was US$ 14.694 million in 2015.

The company is regarded by many as the largest employer (in private sector) in the world (Walmart.com 2016).

It employs around 2.2 million people worldwide (Walmart.com 2016).

It is a prominent name in the retail industry.

Walmart USA has three retail formats: Supercenters, Neighborhood markets, and Discount stores.

The U.S.A’s largest retail division is called Supercenters.

It contributes about 62.4% to the company’s total sales (Walmart.com 2016, 2016).

Products of The Company

The company also offers generic brand products, which are store brands.

These store brands are lower-cost alternatives to branded products.

King & Chicken (2015).

The company’s main products include electronics, clothing and footwear, as well as movies, apparel, footwear, toys, jewelry and craft supplies. They also sell grocery items, groceries, and other items.

Entry to Country

Singapore was selected as the city-state for opening Walmart stores.

It is a Sovereign Republic of State, which is a based in English Common Law (Gill 2013).

It is home to the most efficient water, air, road and rail transportation on the global market.

Foreign firms find Singapore a desirable spot because of its cultural diversity.

Singapore is a country that is attractive to foreign investors. It is also a good place for business opportunities.

Walmart’s primary objective is to help customers save their hard-earned money by offering the best price in the market (Niu & Yu 2016).

Target market for the company is the middle class and households of lower and lower income.

The company is attracted to those with modest incomes in general.

Singapore is a market economy that allows for free trade and has a high per-capita GDP (Rodan 2016).

According to the 2012 World Bank survey, the country was ranked number one in ease-of-doing business.

It is also the best place to invest in foreign direct investment (Singstat.gov.sg, 2016).

Potential market for the Product

The city is home to 5.68million people, and it’s considered the second most populous sovereign state (Singstat.gov.sg 2016.

Walmart could profit from the diverse culture of the city’s residents.

Singapore has people from all income brackets, which makes it the best place to launch Walmart stores (Singstat.gov.sg 2016,).

There are many obstacles to overcome when launching products from Walmart in Singapore.

It is possible to face many barriers in a new country.

High start-up costs, stringent government regulations and technology protected by patent may all be obstacles to entry into a new market (Creusen & Lejour 2013).

There are three main barriers that prevent entry to the Singapore market: Government regulations and economies of scale.

Singaporean Government might impose restrictions on entry through licensing requirements.

It might also hinder the access to raw materials or delay granting necessary government approvals.

The existence and benefits of economies of size can be a hindrance.

The economies of scale allow for efficiency improvements and low production costs.

Companies in Singapore already produce better products and are well-positioned in target markets.

The new company might not have the ability to offer products that are attractive to target markets.

This could cause resistance to new products and services.

The market already has many competitors offering similar products and service to its customers.

They have successfully captured the market by catering to their needs.

Walmart will need to personalize its products, and establish a price that is affordable.

This is done in order to be competitive in new markets.

Recommendations

Walmart needs to overcome the issues discussed in the previous section in order to quickly capture the new market.

The company should identify the strongest areas of the market where the Singaporean government is most interested.

The company must be aware of Singapore’s legal requirements, including licenses, permits, and regulatory compliances.

The company should place more emphasis on economies of size by encouraging innovation and introducing low-cost production methods or changing the pattern of sourcing.

You should pay particular attention to the costs of raw materials and production, logistics, shipping, service, recruitment talented personnel, and other factors.

A thorough market analysis should be done to determine the strengths of your competitors and the offerings they offer.

According to the needs of customers, the products and services should be modified.

For better visibility on the market, the company should strive to gain a competitive advantage.

Before venturing into a new market, it is important to assess the capital requirements.

You should estimate the startup costs and keep track of them.

This could include costs for manufacturing, raw materials, acquiring locations, hiring talented staff, installing technology, and implementing telecommunications.

The company must know where the funds are coming from and how to find investors before it launches.

You must also determine fixed costs and variable costs.

Walmart should concentrate on product differentiation strategies.

These companies need to produce products that are unique and have special features that are not found in the products of their competitors.

Low pricing can be used by the company to gain greater market acceptance.

It must analyze the offerings of competitors in terms of cost and functionality, and then design its products accordingly.

The company must manage the infrastructure.

The company must ensure that the infrastructure is in good condition for it to function properly.

The company should plan well when acquiring land, setting up offices, and implementing digital connectivity.

Modalities for Entry

There are many options for entering new markets.

There are many ways to enter a new market. These include licensing, franchising and joint ventures.

Joint Ventures is the preferred method of entry into Singapore.

It is a method by which two or more investors are part of its ownership and control with respect to its operation and property rights (Chung & Beamish 2012).

This is a much more extensive way to enter the market than licensing or exporting.

Singapore has established market leaders that deal with similar products.

These companies are well-known by the local population.

This would allow the new company to be seen by many people.

This is why joint ventures have been chosen as a way to market enter new locations (Chung & Beamish (2012).

In order to penetrate new markets, time is key.

It takes a lot time, money, and effort to set up basic infrastructure. Promotion is a major part of creating a brand image (Chung & Beamish (2012)).

These are often difficult tasks for new firms in foreign locations.

Joint ventures should be chosen for the purpose to increase visibility and strengthen foothold in foreign markets (Killing (2012)).

There are many benefits to joint ventures, such as shared financial capability, source, supply, risk sharing, ability sharing, and other advantages.

Multiplier financial investments make it easy for new entrants.

Because they have already procured the best raw materials, there is an easy supply of raw material from the partner organization.

Walmart would be able to access new markets, distribution networks, and other opportunities.

Beamish, 2013, states that sharing potential risks with partners allows the company to manage adverse situations more efficiently.

The company will thrive without having to borrow funds from others.

The company’s existing database can be used to effectively promote the products of Walmart (Chung & Beamish (2012)).

This would enable the company establish their presence on the untapped markets in Singapore.

References

Multinational Joint Ventures in Developing Countries.

Multi-party joint ventures international: Multiple post-formation changes.

Journal of World Business, 47(4) 648-663.

Market entry and economic diplomacy.Applied Economics Letters 20(5): 504-507.

Open Access to Legal Materials In Singapore

Strategies for joint venture business success (RLE international) (Vol.

Marketing Plan.

A large E-Commerce website: Exploring customers’ search behavior

The political economy and industrialization of Singapore: the national state and international capital.

Joint Venture Strategies: Design Bargaining and the Law

Edward Elgar Publishing.

Welcome to Statistics Singapore.

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