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îEach one of you is a country,

different from each other. You have
to provide information required in
the following ten questions by the
end of third class. Every answer
should also contain the resource
from where the information is
collected. Assignment exceeding
two pages will bring discredit.
à

R 
 

à. What is the name of the capital city?

2. What is the political system?
3. What is the per capita income?
4. What is the purchasing power parity?
5. What are the three major imports of the country?
6. What are the three major exports of the country?
7. What was their exports worth in 2008-09?
8. What was their imports worth in 2008-09?
9. What regional integrations this country is a
member of?
à0. Equivalence of local currency as against
one US $
à
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îEstablished in à962 by Sam Walton
îNow the largest retailer of the world with a
sale of $256B in 2003
îà.5 million associates
î4,500 stores
îUntil à99à confined to US Markets only
îBase of competitive advantage:
î Efficient merchandising, buying power and
human relation policies, Most modern
distribution system to track sales and inventory,
among first companies to promote stock
ownership among employees.

à
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îÎhese factors increase productivity &

drive down the cost which is passed on
to the consumers, which enhances their
market share.
îà990 Wal-Mart felt the congestion in the
market.
îà995, they were active in all 50 states.
î2000, they thought would meet the
saturation point. So they decided to
expand globally.

à
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î |ritics view:
î Wal-Mart is too American a company and would
not succeed in different environment; different
infrastructure, consumer taste, preferences vary
and established retailers already dominated.
î à99à, Wal-Mart established its first store in ? With
a JV with |ifera, largest local retailer
î Main issues: |ould not replicate distribution
system, poor infrastructure, crowded roads, lack
of leverage with local suppliers who would not
directly deliver to Wal-Mart, thus resulting in stock
issues and raised cost and prices.
î Initially the prices were 20% more than those
being sold in US which reduced gain to market
share.
à
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î Already many of the Mexican stores were selling
popular Wal-Mart stuff before Wal-Mart entry.
î By mid 90s, Wal-Mart learned from its mistakes.
î Adopted to local environment
î Acquired a partnership with _ _ _ _ _ _ that
dramatically improved its ______
î A more careful stocking practice for taste and
preference was made
î Improved the share
î Many of Wal-Mart suppliers started building
around Mexican distribution centers.
î à998, it acquired interest in |ifera. By 2003, it had
623 stores in Mexico with revenues more than
$ààB.
à
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î Expanded after Mexican Experience, Wal-Mart
grew in 9 other countries: |anada, Britain,
Germany, Japan, South Korea by acquiring
existing retailers and then transferring its info
system, logistics and management expertise.
î In Puerto Rico, Brazil, Argentina and |hina, Wal-
Mart established its own stores.
î By 2003, company had over à,350 stores outside
US and $46B of revenues and 330,000
associates.
î Growth of Wal-Mart enables its suppliers to grow
as well: Unilever, P&G, GE etc
î Wal-Mart continues to learn and increase its
product line
What do you learn from this |ase? à
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î  

 
3,630 total units as of January 3à, 2009
î Mexicoà,à97 November à99à
î Puerto Rico56August à992
î |anada3à8November à994
î Brazil345May à995
î Argentina28August à995
î |hina (*)243August à996
î United Kingdom358July à999
î Japan386March 2002
î |osta Ricaà64September 2005
î El Salvador77September 2005
î Guatemalaà60September 2005
î Honduras50September 2005
î Nicaragua5àSeptember 2005
î |hileà97January 2009

(*) Includes a 35% interest in Îrust-Mart, which operates à00 stores in

|hina. à
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îInternational |ustomers:
î49 million international / week
îInternational Associates:
î680,000
îÎotal International Sales:
î$90.6 Billion in 2008
î$6.63 Billion in Jan. 2009

à à
 

  





à. Question: What is International?

2. Question: What is Business?

3. Question: What is Management?

à àà
  a
 


Question: What is globalization?

Globalization refers to the trend towards a more
integrated global economic system
a
 
 the ongoing social, economic,
and political process that deepens and
broadens the relationships and inter-
dependencies amongst nations²their people,
their firms, their organizations, and their
governments



à à

 

 
a
 


îÎhe globalization of markets refers to the

merging of historically distinct and separate
national markets into one huge global
marketplace
îÎhe globalization of production refers to the
sourcing of goods and services from
locations around the globe to take
advantage of national differences in the cost
and quality of factors of production (labor
energy, land, and capital)

à à
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î Several global institutions have emerged to

î help manage, regulate, and police the global
market place
î promote the establishment of multinational
treaties to govern the global business system
î Notable global institutions include
î the World Îrade Organization (WÎO)
î the International Monetary Fund (IMF)
î the World Bank
î the United Nations (UN)

à à
 ƒ
 
a
 


Question: What is driving the move

toward greater globalization?

î Îhere are two macro factors underlying

the trend toward greater globalization
à. declining trade and investment
barriers
2. technological change

à à
 ƒ
 
a
 


îInternational trade occurs when a firm

exports goods or services to consumers in
another country
îForeign direct investment (FDI) occurs
when a firm invests resources in business
activities outside its home country

à à
Î
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In the à960s:
îthe U.S. dominated the world economy
and the world trade picture
îthe U.S. dominated world FDI
îU.S. multinationals dominated the
international business scene
îabout half the world-- the centrally
planned economies of the communist
world-- was off limits to Western
international business
Îoday, much of this has changed.
à à
Î
|ƒ

! 


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Îhe |hanging Demographics of World

GDP and Îrade

à à
Î
|ƒ

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a
 



îÎhe share of world output generated by

developing countries has been steadily
increasing since the à960s
îÎhe stock of foreign direct investment
(total cumulative value of foreign
investments) generated by rich industrial
countries has been on a steady decline
îÎhere has been a sustained growth in
cross-border flows of foreign direct
investment
îÎhe largest recipient of FDI has been
|hina
à à
Î
|ƒ

! 


a
 



Percentage Share of Îotal FDI Stock, à980

- 2006

à

Î
|ƒ

! 


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FDI Inflows, à988 - 2007

à
à
Î
|ƒ

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îA multinational enterprise is any

business that has productive activities in
two or more countries
îSince the à960s,
îthere has been a rise in non-U.S.
multinationals
îthere has been a rise in mini-
multinationals

à


Î
|ƒ

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î Îoday, many markets that had been closed to

Western firms are open
î Îhe collapse of communism in Eastern
Europe has created a host of export and
investment opportunities
î Economic development in |hina has created
huge opportunities despite continued
|ommunist control
î Free market reforms and democracy in Latin
America have created opportunities for new
markets and new sources of materials and
production

à

Î
|ƒ

! 


a
 



îA more integrated global economy

presents new opportunities for firms, but
it can also result in political and economic
disruptions that may throw plans into
disarray

à

Î
a
 
ƒ


Question: Is the shift toward a more

integrated and interdependent global
economy a good thing?

îMany experts believe that globalization is

promoting greater prosperity in the global
economy, more jobs, and lower prices for
goods and services
îOthers feel that globalization is not
beneficial

à


a
 
! 

Question: What does the shift toward a

global economy mean for managers
within an international business?

îManaging an international business (any

firm that engages in international trade or
investment) differs from managing a
domestic business in four key ways

à


a
 
! 

à. |ountries differences require companies

to vary their practices country by country
2. Managers face a greater and more
complex range of problems
3. International companies must work
within the limits imposed by
governmental intervention and the global
trading system
4. International transactions require
converting funds and being susceptible
to exchange rate changes

à