- 03/12/2012
- Posted by: essay
- Category: Free essays
Wal-Mart is one of the largest retailers in the world. Today, the company operates worldwide and keeps growing to expand its business internationally. In such a context, the development of a long-run and short-run investment strategy should be focused on the development of Wal-Mart, its international expansion, and extension of its operations at the local level. In this respect, it is possible to recommend focusing on two investment projects: first, the development of a new store of Wal-Mart in a new country, such as Brazil; second, the development of the close cooperation of a Wal-Mart store with local suppliers, for instance farmers.
The development of Wal-Mart implies the international market expansion of the company. This is why the opening of a new store of Wal-Mart in such a country as Brazil can have good prospects and bring considerable return on investments. First of all, it is important to lay emphasis on the fact that the opening of the store of Wal-Mart in Brazil is very perspective because Brazil is a rapidly growing economy that means that the local population will be able to attend Wal-Mart on the regular basis that will bring considerable profits to the company. At the same time, the opening of the new store will need substantial investments in the construction of the store. In this respect, it is important to find the location for the construction of the store. The store should be located in a large city, such as Sao Paolo. The location of the Wal-Mart store in a large city, such as Sao Paolo will attract a large number of customers and the store will maintain the positive marketing performance due to the large number of customers. In addition, the number of customers can grow due to the growing popularity of the store among customers and the high quality of services and products supplied by Wal-Mart to its customers.
In addition, the Wal-Mart store should be located close to the city’s infrastructure, roads, and communication systems. In such a way, the company will save costs on building up the infrastructure of the new store. The new store should have a large parking spot to provide customers with the possibility to park their cars next to the store.
In such a context, the question of funding the project arises.
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In actuality, Wal-Mart can afford the construction and opening of the new store in Brazil but it is possible to recommend using bank loans to accelerate the construction and opening the store. Naturally, the company will need to pay off the bank interests but the bank loan allows the company to open the new store fast and start business which can bring considerable profits. In such a way, it is possible to count for return on investments in three-five years period.
At the same time, the company may need the assistance of a local business partner which can help Wal-Mart to find local suppliers and to adapt the marketing strategy to local peculiarities. In this regard, it is worth mentioning the fact that Brazil has its own specific culture and Wal-Mart needs to take into consideration the specificities of the local culture to develop its business in this country successfully. The success of the new store in Brazil is crucial in a long-run perspective because it will help the company to enter Brazilian market and gain a larger share of this market. This is particularly important, taking into consideration the fast economic growth of Brazil and huge economic potential of this country.
Another project Wal-Mart can implement in a short-run perspective is the development of the close cooperation between a Wal-Mart store, for instance, in Canada with local suppliers. This project should focus on the development of positive relationships of the company with its suppliers. For instance, it is possible to refer to local farmers, who can supply fresh food and organic farming products to Wal-Mart store. In such a way, Wal-Mart will not only improve its marketing performance due to the effective supply chain management but also due to the consistent improve of the public image of the company among customers. In this respect, it is necessary to point out the fact that the company has a negative public image because people belive that Wal-Mart has a negative impact on the local economy. Through the cooperation with local farmers Wal-Mart will prove that the company may have a positive impact on the local economy. Therefore, the public will accept the company and the number of loyal customers is likely to increase. The funding of the project will be provided by the company itself because Wal-Mart has sufficient resources to afford this project and this project is essential for the short-run success of the store in the local market.
Thus, taking into account all above mentioned, it is important to lay emphasis on the fact that the two projects discussed above can improve the position of Wal-Mart at both local and international levels.
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