1. Executive Summary
This report will focus on the foreign market and a multinational corporation’s entry modes. In this report, the focus would be on Wal-Mart stores, which was ranked first in the Fortune 500 MNCs for the year of 2013. Wal-Mart, a multinational retail corporation was originally established in United States. In the present, Wal-Mart has been operating in 26 countries outside of the U.S. These countries includes Central America, China, Japan, India and many more. This report also examined the internationalization process that Wal-Mart adapted when it entered India and why the specified entry mode was chosen.
2. Introduction on Wal-Mart
Wal-Mart, founded in 1962, is a well known American that company operates warehouse…show more content… In India, consumers welcome FDI in infrastructure, automobile and aviation. However, industries like retail and insurance are not supportive of FDI as local investors see this as a threat for their business and rivalry. In India, the retailing sector have been segmented into three categories such as single-brand, multi-brand and Cash-and-carry. Wal-Mart comes under the “cash-and-carry”. The government have allowed 100 percent of FDI in wholesale retail. As per the “cash-and-carry” structure, wholesale and retail entities should maintain a separate entity and without any interference with shareholdings. Wal-Mart have successfully entered into India with the partnering with Bharti Enterprises. Wal-Mart will handle the back end operation, whereas Bharti enterprise will run the retail operations. Second dimension would be the location. Location advantage is the factors that make the country attractive to a business venturing into the country. Some factors that make India attractive are the market size and low cost of labor. The Indian market consist mainly of middles-class and low-income families. Since, Wal-Mart provides low cost pricing to its consumers, it gains great advantage in the Indian market. Thirdly, the internalization dimension related to handling of how a company is being operated in another country by…show more content… As for Wal-Mart, it is moved its business to India and set up a full owner subsidiary for product sourcing. Wal-Mart, not only use the low cost labor to its advantages, it has partnered with the local farmers to provide fresh vegetables to be sold in the supermarket and the farmers will be profited.. As, there are more agricultural activities that is happening India, it is a win-win situation for both Wal-Mart and the farmers. Different business operates differently in different companies. Hence, Wal-Mart was able to identify the source of the competitive advantages to match its choices which makes it is a national competitive