Assignment

Subject: Global Business Environment

Q.1 Case study

L’Oreal International Marketing Strategy

L’Oreal is the world’s biggest cosmetics and beauty Products Company.

Basically it’s a French based company and its headquartered in Paris. It is
focus engaged in the field of production and marketing of concentrating on
hair colours, skin care, perfumes and fragrances, make up and styling
products. L’Oreal products also based on dermatological and
pharmaceutical fields. Their products are made for Individual and
professional customers. This company operates over 130 countries like Asia,
America, East and West

Europe through 25 international brands.

The success of L’Oreal lies in the fact that the company succeeded in
reaching out to the customers of different countries of the world, across
different income ranges and cultural patterns, giving them the appropriate
product they are worthy of. The area of expertise of L’Oreal being that it
succeeded almost in every country that it entered. The strategies of L’Oreal
was varied enough to help it and stop itself from restricting itself in a single
country. L’Oreal sold its product on the basis of customer demand and
country want rather than keeping the product identical across the globe. It
built ample number of brands or mammoth brands entrenched to the
restricted culture and which appealed to a variety of segment of the
universal market instead of generalising the brand and edible in
innumerable culture. L’Oreal went on to being a local product in every
international market. The brand extension of L’Oreal also came in the same
sector or the same segment of market. L’Oreal believed in growing its
expertise in the segment it is conscious of rather than going into a
completely new sector of market.

International marketing strategy is more in-depth and broadened in one

sense of the term. It is simply a principle of marketing however on a global
scale. Setup of global marketing strategy has a lot to do with understanding
the nature of global market itself, and most importantly the environment.

Business environment across the globe has different economic, social and
political influence. Thus, it is believed that selecting a global market target
for examples when strategizing is a good idea. International marketing
strategy of L’Oreal is concentrated on a cross cultural arena spanning four
market destinations. They are namely, 1.) Asian Market, 2.) European
Market, 3.) North America Market and 4.) The African, Orient and Pacific
Region.

Asia

At present L’Oreal is one of the best company in the whole world in the field
of cosmetic products. The cosmetic products of the L’Oreal are widely used
and specially the hair colour which was introduced by L’Oreal few years ago.
L’Oreal is very famous in Asia and their products in Asia are very cheaper
than the other companies and are used by majority of people in china,
Thailand, Japan etc. L’Oreal is famous and very successful because of their
global marketing strategies which are very helpful and also distinct from the
strategies used by other companies in this field. L’Oreal in Asia uses the
sustainable strategy that is of growing the company as the demands of
cosmetic products in the countries like china, Thailand etc is in great
amount. This company uses the strategy of suspicious brand management
and they also brought the strategy of more suspicious acquisitions. The
main problem that a company like L’Oreal faces in Asia is of competition
given by the other companies dealing with the cosmetic products. To
overcome this problem in Asia these companies use the strategy of selling
good quality products at the cheaper rates than the other companies. One of
the best strategies of L’Oreal in Asia is of diversification of the brand and the
main reason behind this strategy by L’Oreal is to make them palatable in the
local cultures. L’Oreal in Asia aims at the management of the global brands
with the local variations and this means that their main aim is of becoming
a local and not the foreign company in Asia. For example L’Oreal in Thailand
has given local names to their stores and most of the employees present in
this company, are local people of Thailand. It is because of all these
strategies; L’Oreal is very successful in whole Asia.

European Market

L’Oreal is the only company which uses the strategies which also supports
the people in many ways and not only in providing good quality products at
cheaper rates. L’Oreal used different strategies of marketing in the European
market like they used the strategy of nurturing self-esteem of the people
with beauty. In France, L’Oreal created the programs like “Beauty from the
heart” for helping the people made helpless by illness or any kind of negative
life experiences. In the countries like UK and Germany, many of the women
and also the young people regain their confidence and their self-image
gradually by using the cosmetics which are provided by L’Oreal.

In European countries L’Oreal also used the marketing strategies like taking
calculated amount of risk etc. but most of the strategies are related to the
growth of the people mentally and not only for the beauty or the fashion
purpose. Various innovative treatment programs are launched by L’Oreal for
the young people of European countries and this company also launches the
free skincare and make-up workshops for the women suffering from cancer.

For example in France a programme named as “La Vie, de Plus Belle” offers
the free skincare and makeup for the cancer suffering women in all over the
France. This helps them to cope with the treatment’s side effects and it also
helps them to retain their self-esteem which is very important for a patient.
In the European countries L’Oreal generally uses the strategy of the
management of brand by which L’Oreal had made a large amount of brands
which are rooted in the local culture and which all appeals to the various
segments of the global market. By using these social types of strategies for
the people of Europe has helped L’Oreal in expanding their business in the
whole Europe.

Question:

(5 × 4 = 20)

1. What is L Oreal's international strategy?

2. What strategies make L Oreal an unbeatable beauty company?

3. How does L Oreal promote their products?

4. Why the crowd go for L Oreal product?

5. What is the unique selling proposition of loreal?

 Assignment
Subject: Global Business Environment

Q.2 Case study

Apple Inc is a multinational American company that design and sells

computer software, consumer gadgets and personal computers. It was
cofounded by Steve Jobs, Steve Wozniak and Ronald Wayne. Apple Inc is
wellknown for being innovative as they kept on producing new innovations
from the first Apple computer Macintosh to the more recent iPhone and iPad
series.

Today Apple Inc. is very well known in the world because of their advanced
technology in products such as iPods, iPhone, Macbooks, Apple TV and
other professional software. All the high tech products provide consumers
with a better living standard in many different ways. Moreover, Apple Inc’s
dominant position in the global market has changed the trend of consumer
usage of electronic appliances such as in virtual communication. People will
never need to carry multiple devices where each one only offers a handful of
functions. Furthermore, Apple also created a substantial value in highly
competitive market and industry which help them to achieve competitive
advantages in an industry with stiff competition. In addition, it resolves the
other external factors that present difficulty challenges to Apple Inc.
Therefore, now Apple Inc is known as a strong company and the market
leader in industry. Now, let us discuss about the current expansion strategy
that used by Apple that make the company has greater success in
marketplace.

The first strategy that use by Apple Inc for their current expansion strategy
is creating innovative idea that slightly different from the competitors that
already exists in market and industry. In order to make the company more
innovative, Steve Jobs focused innovation on competitive pressure and value
proposition by stressing his management style on customer center
innovation and customer experience. As CEO in Apple, Steve Jobs carefully
evaluated competitive pressure and opportunity in market place by
continuously pursuit customer experience innovation. He also focused their
business and IT strategy on customer center experience. It means that Apple
will be more focused on looking outwards, market and business drivers
rather than at the products or services that already exist. Steve Jobs
focused on this strategy because the customers can help the company to
understand what customers need and scarcity of the people so that he can
use the feedbacks as inspiration to deeply investigate and then to create
more innovative, creative and highly advanced technological product or
services that can fulfill the needs of the customers. Therefore, Apple
products design is always attractive and elegant compared to those existing
competitors. Apple products like iPods and iPhones are good examples that
show the innovation of Apple Company by creating digital lifestyle.

The second strategy applied by Apple is differentiation. Apple is using

Macintosh as operating software whereas other personal computer’s
producers are using Windows. The differentiation in operating software gives
Apple a competitive advantage in the personal computer industry. Macbook
users are satisfied with Macintosh performance because it is very energy
saving where the processor will automatically “close” those programs which
are not in use when it is in standby mode. On the other hand, Windows
does not have such technology. Thus, Windows’ users might have to charge
the laptop more often due to the battery consumption is higher than
Macintosh.

In terms of design, Apple came out with an ultra-thin Macbook Air which is
extremely thin compared to those existing laptops. To those consumers who
prefer lighter and thinner laptops will definitely be attracted to the Macbook
Air. Apple does not produce laptops in various colors like Dell or Hewlett
Packard to increase the choices for consumers. However, to those
consumers who are concerned about technology and high performance,
Apple is still the preferable choice.

In terms of applications and software, Appstore provides a platform for

customers to download software and applications according to categories. It
is easy to search for any application or software by using Appstore. iTunes
allow consumers to categorize and download songs easily. By using iTunes,
consumers can choose their preferable album cover for their songs. They
can also “synchronize” and update the songs in their iPhone with a laptop.
Besides that, iTunes also allow consumers to transfer photos from iPhones
to PCs.

As for pricing, Apple is using skimming pricing strategy where they set high
selling price for their products. However, there are still a lot of loyal
customers who prefer to spend more money on Apple products. This is due
to the self-esteem where consumers feel good by carrying Apple products
because it somehow shows their status as being up-to-date and their taste
is better than others. Some customers think that Apple products are not
cheap but also not high-priced products because the value of Apple
products bring to them is never disappointing.

Other than that, Apple is using specialization strategy where they

customized customer’s laptop according to their requirements. Customers
are required to add in features into the laptop which can serve them better.
Beside this, Apple also emphasizes customizability on the part of
entertainment that offer computer-build for high performance such as
gaming. Gaming plays important roles to help Apple to customize in features
and specification to make the products more attractiveness and creativity.

Question:

(4 × 5 = 20)

1. What is the summary of Apple case study?

2. How does strategy match the macro environment?

3. How does strategy match the industry environment?

4. What is the company’s major problem (e.g., what decisions must be

made? What choices must be faced?)?
 Assignment
Subject: Global Business Environment

Q.3 Case study

Dell Social Business Strategy

Dell Inc. is one of world’ largest multinational technology corporation that

manufactures sells and supports personal computer and other computer
related. Dell was founded as PC’s Limited in 1984 by Michael Dell, with a
start-up money totaling $1,000, when he was attending the University of
Texas. Michael Dell started his business with a simple concept that selling
computer systems directly to customer would be the best way to understand
their needs and give them the most computing solutions. The first product
of the company is a self-designed computer called Turbo PC which had
lower prices than major brands. PC’s Limited was not a first company to do
this but was the first to succeed, grossing $73 million in its first year
trading. The company changed its name to Dell Computer Corporation in
1988. They tried to sell computer through stores in 1990 but was
unsuccessful and they returned to sell directly to customers. Dell was
included in Fortune Magazine as one of the world’s 500 largest companies in
1992. Four years later, Dell began to sell computer through its website. In
1999, Dell beat Compaq and became the biggest seller PCs in the US with
$25 billion in revenue. In 2003, the company’s name was changed to Dell
Inc.

In June of 2005, Jeff Jarvis bought a Dell Lemon and paid a premium for
four year in home service plan. He started to face problems with the
machine immediately and he contacted Dell for fixing the problems, but
there was no proper response from Dell. Dell did not provide good service to
Jarvis and with no other option he posted his angry bust on poor Dell
Service on his blog Buzz Machine titled “Dell lies. dell sucks”. His blog post
generated severe criticism of Dell and other unhappy customers joined and
the whole blogosphere started a critical discussion of poor quality of
products and how bad is Dell Technical Support service. Dell which was
already struggling with poor revenues and blogosphere criticism added fuel
to the poor financial performance and hurt Dell reputation badly. The
problem of poor customer service and quality of products was not new as
Dell was not listening to the customer complaints for long and the blogs had
just publicized and gave an opportunity for the aggrieved customers to vent
their anger. Dell had the first-hand experience how social media can impact
the business and how critical it is to listen to customer complaints and fix
them fast.
It took one year for Dell to realize the extent of damage caused by the blogs
and forced the company to announce a new business plan, called Dell 2.0 in
2006 that included an additional $150m investment in their customer
service. The investment included sales channels, both in sales contacts & its
online presence, in its website front and back end and expand the scope of
Dell Connect, which enables a Dell technician to take control of a customer’s
system should they be encountering problems. In March 2006 a community
outreach team was formed that included group of technical support experts
with good interpersonal skills that listens, monitors and reaches out to
bloggers around the world who have questions or may require assistance.

Direct2Dell was launched in July, 2006 and in August Dell expanded blog
outreach to include any conversations about Dell. Initially Direct2Dell blog
was received with negative skepticism, but chief blogger Lionel Menchaca
convinced bloggers that Dell was seriously listening to the bloggers and he
diligently responded and linked to critics. Dell’s team staunched flow of bad
buzz and by Dell’s measure negative blog posts about it have dropped from
49% to 22%. Dell even engaged external agency to monitors online
conversations about Dell.

In February 2007 Dell launched IdeaStorm that allowed Dell users to

provide feedback & valuable insights about the company and its products
and vote for those they find most relevant. The Linux community used this
platform and suggested Dell brought back XP as an option for customers
who wanted it, reduced trialware and listen to customers discuss ideas in
real time. StudioDell (January 07) is a place where Dell users could share
videos about Dell-related topics and videos and podcasts were used to
educate users on various emerging technologies and also offers tips, tricks
and support to get the best out of a Dell product. Dell operated blogs and
forums for dedicated customer engagement topics, joined Twitter (June 07)
with a number of ids. Dell set up a centralized team, appointed a separate
leadership and resources were taken from multiple teams (IT, online) to test
and launch social engagement tools and websites quickly. This team had
developed formal social media strategy and set of social media policies and
governance were set in place.

In 2008 Dell social media presence started to yield results in terms of ROI
and social media has become part of the business strategy and the various
business units were provided specific targets for the social media.
Employees were trained and encouraged to actively participate in various
social media channels, provide customer support through blogs, twitter, etc
and community managers who were responsible for listening and resolution,
content planning, technology testing, planning, and measurement were
named for various business units. Dell even went further with its social
media initiatives a blog for the channel community was launched, online
communities were launched for Dell’s environmental efforts called
Regeneration and technophiles called Digital Nomads and social content
appeared on [Link] (homepage navigation, product pages with ratings &
reviews). The Dell outlet, small business and home offers available on
Twitter had $500,000 in revenues. Dell started a page focusing on SMBs
and fan pages on Facebook.

In 2009, due to the recession pressure social media team had to reduce
headcount which led to the departure of key people in the social media
facing teams within the Dell. The departures had an impact on the Dell
social media presence had seen consolidation in number of blogs & twitter
accounts, slow down in response and lack of experience had further
worsened the situation. But Dell managed to keep up and worldwide
community has grown tomore than 3.5 million people across the social web,
including places like Twitter, Facebook, Direct2Dell and IdeaStorm.
@DellOutlet had close to 1.5 million followers on Twitter with $3 million in
revenue and in total Twitter has resulted in more than $6.5 million in
revenue.

Dell launched the Dell Tech Center in 2009 to revitalize the brand and
increase awareness of Dell’s solutions capabilities as customers valued a
trusted advisor relationship. Dell consolidated its social media strategy in
2010 with appointment of new leadership to the social media division and
together with the old members of dell social media team Dell tried to regain
its focus. Another effort from Dell to maintain its focus on social media was
to open up a Social Media Listening Command Center in Austin Texas under
the leadership of Chief Listening Officer where real-time data is collected
and visualized by Radian6 and displayed across rows of monitors that show
a unique dashboard, offering instant insights into things like customer
sentiment, share of voice and geography. Dell also started on Customer
Advisory Panel events with a goal to bring key customers and key advocates
to Dell HQ in June 2010 to understand their delights and frustrations.
Other Dell CAP events were held in China in November 2010, in Germany in
January 2011 and again in Round Rock in March 2011, focused on
Sustainability topics.

Dell continued to improve its social media presence in 2011 and Social
Media Listening Command center is playing a critical role in these efforts.
Dell is tracking 25,000 online mentions both posts and tweets about Dell
every day and understand this information based on topics, sentiment,
share of voice, geography, and trends and use it answer customer questions,
address their concerns, build better products, and improve the overall
Media professionals and turned them into frontline social marketers who
engage in Twitter, Facebook, LinkedIn, blogs, and more on the company’s
behalf. Dell views employees’ social media participation as an asset rather
than a liability and accordingly doesn’t restrict team members from utilizing
mobile devices, apps or social media. Dell is using social media as a
platform to support various campaigns and used it in the promotion of its
first Customer Event Dell World and launched website,
[Link] (Formerly [Link]) which is a micro
site featured daily, topical blogs written by InformationWeek editors and
writers as well as Dell executives to gain insights. Social media has provided
an opportunity for Dell not only to interact with customers, understand
their opinions and needs but also provided a marketing platform where in
they can advertise their products, improve the brand image and loyalty and
improve their revenues with rise in sales. Dell initially entered into social
media not to sell its products but to respond to its customer complaints and
feedback but customers wanted to access to special deals from its social
feeds that link to products, reviews or discounts. Dell is committed to
improving overall level of customer service continuously which is 24×7
“always-on” customer service philosophy through social media and has
made it a critical part of business strategy with clearly defined policy and is
considered as on of the top companies in the world that is significantly
profiting through the use of Social media.

Question:

(4 × 5 = 20)

1. How to manage the social media presence and what strategy the company
should adopt for its social media presence?

2. How to engage employees and other stakeholders in the social media

platforms and how to use the information in organizational decision
making?

3. How to generate good ROI from the social media marketing initiatives and
profit from social media presence?

4. What technologies and platforms are to be used for social media and how
to measure ROI?
 Assignment
Subject: Global Business Environment

Q.4 Case study

In January 2004, leading global automobile company and Japan's number

one automaker, Toyota Motor Corporation (Toyota), replaced Ford Motors
(Ford), as the world's second largest automobile manufacturer; Ford had
been in that spot for over seven decades. In 2003, Toyota sold 6.78 million
vehicles worldwide while Ford's worldwide sales amounted to 6.72 million
vehicles (General Motors, the world's largest car manufacturer sold 8.60
million vehicles).

According to reports, while Toyota's market share in the US increased from

10.4% in 2002 to 11.2% in 2003, Ford's declined from 21.5% to 20.8%
during the same period. Reaching the No.2 slot was a major achievement for
Toyota, which had begun as a spinning and weaving company in 1918. Ford
was reportedly plagued by high labor costs, quality-control problems, lack of
new designs and innovations, and a weak economy during the early 21st
century, which made it vulnerable to competition. Toyota, aided by its new
product offerings and strong financial muscle had successfully used this
scenario to surpass Ford and affect a dramatic increase in its sales figures.

In November 2003, Toyota announced its financial results for the half-year
ended September 30, 2003. Business Strategy | Case Study in
Management, Operations, Strategies,

Business Strategy, Case Studies

The company reported a 23% increase in net income (as compared to the
corresponding period of the previous year) to $4.4 billion on revenues of
$69.7 billion. This took Toyota way ahead of World's top three automobile
makers (at that time) by sales, General Motors (GM), Ford Motors (Ford) and

Daimler Chrysler. Its market capitalization of $110 billion (on November 05,
2003) was more than the combined market capitalization of these three
players. (See Table I).

Given the fact that in 2003, these top three companies were struggling to
maintain their sales and profitability targets, Toyota's performance was
termed remarkable by industry observers (See Exhibit I for the company's
financials). Toyota had emerged as a formidable player in almost all the
major automobile markets in the world. Interestingly, one of its strongest
markets was the US, the world's largest automobile market and the home
turf of Ford and GM. Toyota had emerged as a strong foreign player in
Europe as well, with a 4.4% market share. In China, which the company
had identified as a strategic market for growth in the early 21st century, it
had a 1.5% market share.

The other major markets in which the company was fast strengthening its
presence were South America, Southwest Asia, Southeast Asia and Africa.3
Back home in Japan, it enjoyed a market share of over 43%. Analysts
attributed Toyota's growing sales across the world to its aggressive
globalization efforts that began in the mid-1990s.

The company constantly strived to ensure that each of its market segments -
Japan, North America, and Europe and other markets - generated onethird
of the annual sales (See Exhibits II and III for revenues and revenue growth
data in its core markets). This goal was at the heart of Toyota's three
globalization programs - New Global Business Plan (1995-1998), Global

Vision 2005 (1996-2005) and Global Vision 2010 (2002-2010). In the light of
Toyota's intensifying globalization efforts, Toyota's competitors themselves
stated that Toyota could not be taken lightly. GM's Chairman, John F.
Smith Jr., said, "I would not say they will not make it. Toyota is an excellent
company. They are very focused on what they do and they do it well, and
that is what makes them great."4

Business Strategy | Case Study in Management, Operations, Strategies,

Business Strategy, Case Studies

Background Note

Toyota's history dates back to 1897, when Japan's Sakichi Toyoda (Sakichi)
diversified from his traditional family business of carpentry into handloom
machinery. He founded Toyoda Automatic Loom Works (TALW) in 1926 for
manufacturing automatic looms. Sakichi invented a loom that stopped
automatically when any of the threads snapped. This concept (designing
equipment to stop so that defects could be fixed immediately) formed the
basis of the Toyota Production System (TPS) and later became a major factor
in the company's success. In 1933, Sakichi established an automobile
department within TALW and the first passenger car prototype was
developed in 1935. Sakichi's son, Kiichiro Toyod (Kiichiro), convinced him
to enter the automobile business, and this led to the establishment of
Toyota in 1937. During a visit to Ford to study the US automotive industry,
Kiichiro saw that an average US worker's production was nine times that of
an average Japanese worker. He realized that to compete globally, the
Japanese automobile industry's productivity had to be increased...
The Second Phase of Globalization

Cho decided to focus more on localization - he believed that by doing so,

Toyota would be able to provide its customers with the products they
needed, where they needed them. This was expected to help build mutually
benefiting, long-term relationships with local suppliers and fulfill Toyota's
commitments to local labor and communities. Cho defined globalization as
'global localization.' Therefore, besides focusing on increasing the number of
manufacturing centers and expanding the sales networks worldwide, Toyota
also focused on localizing design, development and purchasing in every
region and country...

The 2010 Global Vision

In April 2002, Toyota announced another corporate strategy to boost its

globalization efforts. This initiative, termed the '2010 Global Vision' was
aimed at achieving a 15% market share (from the prevailing 10%) of the
global automobile market by early 2010, exceeding the 14.2% market share
held by the leader GM.

The theme of the new vision was 'Innovation into the Future,' which focused
on four key components: Recycling Based Society; Age of Information
Technology; Development of Motorization on a Global Sale; and Diverse

Society (See Table III)...

Business Strategy | Case Study in Management, Operations, Strategies,

Business Strategy, Case Studies

The Globalization Pay-Off

By mid-2003, Toyota was present in almost all the major segments of the
automobile market that included small cars, luxury sedans, full-sized
pickup trucks, SUVs, small trucks and crossover vehicles. According to
reports, while global vehicle production increased by 3.3 times since the
early 1960s, Toyota's production had increased by 38 times. As a result of
its localization initiatives, Toyota had 45 manufacturing plants in 26
countries and regions by this time, and sold vehicles in 160 countries (See

Exhibit IV and V for Toyota's worldwide manufacturing operations and

production details)...

Which Way to Drive From Here?

By the end of 2003, Toyota seemed to be well on its way to achieving its
globalization goals - worldwide sales of 6.57 million units in fiscal 2004;
sales of 2.12 million units in North America by 2004; a 5% market share
(800,000 units sales) in Europe by 2004; a 15% market share in the global
market and a 10% market share in China by 2010.

Analysts felt that the following factors were helping the company in its quest
to become a truly global automobile major: strong financial condition,
globally efficient production system, unique corporate culture, and the
ability to develop a product range that met the unique needs and desires of
customers in different regions.

Question:

(4 × 5 = 20)

1. What marketing strategies does Toyota use?

2. What are the problems faced by Toyota?

3. Why Toyota is so successful in the market?

4. What was the end result of Toyota's crisis management situation?

 Assignment
Subject: Global Business Environment

Q.5 Case study

The company is involved in the serving of over 179 million people in one year
and it also possesses over 2 million associates all over the world. The
number of stores possessed by Wal-Mart numbers to over 7, 343 and its
Sam’s Clubs are also present in over 14 markets. Hence it is not surprising
that it is the biggest retailer in the whole of United States. From the year
2002 the company has been topping the list of fortune 500 list and in the
year 2006 it was pushed to the second place, next only to Exxon- Mobil due
the rise in the price of oil in that year. In the year 2008, the annual revenue
generated by Wal-Mart was over 378 billion dollars. Hence the company
continues to be successful in many nations exploiting the human resources
as well as the other resources in the nations. Its idea is to capitalise on the
strategy set by the company for global expansions and the present targets of
Wal-Mart are the big nations with huge human resources like Russia and
India.

The strategy used by Wal-Mart at the multinational level is being modified in

such a way that it becomes the transnational strategy and the key aspects of
this strategy includes response at the national level, operations at the
international level and also taking lessons from the operations that are
being conducted on a global scale. The aim of the company in following such
an approach is that it should become the best choice for goods that are low
cost in the United States as well as the whole world. As the company is
basically a retail company it stresses on the concept of orientation of the
consumers by acquisition as well as distribution of goods at a low cost and
at the same time facilitating learning on a global scale by the process of
decentralization, tackling competition over the borders and by sharing its
acquired knowledge. But still in the global business arena, the company is
relatively new and on its way to become a leading player. The stress placed
by the company on the concept of national response has to an extent,
brought about reductions in the operational efficiency of the company
because it was not able to accomplish economy of scale which is enjoyed by
the customers when it comes to the products that are standardized.

The company is involved in the formulation of blueprints for the managers

when it comes to the strategies which they are supposed to follow. According
to the needs as well as the culture of the people there is a high level of
adaptation and the company has its location which is proximal to its
market. The company also shows a lot of sensitivity when it comes to
individual needs of every nation and also responds in an appropriate
manner to these needs. There is also close contact and co-operative working
shown by the company with the respective government so that every rule or
legislation that has been passed by the government could also be taken into
account while designing the strategies. The company is also involved in a lot
of community works by provision of sponsors for the student community
and contributes its share to the welfare of the people in the nations where it
has its operations.

Each of the stores operated by Wal-Mart is from that of the product being
stocked by the company which would move towards the equipment at the
front end and this would go a long way in helping checkouts in a rapid
manner with the philosophy set by the company in place- provision of goods
at low prices every day and at the same time providing customer services
that are of top quality. Hence the added advantage of the low costs is that
the expenses incurred in organisation of promotions for sales could be cut
down to a large extent. Moreover the predictability of sales also increases.
The company firmly believes in the system of “cross docking inventory
system” and hence has invested a lot in the same. The process of cross
docking has led the Wal-Mart to attain economies of scale and this has in
turn brought about considerable reductions in the costs that are incurred
for sales. In the system followed by Wal-Mart, there is a continuous delivery
of the goods to the stores in a time of maximum two days and at times there
are no requirements even to inventory them. Hence the shelves of Wal-Mart
are refilled faster than four times of the existing competition in the market.

This is a particular advantage possessed by the company when it comes to

competition. The power of buying of Wal-Mart is leveraged by means of
purchasing in bulk quantities and also the company takes care of its own
distribution. Hence every day low prices are guaranteed by the company and
hence it has become a one stop shop. Hence at present the company owns
stores in a variety of companies like Argentina, Mexico, Brazil, Canada, UK,
Korea china and also in Germany.

The major reason behind the success of Wal-Mart lies in the fact that the
company believes and concentrates on the strategy of single business. This
is the strategy that has been providing the company with success over a
period of over 30 years. In the three decades the company has never believed
in the concept of diversification for the sustenance of its growth and also its
advantages at the competitive level. Hence the services provided by the
company and the low prices offered are the major reasons behinds its
success. The concentration on one particular strategy also poses a threat to
the company because it is equivalent to place all the eggs in one single
bucket.
Question:

(10 × 2 = 20)

1. Explain Wal-Mart’s global expansion strategy.

2. What is single business strategy? Comment your view on the strategy.