Taghiyev Salman
Case Study
Wall-Mart
1. Why is Wal-Mart’s German branch not yet profitable?
In 1997, Wal-Mart had entered in the German retail market through acquiring the failing German retail chain Wertkauf but quickly encountered problems. Wal-Mart had demonstrated phenomenal success in the US by providing an Every Day Low Prices guarantee, inventory control, and efficient distribution. Wal-Mart is the biggest company in its sector worldwide and usually considered the most successful as well. But surprisingly, its well-tested U.S. sales- and marketing concept doesn't work in Germany - the only country in the world where …show more content…
Opening international stores in new markets.
It seems that the weak dollar gives Wal-Mart a great market growth opportunity. Thus, Wal-Mart should take this opportunity and further develop its international expansion into those developing markets where its existing operations are located. This is because Wal-Mart has already gained knowledge about the local cultures and consumer tastes, which will facilitate Wal-Mart to start the operations of its new stores on the right track immediately
As I mentioned in the previous section, Wal-Mart has already had many branches in emerging markets all over the world, such as China, Mexico, Brazil, and Argentina. To take advantage of the opportunity Wal-Mart has gotten right now, Wal-Mart should increase its stakes in these countries. For example, the Latin America offers a big market. Wal-Mart’s future in that market is bright. However, Wal-Mart only has 10 Supercenter stores in Argentina (Wal-Mart Official). Compared to its operations in other developing countries, Wal-Mart has the least number of stores in Argentina. Since Wal-Mart has already adapted to the local business environment in Argentina, Wal-Mart should continue to open more stores there and try to capture the market share as much as possible. Another reason why Wal-Mart should increase the number of stores in those developing countries is because operations in these countries are already proven to be able to help Wal-Mart increase its revenue when domestic market is saturated …show more content…
The benefit of it is tax liability deduction. The only requirement for DEI is that significant economic benefits must be generated by Wal-Mart in Singapore.
Investment Allowance is also a tax incentive. It is a capital allowance to reduce the costs of equipments that either apply new technology or increase the efficiency of the operations. If Wal-Mart needs to buy any types of equipment that is never used before, such as high-technology devices, or equipment that can improve the efficiency of its operations. Wal-Mart may consider applying to this incentive to get a tax exemption.
If Wal-Mart wants to set up a regional headquarter in Singapore and to use Singapore as a base to monitor activities in other countries in Southeast Asia, Wal-Mart can also apply for Regional Headquarter Award, which provides either tax incentives or grants to foreign investors in order to help them succeed. This means the assistance provided by this scheme is customized to each individual company’s
Case Study
Wall-Mart
1. Why is Wal-Mart’s German branch not yet profitable?
In 1997, Wal-Mart had entered in the German retail market through acquiring the failing German retail chain Wertkauf but quickly encountered problems. Wal-Mart had demonstrated phenomenal success in the US by providing an Every Day Low Prices guarantee, inventory control, and efficient distribution. Wal-Mart is the biggest company in its sector worldwide and usually considered the most successful as well. But surprisingly, its well-tested U.S. sales- and marketing concept doesn't work in Germany - the only country in the world where …show more content…
Opening international stores in new markets.
It seems that the weak dollar gives Wal-Mart a great market growth opportunity. Thus, Wal-Mart should take this opportunity and further develop its international expansion into those developing markets where its existing operations are located. This is because Wal-Mart has already gained knowledge about the local cultures and consumer tastes, which will facilitate Wal-Mart to start the operations of its new stores on the right track immediately
As I mentioned in the previous section, Wal-Mart has already had many branches in emerging markets all over the world, such as China, Mexico, Brazil, and Argentina. To take advantage of the opportunity Wal-Mart has gotten right now, Wal-Mart should increase its stakes in these countries. For example, the Latin America offers a big market. Wal-Mart’s future in that market is bright. However, Wal-Mart only has 10 Supercenter stores in Argentina (Wal-Mart Official). Compared to its operations in other developing countries, Wal-Mart has the least number of stores in Argentina. Since Wal-Mart has already adapted to the local business environment in Argentina, Wal-Mart should continue to open more stores there and try to capture the market share as much as possible. Another reason why Wal-Mart should increase the number of stores in those developing countries is because operations in these countries are already proven to be able to help Wal-Mart increase its revenue when domestic market is saturated …show more content…
The benefit of it is tax liability deduction. The only requirement for DEI is that significant economic benefits must be generated by Wal-Mart in Singapore.
Investment Allowance is also a tax incentive. It is a capital allowance to reduce the costs of equipments that either apply new technology or increase the efficiency of the operations. If Wal-Mart needs to buy any types of equipment that is never used before, such as high-technology devices, or equipment that can improve the efficiency of its operations. Wal-Mart may consider applying to this incentive to get a tax exemption.
If Wal-Mart wants to set up a regional headquarter in Singapore and to use Singapore as a base to monitor activities in other countries in Southeast Asia, Wal-Mart can also apply for Regional Headquarter Award, which provides either tax incentives or grants to foreign investors in order to help them succeed. This means the assistance provided by this scheme is customized to each individual company’s