International Business

Abstract

International expansion holds diverse risks for business. When expanding business globally, businesses confront several challenges. These challenges are in terms of differences in market structure, differences in the economic system, and differences in the political situation. In addition, the needs and preferences of stakeholders are also different in different countries. In this situation, businesses need to modify their strategies according to the political, cultural, and economic environment of a region. Wal-Mart is one of the Fortune 500 companies. The company is a leader in the global retail industry. This study involves an analysis of the political risks confronted by Wal-Mart in different markets.

International Business

Company Overview

Wal-Mart is the largest global retail chain store. Wal-Mart is not only famous as a global retail store but also as the world's largest retailer. The company is operating in thirteen international markets. The countries in which Wal-Mart is operating include UK, Canada, Japan, Mexico, China, and Brazil.

Company's Operations

Wal-Mart is operating in as many as 10 countries outside the United States. Asian market has provided Wal-Mart with diverse opportunities. The company has already started its operations in Japan, Korea, and China. In the European Market, Wal-Mart has started its operations in British and German market. In addition, the company is also operating in Mexico, United States, Canada, and Puerto Rico.

Differences in Market Systems

Wal-Mart has operated successfully in the United States market. The aggressive supply chain strategy of Wal-Mart i.e. 'pile it high and sell it cheap' has not worked successfully in all foreign markets. The differences in market conditions and consumer preferences had a significant impact on the expansion plans of Wal-Mart (Rock, 2001). The structure of European markets differs from that of North American markets. The productivity of European markets is less than that of North American markets.

Wal-Mart also confronted differences in market structure in the Chinese market. The retail market of China is significantly different from the United States market. The retail market of China is highly fragmented. The cultural idiosyncrasies of the Chinese market are significantly different from that of the United States' market. The socio-cultural characteristics of the Chinese market are not uniform therefore it is difficult to predict them.

Political Risks

Wal-Mart has confronted diverse political risks in different economies. The ongoing between the United States and European countries is one of the most significant political threats confronted by international businesses. The war has resulted in an increase in ...