WalMarts International Expansion - Essay Example

The rest of the countries were also close geographically, like Puerto Rico and Canada. Expansion to other countries such as Hong Kong could have considered the nature of expanding markets and the vast opportunities that the target markets from this location could contribute to Wal-Mart’s international growth. The organization could have also considered the incentives provided by the international governments, including tax incentives or subsidies for setting up greenfield investments in these areas.

3. On what grounds do you think Wal-Mart chooses between acquisitions, greenfield investments, and joint ventures when entering a foreign market?

            Wal-Mart chooses between acquisitions, greenfield investments, and joint ventures on the following grounds: (1) after considering costs of market entry; (2) cultural underpinnings; (3) government incentives and legal laws; (4) human resources expertise and capabilities; (5) familiarity with the environment; and (6) consumer profiles. Under greenfield investments, for example, Wal-Mart decides based on lack of potential targets to be acquired and there are local resources deemed experts to operate the organization. The joint venture, are most appropriate in cases where there has been an identified organization with competencies in the area, and both partners could contribute their respective core competencies to result in long-term mutual gains. As indicated by the case facts, “a joint venture agreement rather than full FDI (is opted), especially when first entering an unfamiliar environment. At other times, the company has built new stores on a greenfield site or has acquired an existing established retailer” (Case Study: Wal-Mart's International Expansion n.d., 227). Its experience with the German market has proven that expanding to international markets still contains some level of risks, as when the cultural orientation of the people differs markedly from the home organization, then, most likely, the business relationship would not exhibit mutual returns, as expected. Therefore, elements of risk, return, control, and integration are considered by Wal-Mart in determining with entry mode to international markets are most appropriate.