The History of Wal-Mart
Anton. R. 2014 Asda-Wall-Mart essay
Wal-Mart is a US-based multinational corporation. Critically discuss the costs and benefits likely to have occurred as a result of its takeover of ASDA, a UK-based company. Wal-Mart is a US based corporation established in 1962 by Sam Walton as one self-service store, in period of 40 years it has developed into one of the biggest and most influential corporations in the world, operating 5000 facilities in 15 different countries. On 26th of July 1999, it successfully acquired the UK based third biggest retail chain ASDA with its 229 stores for 11billion dollars. (OU case study for B200 TMA 07, 2005, pg.61,55,54). In this essay I will identify and examine the benefits and costs that have occurred as a result of Wal-Mart’s takeover of ASDA, however, first it will be necessary to define the term “multinational corporation” and identify the motives that may lead the companies to become MNCs. It is estimated that there are some 35000 multinational corporations worldwide. The MNCs are defined as businesses that own or control foreign assets in more than one country. These numbers of MNCs raise a question, what makes the ownership of foreign assets so attractive for the companies, that they are ready to invest billions of dollars into the acquisitions. In order to answer this question, first we should consider that the primary objective of the for-profit businesses is to maximize their profitability. The ownership of foreign assets presents them with a range of opportunities to achieve this objective. Depending on the business nature and its corporate strategies, by locating their operations within the countries with the suitable market and economic conditions, the companies may be able to increase their market share so sustaining their growth and improving profitability. Or they may also gain competitive advantages by jumping tariff barriers and by achieving significant
Wal-Mart is a US-based multinational corporation. Critically discuss the costs and benefits likely to have occurred as a result of its takeover of ASDA, a UK-based company. Wal-Mart is a US based corporation established in 1962 by Sam Walton as one self-service store, in period of 40 years it has developed into one of the biggest and most influential corporations in the world, operating 5000 facilities in 15 different countries. On 26th of July 1999, it successfully acquired the UK based third biggest retail chain ASDA with its 229 stores for 11billion dollars. (OU case study for B200 TMA 07, 2005, pg.61,55,54). In this essay I will identify and examine the benefits and costs that have occurred as a result of Wal-Mart’s takeover of ASDA, however, first it will be necessary to define the term “multinational corporation” and identify the motives that may lead the companies to become MNCs. It is estimated that there are some 35000 multinational corporations worldwide. The MNCs are defined as businesses that own or control foreign assets in more than one country. These numbers of MNCs raise a question, what makes the ownership of foreign assets so attractive for the companies, that they are ready to invest billions of dollars into the acquisitions. In order to answer this question, first we should consider that the primary objective of the for-profit businesses is to maximize their profitability. The ownership of foreign assets presents them with a range of opportunities to achieve this objective. Depending on the business nature and its corporate strategies, by locating their operations within the countries with the suitable market and economic conditions, the companies may be able to increase their market share so sustaining their growth and improving profitability. Or they may also gain competitive advantages by jumping tariff barriers and by achieving significant