The History of Wal-Mart Essay

1589 Words Jun 1st, 2015 7 Pages
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
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In addition, the takeover of food retailer with similar marketing strategies and already established local distribution networks, has allowed Wal-Mart to minimize the import of the food-products, thereby, significantly reducing its transportation and import tax expenses.( Sloman/Sutcliffe, 1998 in Suneja, 2000. Pg. 50, 51). In regard to ASDA, according to (Levine, J. 2004) Wal-Marts arrival had positive effects on ASDA’s operational productivity and efficiency. Considering that, the Wal-Mart’s success was mainly built on its ability to maintain highly competitive prices which was achieved through its managerial competencies and the efficiency of distribution systems, which was supported by company’s technological advantages. The takeover has enabled ASDA to access and exploit these competitive advantages, therefore, after the acquisition the company has moved over to the standard Wal-Mart corporate systems. In the period of 18 months almost every company’s operational and financial system was replaced, so eliminating any operational discrepancies between the companies and thereby enabling ASDA to engage into the global sourcing with Wal-Mart more effectively. As a result the company was able to further reduce its prices, increase

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