Which of the following is NOT a competitive advantage of Wal-Market in the US? Y

Question

Which of the following is NOT a competitive advantage of Wal-Market in the US?

You are considering the optimal internationalization mode for your business plan. You have developed a new technology, branded by your own name. You are willing to take on a moderate level of consumer market risks (e.g., payment default, income fluctuation, etc.), but you are not ready to take on local labor risks and other operational and country risks (e.g., regulation, cultures, etc.). Which of the following mode is the BEST?

Which of the following competitive advantages of Wal-Mart is LEAST bounded by the US contexts?

If you were to redesign Wal-Mart's entry into Germany, which one of the following is MOST likely to succeed?

Explanation / Answer

Competitive advantage of Wal-Mart:

Walmart has a competitive advantage over its competitors in terms of every-day low pricing, 24X7 service, efficient distribution system and inventory control. Walmart gives full freedom to its employees. It follows all the labour laws.

Thus, the correct answer is option A) harsh working condition for employees.

Internationalization strategy:

The best strategy to go for optimal internalization is to export through own sales representative / sales representatives. I.e. option A).

It is because in other modes, such as licensing, local packaging, export via agents/distributors, the risk of labour, operational and country risk will exist. In the option a. the own sales force will be more manageable.

Competitive advantage boundation:

Walmart has a competitive advantage over its competitors in terms of every-day low pricing, 24X7 service, large shopping space accommodating more customers, efficient distribution system and inventory control. The least bounded Factor is the logistics technologies such as largest database of the company. This factor is an internal strength of the company. While all other are common to every player in the segment.

Hence, the correct answer is option B) i.e. logistics technologies.

Walmart entry into Germany:

The best strategy will be to leverage the scale of economy and logistics technology, negotiate for a joint venture or alliance with one of the largest three retailers (Metro, Aldi, Rewe). It is because entering into a joint venture will lead to reduction of losses by avoiding the risks. It is because, the already existing local players hold a better market knowledge. They will help to better formulate the strategies.

The correct answer is therefore, the option B).

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