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Wall-Marts Take over of Asda Essay Critically discuss the likely costs and benefits of its takeover of USDA, a ILK-based company Wall-Mart is the worlds largest retailer with over 8400 stores worldwide employing 2 million people. It serves more than 200 million people with global sales exceeding IEEE billion. (Basket, 2007) Wall-Mart is globally organized so that it can respond quickly to changing markets and cost conditions in its international locations. The UK is one of these locations. This essay Will firstly explore features that are Of benefit before considering features that are Of detriment to Wall-Mart and the UK in the aftermath of its take-over of USDA. Wall-Mart benefited from the acquisition of USDA because USDA had a skilled, trained work force with low wages and labor costs. This meant it took over an already successful retail business, and so expanding its global foot print while making savings due to avoidance of tariffs for being based in the ILK. Wall- Mart can make further savings by exploiting its economies of scale related to advertising, procurement and transportation that its global network gives it. In addition the ILK government created an attractive environment for Multi National Companies like Wall-Mart to invest in. This environment was created by offering a number of cost reducing and financial incentives. The effect of these incentives was designed to reduce investment risk and so encourage investment and create jobs. But consequentially, Sads acquisition by Wall-Mart signaled a change in food retailing in the KICK_ In response its competitors intensified the price and cost pressures they exerted on their suppliers. Responses from a Competition Commission survey indicated that since the Wall-Mart take over relationships between suppliers and supermarkets had largely worsened. Competition Commission). A benefit to the UK population is Wall-Mart}Sads stated value proposition based on offering Everyday Low Prices. Wall-Mart Mission statement says; We save people money so they can live better. Everything Wall-Mart/USDA does is designed to keep the everyday price low. This implies that customers do not need to wait for sales to get the best deals (Manning et al 1998). Not only are stores conveniently positioned around the I_J providing a wide range of products, but Wall-Mart/USDA is becoming a one stop shop for the purchasing of groceries, pharmaceuticals, holidays, and a raft of other goods and services. An incidental benefit to the UK shopper is Wall-Marts appeal, as a 2007 Customer Relations report described. Wall-Mart/USDA is attractive to three types to customer: brand aspirations, people with love incomes who are obsessed with brand; price-sensitive effluents, wealthier shoppers who love deals; and Value price shoppers who like low prices and cannot afford much more, (Barbara, 2007) Wall-Mart is known as a company that does not waste money. Its aim always has been to drive down costs, this does not mean it will not take risks and invest in new infrastructure and technology. Wall-Mart/USDA has a technological edge over TTS competitors With its inventory control, logistics, distribution and consumer data software. Moving goods quickly and efficiently keeps costs down, which is ultimately What the consumer wants. An example Of how this investment was put to use came in 2005. The compacts consumer data analysis software highlighted during the run up to Ramadan the stores that were located in areas with significant Muslim populations. This allowed Wall-Mart/USDA to prepare for Ramadan in a culturally appropriate manner. Wall-Mart acquired USDA for sound business reasons which have brought benefit to the UK but it may face problems from this expansion. Being a US company Wall-Mart may find strategies that work in the LISA will tail in the K due to cultural and social differences, This could foster a belief locally that Wall-Mart is trying to impose LIST values and habits. In Cold Blood - Death Penalty EssayWall- Mart is the nastiest company weve dealt with. It has no moral compass. It tours the world looking for workers willing to accept the lowest pay and the least benefits__. What impact it will have on Safely and USDA in the long run is very troubling (Observer newspaper). As another example of Wall-Marts negative impact, and an issue that could cause the [J public to shop differently if it is given enough publicity, is the claim from charities that Wall-Mart/USDA keeps prices low by unfair strict regimes in its stores and suppliers. The suppliers know that due to Wall-Marts huge network ND economy of scale, if they do not agree to the prices set, it can buy produce elsewhere Which could in the long term put the supplier out Of business. As an extreme example of this, Ralph Gonzales, Prime Minister of SST Vincent and the Grenadines, said in 2003 that he had seen a negative effect on the islands economy after the takeover of USDA by Wall-Mart: What they want to do is to drive everyone out Of the market and then to raise the prices. The people Who supply Wall-Mart are paying people starvation wages in Central America and Latin America in conditions that no civilized country would accept (Trading away our rights, Sofas). In conclusion, the debate will continue as to the benefits and cost of the Wall- Mart take-over of USDA. It is true to say that the British public is profiting from Wall-Marts economy of scale and global network of suppliers. The low cost and variety to goods is unparalleled. As Wall-Mart}USDA grows in importance, so will its strategic interaction with other retail chains. Wall-Marts decisions not only affect its large chain competitors, but are also shaped by their anticipated responses, creating an interaction that is more subtle and complex than the relationship between Wall-Mart and its small-scale local competitors. It is likely that other Hahn retailers have copied Wall-Mart or changed their practices in ways that reflect Wall-Marts influence. However, there is a downside. Wall-Mart/USDA is an embedded retail superpower. When it moves into an area, smaller businesses and local economies suffer.