Friday, February 18, 2011
Walmart in South Africa
This article highlights the acquisition of Massmart, a South African firm that owns 290 retail stores in Africa, and the opposition they are facing from stakeholders. Many competing African businesses claim Walmart will kill off the unions, make les humane working conditions, and import Chinese goods instead of acquiring the products from more local African sources. Walmart on the other hand claims that they will not change Massmart's business model, and they only wish to accelerate the growths in business. Now we must wait and watch.
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6 comments:
Walmart has had tremendous success at growing its business, and I can understand why their is opposition to their acquisition in South Africa due to fear of a monopoly that will make other firms less competitive and less profitable. Walmart is extremely good at getting their products in bulk and selling them fast and for cheap. It will be interesting to see if they actually do keep Massmart's business model or if they don't find Massmart's current business model as profitable as it could be with the typical business model of Walmart.
It's just a matter of time before Walmart changes Massmart's business model and introduces its own. Walmart has a well-working model that proved to be efficient and profitable and there is no reason why Walmart should not use it in South Africa. If I were a stakeholder, I would be really concerned about this acquisition.
I believe Wal-mart will totally restructure the model to its own and it will be very successful, as it is all over the world. The needy will feed off the low prices, yes, but the competitors will be in for a treat competing against a powerhouse such as Wal-mart.
Walmart is smart. They are one of the most profitable companies in the entire world. They have made a statement in the United States by leading the food and retail industry. Walmart is making a great move by taking it to South Africa. South Africa has a large population of middle and lower class that will take advantage of the low prices. They will thrive as they have in the US.
I agree with Scott.. Wal-mart will have extreme success in South Africa as they exploit the large population of people in the lower class who are dependent on low priced goods
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