homework # 5

homework # 5 - Reading Questions for Ghemawat, Ch. 2...

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Reading Questions for Ghemawat, Ch. 2 Professor Primo Fall 2010 Tuesday, October 19, 2010 1. Fig. 2-1 of Ghemawat’s book presents a possible relationship between geographic distance and profitability for Wal-Mart stores in multiple countries. Do you think that geographic distance is the best explanation for why Wal-Mart is successful in some countries but not others? Why or why not? It is part of the explanation but it is not the entire explanation. Being successful in a market depends on various factors. The fact that there is a short geographic distance might be helpful for the control and administration of the business, but it is not the only reason Wal-Mart was successful or not in its international markets. It all depends on the integrated strategy of the business. For example, a Colombian Candy Company named Colombina exports to various countries in Latin America. Last year they expanded in Ecuador, Bolivia, the Caribbean and Venezuela. Nevertheless they expanded 78% in Venezuela. This is particularly interesting due to the political difficulties both countries have had during the last 3 years and examining that other Colombian industries such as agricultural industries or cardboard box industries have decreased their sales due to government policies of both countries. This makes you wonder whether it is the proximity or the management and integrated market strategy. Even more, this company managed to increase the sales in United States by 17% having both a language barrier and a geographic barrier, even more they opened sales in Taiwan, United Arab Emirates, Gambia and Morocco, which surpassed the sales of United States in the first year. Therefore, is it really a matter of geographic distance or is it a matter of integrated strategy, good administration and type of market? Wal-Mart might have been affected by the geographic distance but it is not the reason for its success or failure in multiple countries. 2.
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homework # 5 - Reading Questions for Ghemawat, Ch. 2...

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