Wal – Mart Is a Usa Based Multinational Corporation. Critically Discuss the Likely Cost and Benefits of Its Takeover of Asda, a Uk Based Company.

Wal – Mart is a USA based multinational corporation. Critically discuss the likely cost and benefits of its takeover of Asda, a UK based company.

  “Multinational corporation is a business that either owns or controls foreign subsidiaries in more than one country” (Resource book 2, p. 44). There are thousands of multinational corporations (MNC) in the world. The biggest ones have a huge impact and importance to the global economy. About one – third of global production is controlled by 200 of the largest MNC’s. Some of them are exceeding bigger turnovers than some of the countries GDP’s. The most common motives for companies to go multinational are: reduction of costs, growth, possibility of spreading its fixed costs and exploiting economies of scale. When business expands to other countries, it can create its own subsidiaries or it may share the ownership. Governments of some of the countries insist on owning or controlling a share in new enterprise, what can leave sometimes MNC with minority stakes of the new business. Other difficulties, when moving overseas that MNC can face, are operating in new and unfamiliar environment, coordination of subsidiaries in different parts of the world and   cross - cultural issues. When companies become multinational it can expand through creating new units or by merging or taking over existing business.
  Wal – Mart is one of the biggest multinational corporations in the world. It is hard to believe, that it is origins are only in 1962 and it all has started with one, small, self – service   shop in Bentonville, Arkansas, run by Sam Walton. Sam Walton has pioneered the concept of self – service and central billing system. His marketing strategy has been focusing on “Everyday low prices” (EDLP) and one stop family shopping. He has established three core organisational values: “respect for the individual, service to our customers, strive for excellence” (The case of study). Expansion of Wal – Mart has started in 1980’s with...