Walmart in UAE 1

Introduction
The world has over time shrunk through the acculturation that has spread a social

cultural, political, economic and technological sharing that has enabled interaction of people over

different geographical locations all over the world. This process whereby regional economies

cultures and societies seam into a global network of trade, transport and communication is what

has come to be known as globalization. In the recent economic age the globalization has been

seen more through the perspective of trade with a focus on the Multinational Companies that

have established their business with no regard for traditional constraints of national borders.

Globalization is however the overall interaction across the world through commerce, political

interaction as well as cultural sharing between people and the distinctions can only be drawn in

the context where it is applied.

Globalization has generally received mixed reactions in the world over. Some proponents

have praised the integration and its contribution to leveling the economic world, creating positive

contribution as well as bolstering advancement in science and technology. With enhanced

communication and more cultural appreciation, the world has been drawn to harmony and

conscious of plight and opportunity in the world over. Cynics on the other hand have been

skeptic of the edification of globalization. Saskia Sassen describes globalization as the processes

through which what was formerly seen as national is denationalized. This is pointed out

frequently with the leery of globalization as a justification of subtly alleviating the nation states

as we know them today. Several critics have also pointed out to the disparities and unfair

competition that cripples local firms at the expense of multinational companies. They call for

protection of local industry but maintaining globalization enabling them to access foreign

technologies and favorable terms in the market (Amsden, 1989).

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Walmart
Walmart was founded in 1962 by Sam Walton who saw it grow and get incorporated in

1969 and by 1972 it was able to trade in the New York Stocks exchange. Walmart has grown

into one of the worlds largest discount department stores that in 2010 Forbes Global 2000 named

it the worlds largest Public Corporation by revenue. Walmart has ventured to install its china

shops all over the world being extremely successful in the United Kingdom and South America

but had to pull out of South Korea and Germany due to losses. It has in effect established a

renowned reputation as a leading multinational corporation.

International Business Environment

Globalization in trade has opened up opportunities as well as offered challenges to

corporations in the world over. With the rush for a wider customer base having been provided

and untapped economies, the major world corporations have poured to the international scene to

take advantage of the open markets and enjoy the benefits of globalization. Walmart is one such

firm which has established its large chains of retailer shops across the globe and has through time

grown continuously to establish its position as a major economic firm in the worldwide

international market.

Globalization avails a lot of benefits to corporations that venture across borders in order

to establish their businesses. The international trade opens up new markets which boost company

sales and increase the business profits and asset base. International trade also helps corporation’s

access technological advancement that is available in the world. The decentralized nature of

technological innovations that has seen individuals from all over the world invent various

technological breakthroughs, corporations which are found all over the world are better placed to

consume the newly developed technologies. Globalization require firms to increase in the asset
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base and build big brands which in the effect will build a big name for the company which will

be viewed as reputable and thus raise its position in the market.

This however does not come without challenges as the corporation ought to understand

the new markets and diversify its products while remaining sensitive to the intricate needs of its

customers. It is also risky especially in unresponsive markets which might make the business fail

to prove viable. Some countries which have not whole heartedly accepted the push for a global

market still pose obstacles in subtle embargos and tariffs that are bent on discouraging

globalization.

Walmart in UAE, the Vision & Mission

Walmart in establishing a business in UAE has to recognize the factors of international

business environment to maximize on the benefits of globalization and reduce on the negative

implications of the global market on the business. The need to understand the political situation

of the country in which one wishes to establish a business is very important. This is because the

political setting of the host country will reflect in the business pursuit for licensing and the

policies with which the business should align itself to avoid conflict with the host country laws.

The political set up should be conducive and ensure stability to warrant the establishment

of business in the country. UAE is at the centre of a very volatile region; the Middle East, but

due to its historical situation it is less prone to the instability that has characterized the region

offering good business environment politically

When establishing international business in UAE, Walmart has to understand the trade

requirements of the global market and the viability of setting up the business. Walmart ought to

ask itself, is the country conducive for trade? This is established in considering the government

policies which regulate trade in the country and if they encourage global enterprise or try to
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inhibit it. The level of competition in the country’s market should also be considered as a factor

in determining the nature of the business environment in countries of global markets. Thus in

understanding the trade situation of the international trade a corporation is able to determine

where it intends to set up businesses of its strategic networks. UAE is a fertile ground for trade

with many renowned corporations investing in businesses there. It maintains healthy competition

and a highly popular market attracting businesses all over the world.

A corporation ought to understand its financial situation and the market financial might in

order to determine whether they would consider entering the market. The flow of money

demonstrates the justification of setting up the business as it can be used to foretell the viability

of setting up a business since the money in the market demonstrates the economic situation of the

host country in which a business desires to establish a chain. The organization should also asses

on its own finances Vis a Vis the market financial capabilities to determine if it would be

advisable for the business investment in the global market which requires a larger financial base.

Walmart is a very large corporate body with the financial might that is capable of establishing

chains abroad in the global market. UAE on the other hand is one of Arabs fastest growing

economies with an enviable financial basis which makes it idealistically viable to invest in the

global market hosted by UAE.

A very important aspect of international trade which develops the ability of the business

flourishing in the environment of the host country is culture. The cultural setup of the people

who will be around the business has to be put into consideration to show the sensitivity of the

business towards the orientation of the customers who ought to see the businesses ability to

relate to their values and embody their culture in its outlook. The business must ensure it is not

offensive to the local environment and strive to associate with the way of living around where it
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is established. Walmart has thus the need to understand the cultural way of life of the Arab

community in UAE. This is especially important as the natives of the Emirates are very cultured

people with great regard for religion and social cultural set up but very accommodating to

foreign cultures which has enhanced its image as a business heaven for investors. Walmart which

is American has to consider the cultural difference and show sensitivity to the people of UAE for

instance ensuring they avail Halal meat which excludes pork will augur well to the large Muslim

community as well as demonstrating their commitment in reduction of environmental pollution

which will build its image as an environmentally conscious corporation.

Companies can be impacted by these external business environment features especially in

determining the decisions and policy formulation as well as establishment of the business. They

are factors that have to be put into consideration along internal factors because they have a

bearing on the corporation’s ability to do business and will determine the profitability of the

corporation in the international market. For instance, the politics of the region in which the

business is situated will determine if the business is operating lawfully under a conducive

environment or it is faced with the challenge of instability or corrupt government officials which

slow investment. Alternatively the cultural setup of the community where the business is situated

will determine the type of products as well as mode of trade, advertisement and employee

recruitment and relations policies.

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Challenges of the New Markets

When establishing businesses in the international scene it becomes very challenging to

ensure the business picks up in the new market which is politically, financially and culturally

different from the normal scenario one the business is accustomed to. The corporation’s ability to

tackle the challenges and set up mechanisms to offset the obstacles posed demonstrates the

business sound management and effective policy making strategies that ensure it not only

sustains itself in the new niche but also develops into a profit making venture.

A new market always poses a challenge for new corporations in the international trade

due to the fact that there are probably already established businesses of a similar nature. The new

business must ensure it does not establish its premises or business in country that is oversaturated

with the type of goods and services it intends to offer. This because the established firms are

already used to the market; its booms and lows and can survive all situations while the new

corporation which is unfamiliar with the market and the business cycle are in the danger of being

squeezed out of the market. Carrefour and Cooperative Societies are established and strategically

positioned in the Emirates which will make it difficult for Walmart to pervade the market. These

are locally owned traditional businesses that are very conservative and sensitive to the market.

They are very popular among the people of UAE and have a great amount of customer loyalty.

Thus competitors pose one of the major challenges for the business as the business has to

overturn the advantage gained by its competitor’s overtime. A business corporation can

overcome the challenge by being patient and demonstrating its abilities so as to eclipse time as a

factor and prove too potent enough to handle the customer needs.

Unfamiliarity with the customer base is also critical as the business seeks to make an

impression and attract new customers because the business can make a wrong move that might
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not augur well with the customers thus cost the business the initial image it sought to create. The

unfamiliarity with the customer makes it hard to predict their reception of the business and thus

poses a serious threat that as to whether the business will pick up or even slow the reception

towards the business. The challenge can be resolved by carrying out an extensive market

research. The business should invest in research and understanding the customers as well as the

market trends to help the corporation develop strategic plans that will enable the business

establishes itself in the market.

Unfamiliarity with anew market will force the business to incur several costs which will

bear upon the initial business profits. This is in an effort to understand the customers, the

business will be forced to do a market research and extensive advertisement in order to create

awareness of the goods and services the business offered and in an effort to show how different

the company is from the available businesses. The cost of the extensive market research and

advertisements as the corporation seeks to acquire its position in a market pose a challenge to the

setting up of a business. The business can overcome the challenge however by focusing on the

eventual advantages of the investment in information and the gradual customer base it aims to

achieve which justify the costs by rewarding the business with a good customer base.

A new business environment for multinational corporations is very challenging due to the

difficulty in establishing the response of the market to the image of the corporations. While some

will welcome multinational corporations appreciating the significance of the international trade

others will shun or even discourage the consumption of goods from the multinational companies.

Government policies of the host countries can either encourage the business or prove an obstacle

to the soft establishment of the business. Other countries are protective of their own industries

and corporations and in an effort to do so, design mechanisms that inhibit the flourishing of the
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multinational companies in their markets. A corporation seeking to work in such an environment

ought to negotiate with the government trade faculty to address mechanism in government

policies that impact negatively to the business and stress through actions, the importance of

direct business investment in the economy of the host country

Breaking new ground can also be difficult due to customer suspicion of the origin of the

corporation and the prejudices of the people toward the country of its origin will shape their

perceptions and opinions of the business and its brands. The business may also be hampered by

customer loyalty which might pit the business at a disadvantage over its competitors. This

challenge can be overcame through demonstrating that the business is genuine and desires to

gratify the customer thus shattering the suspicion and negative orientation towards its brand. This

for instance can be noted in the Anti-American sentiments that are prevalent in the Middle East

which might drive most people to view any corporation from America as an image of their

enemy and give the corporation negative response. Thus a corporation like Walmart has to build

an image for itself in the region that would shatter such myth and demonstrate its desire to bring

goods and services to the people.

Human Resources Role

Challenges posed by new markets can be effectively tackled by the business arms that are

geared toward establishing a good business image and relations between the business, its

employees, the customers and shareholders. The business ought to create and maintain a good

relationship with the key players in the business environment who affect the running of the

business. This is achievable by running a competent and effective Human Resource team that

will help sell the image and brands of the corporation to the people and establish an

understanding with the government, competitors and shareholders.

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The human resource is very important as it helps solve issues with customers and shows

the business responsiveness to the market in which it is established. It links the customers and

other external factors with the business strategy development organs and logistics thus aiding the

business in making viable strategic decisions that will see the business establish itself as a force

in the market and take up the challenges changing them to strengths and achieving in new

markets.

Strategic Decisions
When a business is set up in an environment having considered the several factors that

will influence its survival on the market, a good business is called upon to make strategic

decisions in which vision of the market trends have to be addressed in order for the business to

handle any eventuality during its existence. Strategic decisions are the decisions by a corporation

in consideration of market trends and based on experience designed to orient the business to its

internal and external environment establishing a fluidity that would see it achieve the best results

possible in the business ecosystem. Therefore a business ought to develop strategic policies by

making sure that they recruit a potent strategic management team of visionary leadership and

especially those who best understand the market within which the business is situated. Walmart

ought to incorporate UAE natives in management positions as they understand best the nature of

the UAE market and will come in handy during the development of a working strategy.

The nature of a good strategic decision will entirely rely on the ability of the Walmart

store to fit into the business niche of the UAE market. By realizing the trends and behavior of

their competitors the organization is able to make viable decisions. The company ought to asses

the market trends and the strategy of its fellow players in tackling the various challenges. This
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however should not be the blueprint for designing their own responses to similar problems but

should be used as a reference in developing an even better way of tackling industry issues.

Walmart has also the need to understand the nature of the market especially the

customers in an effort to formulate working policies in the UAE market if it seeks to successfully

design a working strategic planning. By this I mean the organization has to understand and

appreciate the culture and customs of the customers it intends to serve. In this case local

strategists come in handy as well as research and observation. The organization has to make

policies that are consistent with the culture and traditions of its customers in an effort to reflect

their values in its image. For instance Walmart cannot in making a policy on advertisement use

skimpy dressed women or the blondes it uses in the local outlets in America. This is because the

UAE version of women is conservatively traditional and in order not to draw disdain the

corporation ought to use decently dressed women to sell their appliances.

Customs and cultural ideals of the community in which the business intends to operate

are very important and this should be seen in the nature of the business policy having been put

into consideration in the formulation of strategic decisions. The plans to align the business to the

market trends have to demonstrate the concern and respect for the customs and culture of its

customers so as to develop the ideal image intended by the business.

The nature of the strategic policy should also implicitly embody the feasibility of the

organization to the policies created. A good strategic management plan should incorporate

creativity and innovation with the capacity of the business to deliver on the planned out strategy.

The strategic management team has to consider the financial resources, structural resources and

human resources available to the business to successfully implement the strategic plan. The
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decisions therefore in being consistent with the organizations capacity elicit its nature of

considering the feasibility of the firm to carry out the strategic plan.

The strategic policies ought to consider government policy and the decisions nature

should indicate adherence to the law of the land. Walmart ought to make strategic planning in

UAE with consideration of the government’s policy on foreign investment so as not to come into

friction with the government of UAE. The strategic decisions have to show respect for the

government policies in order to establish a good business relation with the political class of the

society in which it is operating in. The good relationship once fostered will ensure the smooth

running of the business in the host country and formulation of favorable policies to the business

which will bolster its performance in the international market.

The strategic decisions most importantly should be as accurate as possible in forecasting

the market trends and thus orient the business to any changes that might happen to the market as

time goes by. This is through use of modern means of simulation including current technology as

well as qualified strategic managers with an eye for both the latent and manifest market

situations and their predictive significance in development of viable strategic decisions and

planning.

Thus on their basis the strategic policies can be developed through critical thinking for

problem solving solutions in the new market. The policies can then be evaluated with the case

scenario and those which are seen to be working presented to the managerial board for approval.

These are then handed down to the workforce for implementation harnessing the various

strategic networks and wringing out the potential of the workforce in making possible the

realization of the intentions of the market strategy

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Conclusion
International businesses are very complex in that there are no out rightly outlined

solutions for their problems because the situations are more or less exclusive to the business and

the host country. The business solutions therefore are favorably developed on the grassroots

which will reflect inborn solutions to inborn problems by the business. The international trade

requires sharp and critical thought which can drive the corporations to a profit making business

in whichever locality it is situated.

The international trade which is growing by the day in world popularity is not an easy

task as it involves several and systemic simulations to establish initiate and run as its cases are

mutually exclusive and different from the parent company. It requires creative planning and

subtlety in handling competition as well as sound policy based on research to strategically plan

for the success of the corporation. Walmart has a great chance in establishing a store in UAE due

to its flexibility to international business. The market is overwhelmingly financially capable to

sustain a new corporation and the laws for investment are friendly.

Walmart can start and run a very competitive business if it is able to commit an initiative

to explore the local business environment and appear sensitive to local traditions and customs in

order to compete with the more conservative businesses like Carrefour and Cooperative

Societies. Its ability to flourish in the market will heavily rely on the research it caries on market

response and the image it will cultivate for itself.

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