International Economic Environment

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International Economic Environment

International Economic Environment


The purpose of presenting following report is to critically evaluate and compare the implications of the economic environment of each country on the firm's choice of foreign expansion strategy. Therefore, to provide readers a proper understanding the report has been divided into different parts. Initially the report started with a brief overview of the firm, industry context and jurisdiction for the selected countries. Therefore, for the expansion strategy, the country's economic connections with the rest of the world through international trade and FDI are considered and studied closely. Secondly, in the trade relations, the role of country's government is also studied. As the competition in global market increasing with every passing day, therefore, the competitiveness of relevant local and national industries are analyzed with country's economic relations with regional economy. At last, evaluation and jurisdiction of the selected foreign expansion strategies also part of the report.

WalMart in Brazil

In the website of Walmart Brazil there is a curious, at least for a retail company section. Not the typical invitation to "work with us", but an invitation to do the multinational real estate. "If you own land or property where you can install new units of Walmart Brazil, complete the form below," read by visiting the company online.

The fact highlights the insatiable appetite for Walmart to expand its sales area. A decrease in Mexico's desire to discredit exposed since last April, the New York Times revealed the massive use of bribes. These were used to accelerate the purchase and approval of projects requiring the assistance of public officials. The scandal knocked the shares of the company, forced to delay expansion plans in Mexico and Central America. It also prompted a lawsuit against the company by U.S. pension funds, affected the value of their shares. In Brazil the company does not intend to stop, but suffers the effects of the Mexican scandal.

Last year was difficult for the retail giant in its global operations. The damage to his image that caused the Mexican corruption case marking in their operations in the region. Such is the complex scenario facing its second most important market in Latin America: Brazil. With sales of U.S. $ 11,500 million in 2011 in this country, according to the ranking of the Brazilian Association of Supermarkets, Walmart fails to overcome the French Carrefour. The latter had sales of $ 14,000 million last year. This competition is a retail market with 80% of foreign owners. Situation which otherwise promotes the economic growth of this area in Brazil with foreign capital interested in being part of the business (Swoboda & Elsner, 2011, pp. 881-99).

Projections are auspicious for retail South American country. According to consulting firm AT Kearny, in its Global Retail Development Index ranking (GRDI), Brazil is the country with the highest growth in the sector for the second consecutive year, with a 15% increase last year. The country is followed in the ranking by Chile, China, Uruguay and ...
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