Wal-Mart is a multinational retailing store chain that is present in more than one country. Since 1999, ASDA’s is fully owned by the owners of Wal-mart and is therefore a chain of Wal-mart in United Kingdom (Asda/Wal-mart, n. d. ). By value Wal-mart is the biggest company by value and owns ASDA, which is the second biggest store in the whole of the United Kingdom after it took over Sainsbury’s in July 2003. ASDA is spread all over England and Scotland with more than 122,000 employees working for it.
As ASDA states that “The story begins with the great entrepreneurial vision and drive of the founding fathers who pioneered the concept of one-stop shopping in the UK” (The ASDA Story – Introduction, n. d. ). Wal-mart has recently in July 2006, pulled itself out from Germany leaving ASDA to be its only European chain. Pulling itself out cost Wal-mart a huge amount of money as “Wal-Mart said it would sell its 85 German stores to the rival supermarket chain Metro and would book a pre-tax loss of about $1 billion (?
536million) on the failed venture” (Hall, Butler & Bawden, 2006). Wal-Mart has done a lot to help the environment as well as “Through Wal-Mart Argentina’s “Eco Action”, children are learning about problems facing their environment and what they can do to help” (Sustainability, n. d. ). Spreading business to more than one country is a very profitable business but requires high expertise and a strong financial backing. United Kingdom and Germany are the two most established markets, which Wal-Mart decided to enter into.
Due to the financial backing and stability of the retail store in America and its developed goodwill over the years made the governments of the two countries to allow the chain to enter and issued a permission notice or license to it. Along with that the flow of Foreign Direct Investment is always good for another country. There are some advantages as well as disadvantages of buying an already established business in foreign land as well as domestically.
The advantages are that the goodwill of the business comes with it along with the lessening of establishing cost. While, the disadvantages are that it is hard for the new company to develop its separate identity and any bad publicity in past has to be faced by the new taken over organization.
ASDA/Wal-Mart. (2004). By Corporate Watch UK. Retrieved on 31st January, 2007 from http://www. corporatewatch. org. uk/? lid=800 Hall, A. , Bawden, T. & Butler, S. (2006).Wal-Mart pulls out of Germany at cost of $1bn. Retrieved on 31st January, 2007 from http://business. timesonline. co. uk/article/0,,13129-2290398,00. html The ASDA Story – Introduction. (n. d. ). Welcome to our All About ASDA Site. Retrieved on 31st January, 2007 from http://asdacares. gpalm. co. uk/the_asda_story/the_asda_story_load. html Sustainability. (n. d. ). Wal-Mart. Retrieved on 31st January, 2007 from http://walmartstores. com/GlobalWMStoresWeb/navigate. do? c