Strategic responses expected from retail organisations due to the acquisition of MassMart by Wal-Mart
Date
2013-10-08
Authors
Campbell, Graeme
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
South Africa is classified as an emerging economy and emerging economies are
perceived as being less risky than established first world economies in the current
economic climate. This perceived low risk results in emerging economies
attracting global organisations that are wishing to capitalise on this growing
economy. Additionally many of these emerging markets have a large population
base that have limited income, but the sheer size of this market makes it very
attractive for organisations that wish to leverage economies of scale.
As strategy deals with the future and the future is unknown, strategic planning and
reaction time is critical in the current fast moving world of retail. This research
report will investigate the strategic alternatives retail organisations will pursue
based on the emergence of a new large international competitor in the market
place, namely Wal-Mart. The strategic alternatives investigated are high level and
revolve around choosing to react or wait for the uncertainty to disappear, how the
chosen entry method affected their strategy and what resources will be deployed
to overcome this new competitor. As the chosen entry method of Wal-Mart
allowed the organisation to overcome the barriers to entry all the retailers
investigated chose to react immediately and adopt a focused type of strategy,
deploying their resources in carefully selected area’s to combat the strengths of
the new competitor. Restructuring took place, supplier power increased and new
resources were acquired. The local retailers acknowledged the greatest threat of
Wal-Mart lay not in South Africa but on the rest of the African continent and this
was where their primary focus would be. The study utilised qualitative research
methods which involved semi structured interviews
Description
MBA thesis
Keywords
Retail organisations