Walmart (South Africa)

ISSUE Identification

Over the last decade the successful monopoly of business known as Walmart have expanded to the country of South Africa. The biggest issue for the country of South Africa is unemployment. Currently the country of Africa has the highest employment out of all the countries. This case study will be about Walmart increasing their precense in South Africa to have impact on employment. The unemployment rate in Africa’s most-industrialized economy has been above 20% for at least two decades, even though output expanded by 5% or more a year in the early 2000s (Naidoo 2021). With the country having an high unemployment rate, it slows down the short term and long term growth for the country economically. They are numerous of negative effects of having a high unemployment rate have on a country. High rates of long-term unemployment can devastate local communities, as reduced lifetime income prospects induce a variety of behavioral changes, and alter social networks (Nichols, Mitchell, Linder 2013).

Company’s Overview

In Walmart’s mission statement it stated, “helping people worldwide save money and live better – anytime and anywhere – in retail stores and through e-commerce.” Walmart Inc. is owned by fifty percent by the Walton family. Established in 1962 and headquartered in Bentonville, Arkansas, Walmart is the largest retailer in the world . It serves nearly 260 million customers worldwide in over 11,500 stores supported by 158 distribution centers. Walmart is also the world’s largest company in terms of revenues, earning $482.1 billion in 2016 It has been he largest company in terms of revenues ten times since 1995(Rothermal 2019) Walmart employs 2.2 million associates worldwide–1.5 million in the U.S. alone. The current leadership team at Walmart consists of Greg Penner as Chairperson, and Doug McMillon as President and CEO. Other notable executives include Greg Foran and David Cheesewright as Presidents and CEOs of Walmart U.S. and Walmart International, respectively. (Rothermal 2019). Everyone mentioned all have the possibility to have a impact on the issue in Africa. With David Cheesewright being the CEO of Walmart International he is more likely to have a direct impact and will be considered the protagonist in this case study.

Country’s Background

The country of the South Africa is located at the bottom of the continent of Africa. South Africa have three cities they considered their capital. They are Cape Town, Bloemfontein and Pretoria. This is the 23rd most populated nation with a population of 59 million. Walmart as a business does have some ties to South Africa. They are also worried that Walmart’s entry would displace local producers and increase imports, which would threaten the stability of local economies.  The unemployment rate is at all time high with 34.4. Karombo. According to government data, the unemployment rate in South Africa hit a record high of 7.8% in the second quarter of this year. It is the highest level since 2008. he unemployment rate for black women is 41%, which is the highest among all African groups. The unemployment rate for young people between 15 and 24 is 64.4%. The sustained economic disruption caused by the Covid-19 crisis, as well as the various policies and measures introduced by the government, have all contributed to the weak numbers.

General Issue Analysis

Despite the robust growth prospects in the African market, Walmart is still faced with many challenges in its expansion when it comes to expanding in the country of Africa. One of these is the lack of infrastructure in many African countries. Poor infrastructure continues to hinder economic growth in sub-Saharan Africa (Holtz & Heltzig 2021).. Another challenge Walmart may face is inflation. Inflation cut into the buying power of middle-class consumers. The biggest problem Wal-Mart faces is the fact that everything has to be imported, and building a supply chain that spans African countries adds to all the challenges above. A crowded land registration unpredictable changes in local law, and landowners waiting for a jackpot are just a few of the barriers to doing business. Then if you add on the corruption from the government, expanding Walmart stores to increase the employment rate has the potential to be a disaster.

Action Plans

To the outside world seeing the country struggle always been a lingering question and mystery. South Africa is one of the African countries that is endowed with a lot of resources, both human and minerals. When it comes overcoming the challenge of infrastructure, Walmart have some possible solutions. A system for good governance is very important for improving the quality of infrastructure. Long-term strategic land acquisition, based on the prior identification of strategic land corridors in cities and regions, accelerates project implementation by avoiding delays caused by property disputes. This is going to be an uphill battle because just in 2020, The secretary general of the governing African National Congress faces 21 charges including kickbacks and fraud. This potentially put some doubt in how much they are willing to help assist the infrastructure of the country, Walmart could look at the assistance as more as long term investment. The first strategic would be Walmart assisting in funding South Africa poor infrastructure. When it comes to the solution for making transporting goods simpler is finding the most convenient way to transport the goods. There are four main modes of transportation: sea, air, road and rail. The type of transportation you choose depends on factors such as type, urgency, distance and total cost. Rather the goods come from China or America, the option of flying will be the most convenient for the amount of cargo and for time purposes.

Work Cited Page

Kriek, David. Examining the Entry of Walmart into South Africa: A … https://repository.up.ac.za/bitstream/handle/2263/45155/Bonakele_Examining_2014.pdf.

Souza, Kim. “Walmart’s 7-Year Gamble in Africa Slowly Paying Off.” Talk Business & Politics.

Rothermal, Frank. “Walmart.” McGraw Hill Education, 2017.

South Africa Climate Facts | the Weather and Climate in … https://www.microlinkinc.com/search/south-africa-climate-facts.

Holtz, Leo, and Chris Heitzig. “Figures of the Week: Africa’s Infrastructure Paradox.” Brookings, Brookings, 24 Feb. 2021, https://www.brookings.edu/blog/africa-in-focus/2021/02/24/figures-of-the-week-africas-infrastructure-paradox/.

US, FashionNetwork.com. “Walmart’s Massmart to Open 20 Stores in Pan-African Expansion.” FashionNetwork.com, https://us.fashionnetwork.com/news/Walmart-s-massmart-to-open-20-stores-in-pan-african-expansion,962180.html.

https://www.nytimes.com/2020/11/13/world/africa/anc-corruption-south-africa.html

“World Bank Group – International Development, Poverty, & Sustainability.” World Bank, https://www.worldbank.org/en/home.

https://www.walmart.com

https://blog.barloworld-logistics.com/importing-into-south-africa-getting-started

BA 563 Final Assignment: Case Project Review and Feedback: Instructions: Select one of the peer case study projects posted to Blackboard and complete the three parts as noted below. Use the title of the case study you choose as the name of your submission.

Part 1: Grading Rubric (8 pts): Use the rubric below to critique the case study using the four dimensions of the rubric. Give and grade (A, B, etc.) and include a one or two sentence comment/justification for each grade you give.

	Grade and Comment	Rubric Grades
Identification of Global Business Problem		(A) Case issue is clearly defined and supported via background information. (B or C) Case issue is presented but is weakly supported by outside sources. (D or F) Issue not clearly defined in the presentation.
Company selection and relevance to Global business Problem		(A) Related to the above. The link between this organization and the major issue is apparent and logically consistent (B or C) The link between the organization and the issue is not obvious and requires additional explanation. (D or F) There is a very tenuous relationship between the issue and the company example.
Quality of Supporting Information		(A) Recent, specific, company, industry and country information used to present the problem and support the relation to the case study. A variety of references are included. (B or C)Very general information provided for the most part. Lightly referenced. (D or F) Outside information is overly general and/or not recent and relevant. References are missing or extremely limited.
Presentation of Future Solution and Outcomes		(A) At least two, discrete strategic options are presented that are consistent with the facts presented and that address the central issue/problem. (B or C) At least option is given that addresses the major issue/problem. Additional options are not given or are not reasonable ways of addressing the issue. (D or F) The options are not clearly presented, are missing, or fail to provide reasonable alternatives to the problem solution.

Part 2: Solution (4 points): Using only the information presented in the case study, write a one paragraph solution to the issues presented in the case by choosing one of the strategic options presented and explaining why this option is the best option given your understanding of the case.

Part 3: Suggestions for Improvement (3 points): Based on your overall impression of the case study, provide at least three specific suggestions as to how the case study could be improved.