Abstract
WalMart is thinking of implanting itself on a new continent: Africa. On November 29th, Wal-Mart offered $2.4bn for a majority stake (Simon Mundy, 2010) to the South African retailer Massmart. We are going to assess the potential entry of Wal-Mart in South Africa through Porter's five forces and other relevant forces (legal, social, deregulation and globalization).
Ubiquitous in the United States, Wal-Mart 's sales are still increasing but less than expected. Sales growth in 2010 has been limited to 2.8%, to reach $103 billion, instead of the $105.4 billion expected by the market (Julien Pompey, 2010). The company's growth is now boosted by other markets like Mexico or China. To improve its economic situation on a mature market like the US, Wal-Mart is adapting to new trends by increasing the number of small convenience stores in cities or in suburban areas (Jonathan Birchall, 2010).The company is also looking abroad in emerging markets like Africa. Andy Bond, a Wal-Mart executive said that "South Africa presents a compelling growth opportunity and offers a platform for growth and expansion in other African countries" (Stephanie Clifford, 2010).
However, Wal-Mart has to be careful with its overseas operations. Its failure in Germany showed the limits of the "walmartisation". In eight years of presence in Germany, Wal-Mart lost $1 billion (Mark Landler, 2006); the world's largest retailer wasn't able to adapt to the German culture and cope with a very competitive market, especially coming from the hard-discounters.
