Multinational Corporation Expansion Wal-Mart Essay

Pages: 6 (2537 words)  ·  Bibliography Sources: 3  ·  File: .docx  ·  Level: College Junior  ·  Topic: Business

SAMPLE EXCERPT . . .
The flexible monetary system will make the new Wal-Mart store to be opened in Australia to do well, because the value of money will be determined by the market forces. In this case, there will be few incidences where individuals or powerful businesses determined the value of the Australian dollar vs. The American dollar. This form of monetary exchange system provides an advantage where the company will be able to transact its monetary exchange without any exploitation in the market. The flexible system of monetary exchange will allow the money market to be stable making it possible for the business to conduct its transactions effectively.

In addition, the fact that the business will be involved in importation of goods and services from the U.S. To Australia means the stability of the Australian money market matters. In this case, the flexible monetary exchange system has an advantage to the business in conducting its monetary transaction. This advantage is derived from the fact that the business will have a fair play in the market just like other foreign businesses in the market. The flexible systems of monetary exchange create an atmosphere of fairness among all the players of the market. This is of great benefit to the new proposed Wal-Mart in Australia.

Analysis of Australian balance of payments

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Australia is rated as 19th top importer and exporter in the world, and its balance of payment has been a positive one with imports

Essay on Multinational Corporation Expansion; Wal-Mart- to Assignment

The Australian market in the recent past has recorded surpluses, where the amounts of exports have outweighed the imports it makes from other countries. This surplus will have a great positive impact on the new Wal-Mart business that is to begin. The first impact is that the surpluses would create some form of stability in the Australian economy; because the country will have fewer debts with the few countries, it imports its products. The fewer debt liability of the country means that the Government will not heavily tax the businesses including the New Wal-Mart store to be able to pay its debts. The taxation amount affects foreign businesses greatly. Given the less tax burden that will be subjected to the business due to the surpluses, the business will have high chances of boosting its profitability.

This is opposed to the case where the economy was experiencing deficits in the balance of payments. In case Australia had significant deficits in the balance of payment, the Government will accrue huge debts with other countries because of the high volumes of imports. The implication here is that the country will have to depend on the imports as opposed to its own production. The high debt liability of the Government would have pushed the Government to find means of boosting its revenues. This may take the form of high taxation to businesses including the Wal-Mart. This may cause the business not to make good profits or fail to sustain itself in the market.

Analysis of the Australian foreign exchange market

The Australian foreign exchange market plays a critical role in affecting the success of the business. The key foreign market participants include the local Government, the central bank, and the Australian stock exchange market among others. The business operations of the new business market may be impacted by this market because it may affect the financing of the new Wal-Mart store. It may be necessary for the new store to list in Australian stock market in order to supplement its capital base (Campbell, 2007).

In addition, the new business will be subjected to key foreign market participants including the foreign investors, the local stock market, and Government. These participants affect the growth of the business. In this light, the new business will have to depend on some of the assistance offered by these players. For instance, the business may depend on the Government to license it to participate in the local stock exchange market, which may enable the business to make more revenue. The business may also seek possible financing opportunities directly from the Government, from selling shares in the stock exchange market, and from other local investors.

Conclusion

It is evident that this business has a great potential for success in the Australian market. The proposed new Wal-Mart store in Sydney, Australia is likely to experience a great market penetration, because of the friendly market conditions existing in this market. These may include the foreign exchange market dynamics, the globalized economy, the availability of good infrastructure, good relations between the U.S. And Australia, and others. The proposed Wal-Mart business has a higher chance of success in Australian market, because of the market conditions that have been provided. The business has a high likelihood of success, because of the different positive economic aspects in the Australian market (Doole, 2008).

Evidently, the paper has made it clear that the Australian market has provided a good playground for proposed new Wal-Mart store. In this case, the market has a stable economy that provides advantage to the success of the business. The market also has a flexible monetary system, which gives a fair ground to all businesses in the Australia. Thirdly, the market has a positive balance of payment that gives a good advantage of the business, by lowering the tax burden that will be subjected to the business.

References

Bennett, B (2002). International marketing: strategy planning, market entry & implementation. New York: Kogan Page Publishers.

Campbell, (2007). Legal Aspects of Doing Business in Asia and the Pacific 2007. Lulu.com

Doole, L (2008). International marketing strategy: analysis, development and implementation. London: Cengage Learning EMEA.

Frank, T. (2006) "A Brief History of Wal-Mart." The Washington Monthly. Retrieved… [END OF PREVIEW] . . . READ MORE

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