Walmart Model in South Africa - Essay Example

The paper "Walmart Model in South Africa" is a perfect example of a case study on business. Walmart did well in Africa specifically in South Africa. The expansion of business transactions of an organization globally should be vital in the company. Walmart has been active in the expansion of its business premises in other countries such as Germany, India, China, and Japan through its headquarters is in the United States. Surprisingly, Walmart has spread up to Africa specifically in South Africa. Its movement there is still under some activities that generated the issue of the case study. It is not automatic that the implementation of Walmart in South Africa will be a success because there have been various challenges even in other states such as India and Japan (Dunning, 1988). Due to this sensitive issue, the implementation of the Walmart in South Africa should properly go through an analysis by the consideration of the four dimensions of distance between the United States and South Africa in relation with their advantages and disadvantages of Walmart in South Africa using the Electric paradigm as it will be properly analyzed in the article.

Through the four dimensions of distance namely political, geographic, and cultural and the economic factors, the distance between South Africa and the United States was studied. In the first case, the political distance between the United States and South Africa is vital in that they do not operate using the same currency in a region. The United States uses dollars while South Africa uses rand and these have different values (Ghemawat, 2001). Second, the concept of cultural distance that deals with the beliefs of people and the way they interact with each other as well as the deals in the business transactions. The United States is a country that her inhabitants are white who speak English and South Africa’s greatest percentage is the blacks and few whites with their main languages being shaka and Zulu with a combination of English. In South Africa, the main religions are Protestants, Christians while in the United States the Protestants and the Catholics are dominant. A culture is, therefore, an important tool in creating bonds.

The geographic distance between South Africa and the United States is based on size, population, and climate. In terms of size, South Africa covers a greater size than the United States; the climate in the United States has a cooler climate than South Africa, which is generally warm. The population in the United States is very high than in South Africa because the US was developed earlier than South Africa (Ghemawat, 2001). The last factor in relation to the dimensions is the economic distance that is majorly based on the gross domestic product principle. The GDP rate for the US is 3% and 1.8% in South Africa and the unemployment rate in the United States is slightly lower than in South Africa because the US has several employment opportunities.

Advantages and disadvantages of the Walmart model in South Africa using the Eclectic Paradigm model

                   According to this model, advantages arise from the basis of internal expansion, ownership, and location principles. Walmart has a challenge in the internalization concept due to a lack of license to market its products or services. The government of South Africa protects its local organizations from illegal operations such as smuggling of firearms thus an ownership advantage (Robson & Beninger, 2013). 

                   Walmart has an advantage of the location in South Africa because the government is open to the financial system. South Africa has good communication networks thus communication is passed effectively. Walmart has the advantage of having the privilege of competitive efficiency in the business sector. The above information in this article approves the efficient and effective analysis of Walmart in South Africa.