Challenges Faced by Walmart in Doing Business in Australia

Running head: ESSAY
INTERNATIONAL BUSINESS
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1ESSAY
Question 1:
Part 1:
Foreign invest and expansion is very essential for a company to survive and develop
in the modern market. However, in Australia, it is not upon looked else just as a procedure,
but there are several ways of guidelines and rules to do business. For example, if a company
chooses to invest in Australia through FDI it has to follow certain trade guidelines which
have been set according to Australia. In this discussion, we have taken Walmart as a MNC
who wishes to do business in Australia. The discussion will investigate and analyse the key
elements of the trade and identify the challenges that Walmart can face while doing business
in Australia.
Walmart is an American retail company which has a dominant presence in the retail
chain industry. The Walmart retail stores detail in several sectors and products which gives it
the opportunity to expand and operate in a number of fields. With its headquarters present in
USA, the Walmart Inc. is one of the largest MNCs in the retail chain sector in the world. It
has a large dominant presence in the world and currently operates in 28 countries. Walmart
has more than 11718 stores all over the world which heralds the dominance in the retail chain
industry. Besides this Walmart, in terms of revenue collection is the world’s largest company
which sums up to approximately US$500 billion. Walmart also has the reputation of being
the largest employer in the world in the private sector with more than 2.3 million employees
all around the world. However, despite its dominant presence all over the world, Walmart
Inc. has not yet ventured into the Australian market. The Australian market still remains open
with its vast potentiality. In 2017, we have seen the entry of Amazon, another retail chain
giant in the Australian market, while possibilities remain for Walmart Inc. to invest in the
Australian market and expand into the vast market.

2ESSAY
However, if Walmart Inc. comes to Australia on the lines of FDI, it has to go through
certain processes, which have been set by the Australian government to review the purpose
and productivity of the FDI. Australian government is open to foreign investments which can
benefit the Australian economy. According to the government, the Australian economy had
been built by foreign investments and it is necessary for large foreign companies to come and
invest in Australia so that the economy sustains its growth and development in the future
(Aph.gov.au 2018).
Firstly, let us look into the internal strengths and weaknesses of Walmart Inc. to do
determine its efficiency to enter into the Australian market. Walmart’s primary strength is its
strong brand image. Walmart is known all over the world for its dominant presence in the
retail chain sector and it has a large and well equipped distribution network which lets it to
cater to a number of people all over the world. Walmart uses advanced technology to
maintain its strong distribution network, which also helps the company to maintain the supply
chain worldwide. Besides the strengths, the primary weakness of Walmart is that though it
has a significant presence worldwide, majority of its market shares come from the US
markets. Hence it can be seen that Walmart needs to expand significantly in other countries
such as Asia or Australia to capture the potential markets and increase its market share.
Walmart should look forward to increase its presence in the Australian market by
following the competitive theories and increase its profitability. Active strategy and
management can help Walmart develop its operational market strategies in Australia.
Australia is an open market which allows investors from all over the world to swarm
in the Australian market to do business. This helps the in the dual benefits both for the
investors in terms of profit and for the Australian economy in terms of economic growth,
employment and income flow. It also helps in the creation of new jobs besides the existing

3ESSAY
jobs and help in the introduction of new and innovative technologies in the country, which
can be later used for the further growth of the market in the future (Armstrong 2015).
However, doing business in Australia requires following several guidelines. Though the
business formalities of the Australian government have been kept flexible by the Australian
government compared to other countries in order to draw a larger number of direct foreign
investors, it is mandatory for the investors to follow the regulations accordingly (Fan et al.
2016). Following these procedures can ensure the clarity of the business operations and the
benefits that the business firm tends to give to the host nation’s economy.
Walmart needs to prepare accordingly to follow these regulations in order to establish
business in Australia. Firstly, Walmart Inc. requires producing an in-depth proposal regarding
its business policies and its plan of operations in Australia. This includes the amount of
investment that is being planned by the company to be invested in Australia, the number of
stores that it plans to open in Australia, the strategic locations it has chosen in Australia and
the benefits that the company has in its mind for the people of Australia (firb.gov.au 2018).
This includes the people who are to be employed by the company and the people whom they
are going to cater to. An overall planning like this can help the company to determine the
benefits that they are going to give Australian economy in its due course of business.
The next part of the proposal submission includes the review by the Australian
government. The duty of the Australian government is to review the proposal submitted by
Walmart in a detailed manner, judging the interests of the people and the economy in the
lines of the case summaries provided by Walmart. The approach by the government is a
flexible one compared to the other nations who require the company to go through several
procedures to present its idea in front of the host government (firb.gov.au 2018). The
approach of the Australian government is such because it believes that hard and fast rules,
and rigid environment prohibits large companies who require flexibility to invest from