Walmarts Expansion into Egypt: Navigating Political, Cultural, and Economic Challenges

Abstract

Walmart in Egypt [Name] [University] BUS621 Instructor’s Name 7/3/23 Walmart is an American International retail corporation with the majority of the shareholding being the Walton family. The company through innovation enables its customers to shop in its stores and online. It is the world’s biggest retailer aimed at the elimination of poverty and selling its services at low costs. Walmart strives to expand internationally to gain a competitive advantage. It has announced its plan to expand its services in Egypt, a country in the northeast of Africa. Egypt boasts a population of 118. 8 million as of January 2023 (Digital 2023: Egypt, n.d). To ensure that the expansion is successful Walmart must study Egypt’s political, cultural, and economic environments. Egypt describes itself as a republic with a semi-presidential system of governance comprising the president and the prime minister. Egypt experienced political instability after the 2011 revolution but the environment has since changed under the leadership of President Abdel Fattah El-Sisi who ascended to power in 2014 to bring development and a conducive environment for investors. Walmart has a high chance of investing in the politically stable environment now and it is up to them to comply with the government and the existing laws and regulations. Egyptians have an intense and rich culture characterized by family values, communalism, and hospitality. The Muslim religion occupies a high percentage in the country and is conservative about their religion. Walmart’s entry into the country may be culturally sensitive, especially on dress code, religion, and the range of products and services they offer. Walmart should cherish the conservative and reserved Egyptian way of life to enter the market. Walmart just like any other organization is affected by economic stability. Egypt is the largest economy in the Middle East and North Africa which makes it viable for Walmart’s expansion. It has a vibrant youth with high unemployment rates. Walmart’s expansion will be an opportunity to eradicate poverty and contribute to the economy of Egypt. Inequality exists between the rich and the poor. Walmart is a price-sensitive company and investing in Egypt is a way of promoting the living standards of its people and increasing purchasing power. The Egyptian market is stringent to enter and hence an unfamiliar market. Walmart can enter Egypt through Joint ventures or local partnerships. Egypt lies in the field of difficult-to-enter markets. Having local partners makes it easier for Walmart to penetrate foreign markets. When entering an unfamiliar market, it is essential to partner with local partners to cover inherent risks of competition, unfamiliarity, and understanding consumer behavior (Keegan & Green). Egypt operates with communalism and joint ventures will enable Walmart to build relationships with governments and stakeholders and meet the local market at its needs. Through a joint venture, Walmart will not outsource resources such as supplies and distribution services. Local partners will help the company navigate and thrive in the underlying market conditions. Bureaucracy affects most foreign investors and local partnerships through joint ventures will break the hurdles of bureaucracy in Egypt. Place utility is delivering products where they are needed at. Walmart has a wide variety of products and ought to ensure all its products and services are conveniently placed in Egypt strategically for instance in major cities such as Cairo. Time utility is created when a service is offered when needed. For instance, Egypt celebrates Ramadhan, and offering services suitable for their occasion gives Walmart a household name. it depicts Just in Time Supply management. Form Utility is making a product more useful by changing its form for instance selling canned food...