Introduction

In this assignment I would be analysing and would carry out a comparative research into public policy of mainly of four countries where Wal-Mart, a multinational company has gone and started business. Though the company Wal-Mart was started by Sam Walton in 1962, it has expanded rapidly over the years and has been transformed into a blue chip public listed company. As a result, the individualistic aspect of international entrepreneurship of Wal-Mart has diminished and it has taken form of a net work of companies at present. Therefore I would be analysing the company, Wal-Mart at large and its business entry strategies into different international markets. Undertaking this challenge, I would discuss the public policies of Mexico, United Kingdom, Japan and Canada in support of the Wal-Mart and its entry strategies to the particular country. In the second part, I would critically evaluate and analyse what was detailed briefly in the first part against two countries such as South Korea and Germany where Wal-Mart has pulled out from business.

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Section 1

What is entrepreneurship?
According to historical analysis of business definitions, the meaning of entrepreneurship have evolved into a complex phenomenon from the ealier version of mearly starting a business. In the 20th century, the definition of international entrepreneurship is highly complex and creates a further subtlety. Famous economist Peter Drucker says, An entrepreneur searches for change, responds to it
and exploits opportunities. Innovation is a specific tool of an entrepreneur hence an effective entrepreneur converts a source into a resource. (Drucker, P.F. 1985)

Sam Walton & Wal-Mart

In this assignment, I would be analysing how the public policies of 4 diffrent countires have affected the internationalional entrepreneurship of Sam Walton who started Walmart in 1962. After the second world war, Sam Walton has started this retail shop and by 2012 it has turned into a multibillion retail business and ranked by Forbes Global 2000 as the 16th largest public corporation. In addition Wal-mart started its international operations in 1991 and operates in 26 countires today. In this analysis I would be focussing on public policies of 4 four countries where Wal-mart has esteblished and 2 countries where it has pulled out from business. (Wal-Mart. 2012)

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Mexico
Wal-mart intered Mexico in 1991 and has a total of 2147 retail units by 2012 with a turnover of 27.2 billion US dollars.This is one of Wal-Marts earliest foreign ventures which has proved highly successful. It operates as Walmex and started the company as a joint venture with Cifra and in 2006 received the license from Mexicos finance ministry to operate as a bank as well. (Wal-Mart. 2012) This is a public listed company and has been trading since 1977.The company, Cifra was founded in 1958 by a wealthy Mexicon, Jeronimo Arango and by 1997 Wal-mart had acquired almost 51% of Cifra stocks and named the company as Wal-Mart de Mexico. By 2000 April Walmart increased its stake in Wal-Mart de Mexico to 60%. According to Wal-mart one fifth of the Walmart stores are in Mexico and it is the biggest retail company in Latin America. (Wal-Mart. 2012) When we analyse the time that Wal-Mart entered Mexico, we see there are certain reasons why Wal-Mart eyed this Latin American Country in 1991. We have seen the big multinational companies are always interested in foreign or other domestic companies for two reasons. That is either when the company is performing well or when a company is bankrupt and ready for sale for a very little amount of money. In this both scenarios, the big companies are ready to exploit the situation. In the case of Wal-Mart de Mexico, the Mexican joint venture Cifra was making real profits and was expanding rapidly prior to the joint venture with Wal-Mart. In 1990 Cifra's sales grew by 26 percent, and between 1990 and 1991 its stock shot up almost
fivefold. At the end of 1991 there were 38 Almacenes Aurrera self-service department stores, selling general merchandise, clothing, and supermarket items. The high-income Superama chain consisted of 34 freestanding community supermarkets. (Wal-Mart de Mexico, S.A de C.V History, 2001.)

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In addition the public policy in Mexico too changed immensely introducing economic liberalisation policies to attract new businesses during this period. Deregulating the economy took a prominent place and helped the private companies to expand with the intention of solving the ever growing problem of unemployment in 1980s. Since the peso, the official currency of Mexico collapsed in 1982, due to the huge amount of foreign debts, the government was looking for foreign money coming to the country through new foreign ventures. In addition the agreements such as FTA (Free Trade Agreements) and NAFTA created a refined policy framework which created a strong business environment between three countries in the region. Therefore it is evident, that the decade prior to the joint venture of Wal-Mart de Mexico, there were many economic reasons and policies of the Mexican government that fuelled the joint venture. (Faal, E., 2005) In addition the Wal-Mart strategy as a discount retailer has proved successful in this developing country compared to the mistakes it did, for an example in Germany, applying an unmodified US success formula. (Knorr, A and Arndt, A. 2003)

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United Kingdom
Asda became a subsidiary of Wal-Mart in 1999 for a sum of 6.7bn and as of today boasts of having 523 retail units with a17.1% of the UK grocery market share in 2009. Asda is the second largest retailer in Britain next only to Tesco. The retailer is recognised to be the lowest price supermarket, a position that other retailers such as Aldi have rejected.Asda Stores Ltd was founded in 1949 in Leads and the ownership and the management have gone through many changes over the time. Before and after the take over of Wal-Mart , Asda has acquired many UK retailer units such as Gateway Superstores in 1989, 12 Safeway stores from Morrisons in 2005, Dunnes in 2008, Netto in 2010 and 6 stores from Focus DIY in 2011. (United Kingdom, 2012) As we analyse why, Wal-Mart bought Asda, it is interesting to see how the prevailing economic conditions in 1990s and subsequent government policies have influenced the American retailer to get interested in the UK retailer market. The recession in 1980s in UK created numerous issues under the government of Margaret Thatcher and paved the way for monetarist policies to reduce inflation and public spending by the end of her rule. Unemployment hit a record level of 3 million for the first time after 1930s recession in UK. Though there was an economic boom in 1986 period, by 1990s the signs of recession were creeping in and 1997 the labour government of Tony Blair changed the economic policies independent of the political influence for an example specially by giving powers to the Bank of England to set interest rates. This decrease of red tape or the bureaucracy of the government gave new hope to the economy. The labour government started number of initiatives to attract foreign investment and to start business by reducing the corporate tax through the budget of then chancellor Gordon Brown in 1997. The ultimate goal was to create jobs and start businesses that would finance that would finance the government in the long run. This is the back drop where Walmart set foot in UK in 1999. (Jackson, J. 2011)

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Japan
The Japanese subsidiary of Walmart is Seiyu and was established in 1946 merging Seibu Department stores and Seibu Railway. In 2002 Walmart bought 37% of the Seiyu and in 2005 acquired majority stake increasing to 95% ownership and in 2008 to 100%. As of today, it has 427 retail units making Seiku a large supermarket chain in Japan.Its position as a large retailer has moved from 5th in 2002 to the 2nd in 2012.(Rowley,I. 2005)

The Wal-Mart entry into Japan occurred at a time when Japan was desperately looking for foreign direct investment to compete and to sustain its reputation as a global leader in business. The continued recession from early 1990s to 2000 and the bear market syndrome (where a general decline of the share market was seen) fuelled and more or less forced the Japanese government to get the economy moving vigorously. The banks were made to lend, reducing the interest rates to start businesses. Policies were made in government agencies after 2000 to attract new foreign businesses with new ideas and business models paving the way for competition and to stimulate the economy. (Gaijin at the Gates, 2007) In addition the government has taken an interesting policy decisions in changing the attitudes of people towards foreign goods and services in view of attracting new foreign businesses to Japan. (Hibbard, S. 2010)

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Canada
Wal-Mart entered Canada acquring 122 shops of Woolco Canada chain in 1994 and as of today expanded the chain to 333 retail units. The company has expanded during the last 18 years and in 2006 has started its supercentre format in Canada.Woolco too belonged to an American based retail chain founded in 1962 who were branded as discount deapartment stores. (Wal-Mart. 2012) In 1994 Canadian economy was not in favourable conditions and many initiatives were taken to improve the economy and at large the business. The North American Free Trade Agreement ( NAFTA) in 1994 was a major step in recognising the inter trade between Canada and US. US being the largest trading partner of Canada, naturally US companies feel confident in starting business in Canada. NAFTA created an atmosphere where attitudes of both the parties are formally made supportive to each other. (Wall, H., 2003) Policies were made to attract foreign businesses at a time Canada was badly looking for the foreign currency and conditions were laid for the companies who came to Canada to recruit people with the intention of reducing the unemployment. (Kambara, K. 2010)

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Section 2

Mexico
When analysed the background in which Wal-Mart entered Mexico in 1991, we see interesting facts that supported this joint venture from different perspectives. From socio economic perspective, US and Mexico sustains a healthy business relationship where US becomes the significant trading partner for Mexico having over 80% of the Mexican exports are destined for the United States while 50% of imports come from United States. (Mexico's Free Trade Agreement. 2010) In addition being in close proximity and having a very old relationship as neighbours have created another link between these two countries. In 1990s Mexico adopted regional and bilateral free trade agreements influenced by the Doha Development Agenda as their key components of the foreign policy. In addition the country has had a growing commitment to trade liberalization and a trade policy that is among the most open in the world. (Mexico's Free Trade Agreement. 2010) Due to these measures the tax on import and export of these two counties has being 0% and that has being a major removal of trade barriers which has resulted in the entry of Wal-Mart to Mexico. The trade liberalization was intended to enhance the private sector to be the major stronghold of the economy was driven by governments newly adopted policies in 1991. (Villarreal, A. 2010) The government has used trade liberalization as one of a number of policy tools to improve
economic growth and has other programs to promote economic development and to reduce poverty.

(Villarreal, A. 2010) However the most significant agreement was the NAFTA (North American Free Trade Agreement) which evolved from the earlier. In addition the government reforms in deregulating the economy and reducing the bureaucratic red tape and privatising the public sector was aimed at making the private sector the axis or the engine of the Mexican economy. In 1990s, the government of Mexico invested heavily on infrastructure development which facilitated strong transportation

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network aimed at attracting foreign investors and accelerating the local business environment. (Villarreal, A. 2010) In this scenario, we see Wal-Mart has exploited such moves of the Mexican economic activities and policies strategically and seems to have adjusted its US formula to the tastes of the Mexicans. However in 2006, the same strategy did not work well in South Korea where economic policies and fine infrastructure go hand in hand to attract numerous foreign business ventures. (Sang-Hun, S. 2006)

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United Kingdom
As mentioned in the first part, the entry of Wal-Mart to UK is another foreign business that UK attracted during 1999 due to the investor friendly macroeconomic policies of the 1997 elected government. (Sawyer, M. 2006.) The main reasons why American businesses are likely to get established in Britain are the language and historical relationship that these two countries enjoy for a long period of time. However there are other reasons such as reducing the bureaucratic red tape and reducing the corporate tax which have fuelled the foreign businesses in UK especially after the 1997 election and the first budget of Gordon Brown as the chancellor. Their macroeconomic policies were intended to raise economic activities and reduce unemployment etc. (Sawyer, M. 2006.)

(Schifferes, S. 2000) As we see in the case of Wal-Mart, it enters into a new market only there is visible advantage. UK being a mature market, and seen the booming discount market, WalMart had taken a strategic financial step to come to UK to garner more profits. Add to that there were many public policy changes that facilitated this joint venture of WalMart and Asda in 1999.

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 The UK has a total of 252.4bn ($400bn) of direct foreign investment, and attracted 52.3bn
($78bn) in 1999. (Schifferes, S. 2000)

According to statistics, US carries out the largest FDIs in UK. When analysed why, there are more reason and clear policy changes that are evident. ( UNCTAD. 2006.) First the strong political stability the labour government received after the 1997 election. The strong legislature that would protect businesses from unlawful activities. The backing of the new government to attract foreign businesses. (Sawyer, M. 2006.) As mentioned, making the bank of England independent of the political influence by law that it would determine and set the interest rates. ( 1997 budget proposals) Reducing the corporate tax further by budget proposals. Reducing interest rates that facilitated the other related businesses. Encourage banks to lend more money. Reducing bureaucratic red tape. (Sawyer, M. 2006.)

(Jackson, J. 2011) A report on British manufacturing for Policy Exchange, a centre-right think-tank, notes that the
openness of the economy makes Britain a magnet for foreign companies looking for acquisitions on which they can build their manufacturing operations for Britain and elsewhere. (Small Island for Sale.2010)

Therefore it is evident that the entry of Wal-Mart to UK through Asda in 1999 has taken place at time when much of the public policy supported the foreign investment and at large doing business in UK. In addition the Wal-Marts business strategy and US formula have been adopted smoothly by the British consumer market where both countries share a closely shared business values. However in South Korea and Germany, the localising process of the US strategy and the business formula of WalMart had ended up in utter dismay. Interestingly the UK retailer, Tesco has done well in South Korea where it has deployed a local management team. (Sang-Hun, S. 2006)

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In analysing the contrasting scenarios, I feel, though how big the company is, it is highly important to be aware of the local sentiments and it is mostly known by the local people themselves. That is why Tesco is doing well while Wal-Mart had to pull out from South Korea.

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Japan
It is interesting to analyse why Wal-Mart went to Japan as the country is known to the world as a having a very secretive and closed economy from their rival foreign competitors.
Described as the most closed investment market in the developed world by European Union trade commissioner Peter Mandelson.. . (Hibbard, S. 2010)

(Bank of Japan.2012.) Especially after 1990s, with the continued recession, the central bank of Japan reduced the interest rates sharply as you see in the graph, to boot the businesses and encouraged commercial banks to lend money. However compared to other developed countries the inward FDI flow to Japan was at a minimum level in relation to their GDP as the attitudes of people towards foreign goods and services were negative and long held believes of foreigners created an alien relationship which affected the governance specially in the 19 and 20 centuries. (Hibbard, S. 2010) FDI levels in major countries (ratio of FDI stock to nominal GDP, as of end 2007)

Source: World Investment Report. 2008

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In this backdrop, the Japanese government announced plans to accelerate the inward FDI. Their plans include: Providing foreign investors with abundant information on all aspects of doing business in Japan. Offering expert consultation Proving even free temporary office space throughout the country Operating one stop business support centres in major business areas across the country (Doubling Japan's Cumulative FDI . 2006) Japan's FDI stock balance

Source: Bank of Japan, Balance of Payments In addition the government took many other initiatives to attract foreign businesses and to set the back ground, while trying to change the attitudes of the ordinary Japanese to accept and do business with the foreign investors. Many of the government agencies tried to focus on the FDIs emphasising foreign businesses as a means to learn new business ideas and models from foreign investors. (Hibbard, S. 2010) However the true reality of Wal-Mart in Japan tells a bleak story where Wal-Mart has already dumped billion of money to survive in Japan. (Holstein, W., 2007)The interesting aspect is that until now Wal-Mart has not understood the cultural and socio economical differences (for example like in Germany) where Japan is placed, compared to other places like Mexico or China where Wal-Mart has done quite well.

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In fact, Wal-Mart seems to believe Japan an important market and trying to save its minus market share. It does not want to lose Japan like they did in S. Korea or Germany. Therefore it is clear, though Wal-Mart has had the Japanese government support through policy changes; the business entry strategy of Wal-Mart has not so far worked well for the American retailer.

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Canada
The entrance of Wal-Mart to Canada in 1994 was fuelled by many reasons. Having a strong trade relationship between the two countries under the free trade agreement prior to the 1994 NAFTA, increased the bilateral trade by 56% between 1989 and 1994. (Wall, H., 2003) However the economic woes in Canada during 1990s were not unusual considering the issues surrounded world during that time .Canada was suffering from a huge debt crisis and high inflation drag the population to social unrest. Once the economy was stagnating, it did not create any businesses and unemployment became another problem in 1994 (see in the chart). Therefore a boost to the economy was a must.

(Kambara, K. 2010)

Canadas headaches with international rating agencies started in 1992 as first Standard & Poors and then Moodys (in 1994) lowered its debt ratings, alarmed about rising public debt levels. (Palmer, R and McCrank, J. 2011)

However the NAFTA agreements brought liberalised reforms where private sector businesses were given greater prominence of tax free business environment and expected to create job opportunities. Especially with regard to the commodity sector where retail grocery includes, (like in Wal-Mart) dominated the US Canada trade. Both the countries exported their agricultural products to each and
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became the biggest agricultural markets for them. Therefore we see a clear picture of Canada and its economy and how it created a business environment for Wal-Mart to get settled in Canada in 1994.

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Conclusion
I feel the analysis of the public policy of the four countries above, draws an interesting picture of the negative and positive aspects of Wal-Marts entrepreneurial business strategy and at large the US business formula in the 21st century. Why I stated as such, draws from the conclusions that I formulated while analysing the above countries including specially the failures of Wal-Mart in South Korea and in Germany. It was evident, that Wal-Mart has fully exploited the economic situations of the above countries and their policies towards foreign businesses like in the case of Mexico, Canada and UK. In addition the interesting aspect of the Japanese governments attempt to change the attitudes of people for foreign businesses and the Wal-Marts failure to exploit it and understand the local sentiments of Japanese, drew an even more subtle complexity in the case of international entrepreneurship. Therefore it is clear, the companies should weigh and analyse the policies that support the business and other aspects such as local socio cultural sentiments that would be an unseen barrier to enter into markets such as Germany, South Korea and Japan.

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Reference
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Kambara, K., 2010. Eras of Unemployment: Looking at US and Canada. The Society Pages. Avaiable from:<http://thesocietypages.org/officehours/2012/06/11/wade-andsharp/> ( Accessed 27 June 2012) Knorr, A and Arndt, A. 2003. Why did Wal-Mart fail in Germany? Institute for World Economic and International Management. Oman, C., 2010. Policy Competition for Foreign Direct Investment. OECD. Palmer, R and McCrank, J. 2011. Analysis: What Canada's debt crisis in the '90s can and can't teach U.S. Reuters. National Post . Rowley,I., 2005. Japan isnt buying the Wall-Mart idea. Bloomberg Business Week. Available from: <http://www.businessweek.com/magazine/content/05_09/b3922073.htm> ( Accessed 26 June 2012) Sang-Hun, S. 2006. Wal-Mart Selling and Leaving South Korea. The New York Times. 23 May 2006. Sawyer, M. 2006. Economic Policy in UK under new Labour: the end of boom and bust. University of Leeds. Schifferes, S. 2000. UK leads foreign investment. BBC News Business. 5 July 2010. Small Isalnd for Sale.2010. The Economist. Online From: <http://www.economist.com/node/15769586> ( Accessed 1 July 2012) Stanley, M and Witter, D.,1999. Wal-Mart buys Asda in UK retail shock, Financial Times. Available from: <http://findarticles.com/p/articles/mi_m0DQA/is_1999_June_17/ai_55041044/> ( Accessed 25 June 2012) UK Economy in 1990s, 2010. Economics Help. Available from: <http://econ.economicshelp.org/2010/02/uk-economy-in-1990s.html> (Accessed 26 June 2012)

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