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Wal-Mart plans entry strategy

October 18, 2005

Wal-Mart plans entry strategy
for Eastern Europe
Label and packaging groups with interests in Eastern Europe, or indigenous companies themselves, will have noted with interest the announcement by Wal-Mart’s CEO, Lee Scott, that his company is considering entering Poland, Hungary and Russia “in the near future”. Wal-Mart’s latest bid to boost sales outside the USA is bound to bring some big contracts in its wake. Of course, it is not necessarily the type of business that everyone will want to chase, given Wal-Mart’s reputation for screwing suppliers to the wall.
“We now want to be in these countries. It doesn’t matter to us which of these will be the first. We want to be in all of them at some point,” Scott told the Financial Times. He said the expansion would probably come in the form of acquisitions. Wal-Mart is supposed to have a war chest of between $16 and 17 billion with which to make them. No specific acquisition targets have been announced.
Worldwide, Wal-Mart generated $285 billion in sales last year, of which 21 percent came from foreign markets. Scott says he thinks the strategy will raise Wal-Mart’s overseas sales by 1 percent each year, and expects overseas sales growth to equal 30 percent of the company’s total sales growth over the next five years.