Sep
28
Walmart’s Next International Fling
Posted by: douglasfeltham | September 28, 2010 | Leave a Comment
Wal-Mart has recently announced their plans to buy out the chain Massmart in South Africa and establish a presence there. This is seen as a way to continue growth with the US economy stagnating. However when you look at this deal it seems like these new operations have the odds stacked against them. Their potential problems in this case would stem from the unionization of the work force there. Unlike in America where Wal-Mart is able to hire non-unionized workers, for long hours with low pay and benefits, South Africa has a very large and powerful union movement which will try to force them to change how they do business. The last time they tried to enter a highly unionized market, with a strong emphasis on labour rights was Germany, and that was a disaster. They had massive labour issues with a work force expecting more, and their bad reputation helped sink their stores there. Now they are trying to enter a country where unions recently held the nation paralyzed for three weeks because a 7% wage increase wasn’t big enough, and where people who crossed picket lines were violently assaulted. Wal-Mart will be in for some interesting times.
