The Implications of Wal-Mart's Takeover of ASDA

Burt, Steve; Sparks, Leigh

doi:10.1068/a33219

Cited by 48 publications

(55 citation statements)

References 65 publications

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“…In recent years, specifically since the increasing cross-border activities of retailers such as Walmart, strong organizational cultures have been singled out as vital factors for international success (Arnold, 2002;Arnold & Fernie, 2000;Burt & Sparks, 2001;Gerhard & Pioch, 2009;Suh & Howard, 2009). This chimes with the general tenor amongst (international) human resource management (HRM) academics and practitioners who regard vibrant organizational cultures (such as a 'people-for-profit' culture, Cawood, 2008) as best competitive differentiator (Bloom, 2011;Convenience Store News, 2011;HRM International Digest, 2012;Webster & White, 2010).…”

Section: Introductionmentioning

confidence: 97%

Organizational culture as differentiator in international retailing

Pioch

Gerhard

2014

The Service Industries Journal

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Much of the international retailing literature echoes major retailers' assertions that inimitable organizational cultures can create competitive advantage. However, the culture concept remains ill-defined and systematic international empirical analysis is lacking. Based on website analyses of nine international retailers, the paper investigates how organizations define their cultures, codify and transfer them into practice, and aim to homogenize them across borders. Although some evidence for organization-specific cultural aspirations is identified, findings suggest that retailers' cultures become homogenized within and between countries. This supports previous work on the existence of industry-specific macro cultures and challenges the resource-based view, which sees culture as a source of competitive advantage.

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Section: Introductionmentioning

confidence: 97%

Organizational culture as differentiator in international retailing

Pioch

Gerhard

2014

The Service Industries Journal

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“…One issue around this takeover attracted considerable speculation at the time and has been the focus of discussion specifically (Hallsworth and Clarke 2001) and generally (Burt and Sparks 2001) in articles in this journal. Some months previous to the takeover, a meeting apparently took place in Downing Street between the Prime Minister and Wal-Mart.…”

Section: Commentary: When Tony Met Bobbymentioning

confidence: 99%

When Tony Met Bobby

Sparks

2008

Environ Plan A

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When Tony met BobbyIn June 1999 Wal-Mart intervened spectacularly in an agreed merger between Asda and Kingfisher by paying »6.7 billion to take over Asda outright. Reactions ranged dramatically (Whysall, 2001); this was the death-knell of British retailing or the redemption of British consumers. Whatever the view, Wal-Mart buying a major retailer such as Asda, and in such a significant European market, was a landmark in the globalisation of retailing.One issue around this takeover attracted considerable speculation at the time and has been the focus of discussion specifically (Hallsworth and Clarke, 2001) and generally (Burt and Sparks, 2001) in papers in this journal. Some months previous to the takeover, a meeting apparently took place in Downing Street between the Prime Minister and Wal-Mart. The very fact this meeting occurred, and at that time, is intriguing. Secrecy surrounding the meeting increased speculation over the contents of any discussion. It was raised in Parliament and during investigations on retailing by the Select Committee on the Environment, Transport and Regional Affairs. Over time, however, the meeting has faded from public attention and consideration. Yet, it still remains potentially significant. The introduction from January 2005 of the Freedom of Information Act potentially opened a window on this previously`secret' meeting. This commentary concerns the meeting itself and the use of the Freedom of Information Act to obtain information about it. It raises questions about lobbying, secrecy, and retail change and is another window on Pal and Medway's (2008) commentary oǹ working the system'.

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“…In essence Asda tried to mimic the Wal-Mart 'market spoiler' effect (Arnold et al, 1998). When Wal-Mart took it over, the general view therefore was that Asda was Wal-Mart 'ready' (Whysall, 2001;Burt and Sparks, 2001). …”

Section: Asda: a Brief History To 1999mentioning

confidence: 99%

“…The entry to the UK has perhaps a special significance (Burt and Sparks, 2001). It was the first strategic market entry where the intention was to quickly become the market leading retailer.…”

mentioning

confidence: 99%

Settling for second best? Reflections after the tenth anniversary of Wal-Marts entry to the United Kingdom

Sparks¹

2011

Strategic Direction

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Structured AbstractPurpose -This paper evaluates the comparative progress of Asda in the UK since its surprise takeover by Wal-Mart in 1999. Wal-Mart expected to become the #1 retailer in the UK and many commentators saw massive problems ahead for local retailers. These expectations were not met; this paper investigates why.Design/Methodology/Approach -Asda's progress is considered through a brief discussion of the company's history to 1999, an investigation of the changes Wal-Mart subsequently made to Asda's operations, the comparative impact of these changes and then a consideration of the restrictions on impact deriving from organisational, competitive and environmental factors.Findings -Despite the strong rhetoric on entry, the commercial reality has seen only moderate success for Asda, and a widening gap to the market leader, Tesco. Explanation for this includes competitive strategy and reactions, market restrictions particularly in land-use planning, and unwillingness by Asda (Wal-Mart) to alter their focused store format strategy in line with competitor actions and market directions.Research Limitations/Implications -The analysis is at a macro corporate and national level, drawing mainly on published data. Research implications include the rebalancing of considerations of organisational competence and market environment factors on international success. A focus on political and non-market activities is suggested, though an unwillingness of companies to reconsider strategic directions is also indicted as a key factor.Practical Implications -Implications for national and international strategic decision making at the corporate and governmental levels are identified. Businesses can use the findings to reconsider their positioning and actions. Reflections on hyperbolic reactions to takeovers might also be provoked.Originality/Value -No other paper has considered the market level changes in connection with Asda since its take-over by Wal-Mart and sought explanations for the relative (lack of) performance. The conclusion, that Asda has not been as successful as reported in the literature and the media, is original. American retailers however, it had not opened stores outside its home country. This was in stark contrast to many of the leading European retailers, which had internationalised from an early stage. Wal-Mart's comparative insularity began to change in 1991 however when it started to move beyond the USA.Wal-Mart's internationalisation process can be divided into three phases (Burt and Sparks, 2006;Palmer, 2005). In the first phase from 1991-1994, entry to adjacent markets was undertaken (Canada, Mexico and Puerto Rico). The second phase (1994)(1995)(1996)(1997)(1998) after the formal establishment of Wal-Mart's International Division), was essentially a world markets focus whereby a variety of markets were entered (Hong Kong, Brazil, Argentina, China, Indonesia, Germany and Korea) using various methods and approaches and developing different formats.All seemed to involve putting 'a toe in the water' in...

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The Implications of Wal-Mart's Takeover of ASDA

Cited by 48 publications

References 65 publications

Organizational culture as differentiator in international retailing

Organizational culture as differentiator in international retailing

When Tony Met Bobby

Settling for second best? Reflections after the tenth anniversary of Wal-Marts entry to the United Kingdom

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The Implications of Wal-Mart's Takeover of ASDA

Cited by 48 publications

References 65 publications

Organizational culture as differentiator in international retailing

Organizational culture as differentiator in international retailing

When Tony Met Bobby

Settling for second best? Reflections after the tenth anniversary of Wal-Marts entry to the United Kingdom

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Settling for second best? Reflections after the tenth anniversary of Wal-Marts entry to the United Kingdom