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Wal-Mart's Foreign Direct Investment Strategy

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When Wal-Mart would approach in Egypt for doing business it should strategically consider certain policies that would help to leverage the state’ s decisions, in a way that would prove to be profitable for its business. The company must show a positive outlook about foreign investments to the government in Egypt. It should make the government realize that FDI is a primal catalyst required for economic development. The company should introduce an effective, broad and efficient investment model for the country that focuses on investing across different regions equitably. The governments of emerging economies often impose barriers for foreign investments because they become overprotective about the domestic sectors.

Wal-Mart should make the government realize that it's low priced and effective operations would help to serve a healthy competition to the domestic firms in the country. The company must make the government believe that foreign investments would help the country to augment its employment opportunities. The newly established business of Wal-Mart would require a large number of workers in the business. The company should make the government realize that it would be most cost-effective for them to employ workers in Egypt than employing workers from foreign countries (WTO, 1996).

Wal-Mart adopts different entry modes to launch its business in different economies. It can be analyzed that, since Egypt is a growing competitive economy, the company may decide to set Turnkey projects in the economy (Rugman, 2002). The business firm can design new, ready to start strategies to get its success in the market of Egypt. The company may start issuing equity shares in the market to capture domestic funds. Since the 1990’ s the country has opened a domestic stock market to foreign investors.

The company may set up several outlets at different locations of the country. The warehouses must be set up in the country in locations where the transportation and communication facilities are good.

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