IB2490 MODULE CONCEPTS COMPREHENSIVE RUNTHROUGH
Study Guide for the Walmart Strategic Report
Week 1 – Global Business Strategy
Core Ideas
International Business (IB) = transactions across national borders (trade + FDI) to
satisfy needs of individuals and organisations.
Strategy = determination of long-term goals, choice of actions, and allocation of
resources to achieve those goals.
Strategy-as-Practice (SAP)
Strategy is not just a plan document; it is something people do.
Praxis: Situated, socially accomplished flows of activity that are strategically
consequential.
Example: How Walmart’s sourcing team actually negotiates with suppliers in
Bangladesh.
Practices: Methods, tools, and routines used during strategizing (e.g., audits, KPIs,
dashboards, meetings).
Practitioners: Strategy actors – CEOs, TMT, middle managers, consultants, but also
workers and external stakeholders.
Environmental Analysis Tools (High-yield for context)
1. PESTEL – macro environment.
2. Porter’s Five Forces – industry structure.
3. Porter’s Diamond – national competitive advantage.
4. VRIO / FSAs–CSAs – competitive advantages.
5. Value Chain Analysis – primary and support activities.
Week 2 – Cross-National Distance (CAGE)
CAGE Framework
Distance is not just geography; it’s four dimensions.
1. Cultural Distance
Language, religion, values, norms, communication styles.
Example: direct vs indirect communication; attitudes towards hierarchy.
2. Administrative Distance
Legal systems, colonial ties, political hostility, shared trade blocs, corruption,
institutional strength.
Example: Brexit increasing admin distance UK–EU.
3. Geographic Distance
Physical distance, borders, time zones, infrastructure, climate.
4. Economic Distance
Income levels, cost/quality of labour, infrastructure, financial systems.
Empirical insight: Common language, colonial ties, trade blocs often boost trade more than
proximity alone.
Week 3 – Sustainability & Stakeholders
What is Sustainability?
Corporate sustainability looks beyond short-term profit to long-term economic, social, and
environmental value creation.
Materiality Matrix
Plots issues by:
Y-axis: Impact on stakeholders (workers, communities, regulators, investors).
X-axis: Impact on the company (financial, operational, reputational).
Top-right (high–high) = strategic priority.
For Walmart, worker safety and labour conditions should clearly be in the top-right
quadrant, but practice suggests they were treated more like low–medium business impact
until after scandals.
Stakeholder Concepts
Stake = interest, legal right, or moral right/ownership.
Rights:
Legal rights: due process, minimum wage, safety.
Moral rights: fairness, dignity, human rights.
Power/Interest Matrix
Classifies stakeholders by:
Power (ability to influence Walmart).
Interest (how much they care about the issue).
Quadrants:
High power / High interest = Key players (e.g., Walmart HQ, large investors).
High power / Low interest = Keep satisfied.
Low power / High interest = Keep informed (e.g., workers).
Low power / Low interest = Minimal effort.
Week 4 – Internationalisation: Why, When, Where
Four Core Questions
1. Why internationalise? (Motives/drivers)
2. When? (Timing and pace)
3. Where? (Location choice)
4. How? (Entry mode)
Push vs Pull Factors
Push (home problems): market saturation, high costs, intense competition.
Pull (host opportunities): low costs, new markets, favourable policies.
Internationalisation Motives (Cuervo-Cazurra, Narula & Un)
Firms internationalise to:
1. Sell More – exploit home resources in foreign markets (revenue growth).
2. Buy Better – exploit host resources (e.g. cheaper labour).
3. Upgrade – acquire capabilities abroad to improve home operations.
4. Escape – get away from home-country constraints.
Week 5 – Internationalisation: How? (OLI & Entry Modes)
OLI / Eclectic Paradigm (Dunning)
A firm engages in FDI when three conditions hold:
1. Ownership (O) advantages – FSAs
Proprietary tech, brand, scale, managerial know-how.
2. Location (L) advantages – CSAs
Cheap labour, resources, infrastructure in host country.
3. Internalisation (I) advantages
Benefits from keeping activities in-house instead of through market contracts.
Week 6 – Strategy & Structure
Core Idea: Fit between Strategy and Structure
Strategy: long-term goals + allocation of resources.
Structure: how tasks, responsibilities, and authority are arranged.
Literature emphasises that alignment between the two is necessary for performance.
Integration–Responsiveness Framework
Firms face competing pressures:
Global integration (cost reduction, standardisation).
Local responsiveness (adapting to local needs).
Four broad strategies:
1. Global Standardisation
High integration, low responsiveness.
Standardised products, centralised control, exploit scale.
Good for cost leadership.
2. Multidomestic
Low integration, high responsiveness.
Local autonomy, heavy adaptation.
3. Transnational
High–high (integration + responsiveness).
Very complex, often matrix structure.
4. Home Replication
Low–low, simple exporters.
Week 7 – Navigating Emerging Markets
Emerging Markets & Institutional Voids
Emerging markets: high growth, but institutional gaps.
Institutional voids = missing or weak market-supporting institutions:
Weak labour inspection, weak courts, lack of intermediaries.
Governments may prioritise FDI and jobs over strict enforcement.
Liability of Foreignness (LOF)
Foreign firms face extra costs:
Cultural misunderstandings.
Political risks.
Institutional complexity.
But big Western MNEs also face higher visibility – they are more vulnerable to NGO/media
scrutiny.
Legitimacy Trap
MNEs in EMs can get stuck:
If they follow local norms (very low wages, lax safety), they remain cost-competitive
but lose legitimacy in home markets.
If they impose high home standards, costs rise and they may be uncompetitive locally.
Week 8 – CSR (Corporate Social Responsibility)
CSR Definition
CSR = going beyond narrow economic, technical, and legal requirements to generate social
benefits along with profit.
Related notions:
Triple bottom line (People, Planet, Profit).
ESG investing.
Corporate citizenship.
Carroll’s CSR Pyramid
Four layers:
1. Economic – be profitable (foundation).
2. Legal – obey the law.
3. Ethical – do what is right, just, fair; avoid harm.
4. Philanthropic – be a good corporate citizen.
Shareholder vs Stakeholder
Friedman: single responsibility is to increase profits within the rules.
Stakeholder view: firm owes responsibilities to multiple groups (workers,
communities, environment).
Business Case for CSR
Meta-studies show generally positive association between CSR/ESG and financial
performance, with context-dependent strength.
Stakeholder Responsibility Matrix
Maps responsibilities (economic, legal, ethical, philanthropic) for each stakeholder (owners,
employees, customers, community, public).
Week 9 – Open Strategy
What is Open Strategy?
Traditional strategy: closed, elite, secretive. Open Strategy:
more transparency and inclusion in strategy processes.
Transparency = who can see strategy information.
Inclusion = who can participate in making strategy.
These form two continua: a firm can be more open on one dimension than the other.
When to Open?
Different phases:
Idea generation – more external inclusion; limited company-specific info.
Strategy formulation – selective external/internal inclusion; more sensitive info.
Implementation – mostly internal; transparency to employees/partners.
Benefits and Dilemmas
Benefits:
More diverse ideas, better strategies.
Higher commitment and understanding.
Dilemmas:
Commitment (raising expectations).
Disclosure (risking competitive advantage).
Process (slower, harder to control).