Scope Of International Operations Walmart
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Scope of International Operations
International operations for Ballys Total Fitness and Wal-Mart are responsible for a significant amount of growth as well as profitability. Ballys is the largest, and only nationwide, commercial operator of fitness centers, with approximately four million members and nearly 430 facilities located in 29 states, Canada, Asia, Europe and the Caribbean. As of June 30, 2005, Ballys opened fitness centers in over 45 major metropolitan areas representing 63 percent of the United States population and over 16 percent of the Canadian population. The Company introduced its first international Ballys facility in Nassau, Bahamas through a franchise agreement with Doctors Hospital, the leading for-profit medical institution in the Caribbean region. Ballys also has a joint venture agreement with China Sports Industry Co. (CSI), the largest publicly traded company related to sports and fitness in China. The joint venture includes opening Ballys in major cities such as: Beijing, Shanghai, Taiwan, Thailand, Singapore, Malaysia and the Philippines. This joint venture with CSI took place in June 2002 estimating 50 to100 Ballys to be opened in Asia over the next five years. Along with CSI, Ballys has a joint venture with Holmes Place, the leading operator of premium health and fitness clubs in Europe. This will help to expand the Bally Total Fitness name brand in Western Europe and bring the Holmes Place brand name to the United States. Korea is one of Ballys strong franchising successes. “Growing the brand through international franchising efforts is a strategy that ensures we maximize our growth while incurring no capital costs for the company,” said Paul Toback, president and chief executive officer, Bally Total Fitness. “By offering high-quality, affordable fitness solutions to the ever growing health and fitness needs of the South East Asia population, Ballys can continue to solidify its position as a true global leader in fitness products and services.” Ballys has international operations setup in Asia, Canada, Europe and the Caribbean. These are four major countries as far as population and economy goes. While rapid growth is a key part of the companys strategy, Ballys was intent on preserving value during the expansion process. When it comes to value, Ballys makes sure that any new store to open will contain state-of-the-art fitness equipment, as well as more than 120 group exercise classes, personal training, retail stores, rehabilitation centers, massage services and childcare centers. A problem Ballys runs into when opening up overseas is the international currency rates. The value of a dollar in some of the countries they have facilities in, is less than it is in the United States. This is never a fixed value either so it becomes much more difficult for financial forecasting to be accurate. Another problem the company may face when it comes to overseas facilities is brand piracy. Some countries may administer different rules and regulations, or use different equipment that may not be considered state-of-the-art. This hurts the credibility of the company, so it is important to make sure that value is highly administered when opening facilities internationally. Overall, Bally Total Fitness has been successful in expanding their company internationally and will continue to do so as long as they remain making a profit.
Wal-Mart Stores, Inc. operates retail stores in various formats in the United States and internationally. It has two segments: The Wal-Mart Stores and The Sams Club. As of July 31, 2005, Wal-Mart operated 1,276 Wal-Mart stores, 1,838 Super centers, 92 Neighborhood Markets (food and produce), and 556 Sams Clubs in 50 states in the United States. The company operates various retail formats in Argentina, Brazil, Canada, Germany, Mexico, Puerto Rico, South Korea, and the United Kingdom. It operates 261 Canadian Wal-Mart stores and Sams Clubs, 11 units in Argentina, 150 units in Brazil, 88 units in Germany, 16 units in South Korea, 697 units in Mexico, 54 units in Puerto Rico, and 292 units in the United Kingdom, as well as 48 units in China under joint venture agreements. As you can see, Wal-Mart is a much larger company than Bally Total Fitness. Wal-Marts stores in Mexico alone exceed Bally Total Fitness total amount of facilities in both the U.S. and overseas. Their growth strategy is much more rapid than that of Ballys. This is because Wal-Mart stores are built in a warehouse format and are much easier and quicker to have up and running, making money much faster. They also sell tons of commodities, which attract business no matter what. If the economy is very poor, people may think twice about that membership to Ballys but will still go and buy groceries and toilet paper. Though