Sears did it and got distracted; GM did it and got into trouble; and now Walmart almost did it.
No doubt Walmart sees opportunities for synergy and growth by extending into the banking industry. However, just how sound is this move? How attractive is the industry to Walmart? Does Walmart have the necessary resources and capabilities to compete in this market? Can Walmart really outdo existing banks in their home industry? Are there better alternatives? If it, indeed, makes sense for Walmart to get into banking, how does the banking division fit with the rest of the firm? How can Walmart avoid making the same mistakes that Sears and GM did?
Clearly, regulatory environment aside, there are many more questions that Walmart has to address before executing this diversifcation scheme.
Saturday, March 17, 2007
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