Professional Documents
Culture Documents
Table of Contents
PART A ..........................................................................................................................................
Case study ......................................................................................................................................
Question 1: How does expanding internationally benefit Walmart? ........... 1
QUESTION 2: What are the risks that Walmart faces when entering other
retail markets? How can these risks be
mitigated? .................................... 2
QUESTION 3: Why do you think that Walmart first entered Mexico via a
joint venture? Why did it purchase its Mexican joint venture partner in
1998? ........................................................................................................................... 3
QUESTION 4: What strategy is Walmart pursuinga global strategy,
PART B ...........................................................................................................................................
Introduction ............................................................................................................... 7
Company background ............................................................................................. 8
The companys strengths and weaknesses related to global business
activities. ................................................................................................................... 15
Competitive Advantages ....................................................................................... 17
Analysis on existing competitors and their global strategies ....................... 19
Identify and analyze the opportunities and challenges faced the company
in expanding its business internationally. ........................................................ 21
Case study
Question 1: How does expanding internationally benefit Walmart?
As a present developed, many of Walmarts suppliers constructed manufacturing works
near its Mexican delivery centers so that they could better assist the company, which assisted to
advance drive down inventory and logistic costs. There have other benefits. Firstly, Walmart has
also been to gain important economies of scale from its worldwide purchasing power. A lot of
Walmarts key dealers have long been global businesses for example GE (appliances), Unilever
(food products), and Procter and Gamble (personal care products) are all main Walmart dealers
that have long had their own worldwide processes. Besides that, Walmart has used its improved
size to request deeper discounts from the local processes of its worldwide dealers, increasing the
companys capability to lower prices to customers, increase market share, and eventually earn
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QUESTION 2: What are the risks that Walmart faces when entering other
retail markets? How can these risks be mitigated?
Walmart faced the risks when get into another retail market, they were faced the risks.
The risk is replicating not success. This risk happens when Walmart has matters in its system of
effective distribution system on replicating at Mexico. This is because of the poor infrastructure,
road was crowded and with the local suppliers there were a shortage of leverage. From inherent
problems of stock, thus increasing of cost and higher prices as matter that occur that cannot or
will not directly delivered to Walmarts store or distribution centers in Mexico. There were also
has misunderstandings with selection of merchandise. Items like mowers for cutting grass, ice
skates, fishing rods and blowers leaf that famous at US were carried by many stores in Mexico.
So that, this items do not sell well and this take action of manager to slash the prices to move the
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QUESTION 3: Why do you think that Walmart first entered Mexico via a joint
venture? Why did it purchase its Mexican joint venture partner in 1998?
My opinion why the Walmart enter Mexico by a joint venture because there a lot of
advantages that they can get by joining their own company with the establish company that
already establish at Mexico. For example, when Walmart want to expand their business in
Mexico, they choose the company that already establish at Mexico market which is Cifera , the
largest local retailer.
In 1998, Walmart make their move to the global expansion by purchased their
Mexican joint venture because they want to adapt with the Mexican operations and match with
the local surroundings. The reason why Walmart doing these because they learn from their
mistake before. By purchased the joint venture company, Walmart can implement their own
system which they can improve with their distribution system, checking more careful stocking
practices means that the Mexican stores can sell merchandise that appeal more to local tastes and
preferences. By owning the local company, Walmart can easier to improve the process of their
target to expand more about their business. for my opinion, by owning the local company,
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Yes, the strategic choice makes sense because Walmart always care about what customers
want even in the cities. They always try to protect product in the stock with the local culture.
Part b
INTRODUCTION
We are in a group of 6 given task to do research and analyze on Walmart corporation in
order to complete this project. We done our research very widely and have been explained very
clearly throughout this project. Walmart corporation is very famous company around the world
and well-known for the largest retail industry. In 1962, Walmart was established by Sam Walton.
Waltmart was named based on the family name Walton, which is giving Walmart the meaning of
Waltons mart in long form. Walmart is known as a strong company because during the
Company background
Wal-Mart Stores
WAL-MART
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Sam Walton is the person who founded this corporation in 1962, combined
Walmart's History
Walmarts history is talking about how Walmart have been began from the starting , how it had
been grow, and hows the leadership has been changed throughout the retail industry.
1960s
Merchandising Revolution
Sam Waltons plan created an unshakeable foundation The Lowest Prices Anytime,
Anywhere.
1962
On July 2, 1962, Sam Walton was opened his first Walmart stores in Roges, Ark.
1967
24 stores which cost up to $12.7 million in sales was owned by Walton family.
1969
The corporation formally and legally combined as Wal-Mart Stores, Inc. on the year of 1969.
1970
Walmart started to grow up and well known in National level.
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1993
$1 billion sales week during the year 1993 is celebrated by Walmart .
1994
Walmart Corporation is being spread to Canada with the buying of 122 Woolco stores.
1996
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Walmart Business
Walmart had introduced thousands of stores around U.S. and expanded internationally. Its
started from very humble beginnings as a small discount retailer in Rogers, Ark for the first time.
Now because of the innovation, Walmart creating a seamless experience to allow customers
purchase shop at anytime and anywhere through the online, mobile devices and in stores. They
created values and bring a lot of opportunities to customers and communities globally. Walmart
corporation running more than 11,000 retail units under 69 banners in 27 countries and ecommerce websites in 10 countries. Besides that, they also employs in U.S alone about 1.3
million and around the world about 2.2 million associates.
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However, Walmart also faced the weaknesses. If we can see, Walmart has a lot of
consumer over the world sales that have low prices and well-known name. So that, Walmart as a
retailing giant has taken over the retail industry. Therefore to the small retailers, it will make
extremely difficult to survive. They are angry because the powers of Walmart monopolize gain
over past few decades. Due to lack of sales, most of the small shops have been forced to close.
Because of this issue, some people refuse to shop at Walmart.
Other than that, since Walmart sells variety of products like food, clothing, and
stationary, they have the lack quality of products without focused on competitors also. Its focus
on lowering the cost production and give low prices, but they did not focusing on quality of
product and the competitors. The lack focusing of Walmart on quality of product because of only
focus on lowering price, the competitor can take the chance makes the change and improve to
customer needed. As case occur in Japan, Walmart Sieyu chain failed due its inability to attract
shopper of quality-obsessed. Then, growing too big in many areas in the world makes lack of
control. Its difficult to control certain place with different culture.
Last but not least, sometimes the location of the stores of Walmart has a disadvantage.
At European market, they still do not have a large part although Walmart has grown and
expanded into the international market. The competitors only gaining in the other surrounding
countries and only present in the UK. Walmart also needs to consider the consequences of
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As we know, the major competitor of Walmart is Kmart and Targets. This two major
competitor always compete with each other to become the successful company that have their
own competitive advantage. As we focus on Walmart, we can see that the difference between
Walmart with the other two is because their motto of their company which is always low
prices. So the competitive advantage that Walmart have is to sell their product with the lower
price compared to Kmart and Targets.
Always low prices is well-defined how Walmart play and focus more in a wide
range of consumer product, starting from food to prescriptions until electronics. We usually
know that Walmart always support their low-cost and enhance it with an integrated system of
capabilities, include with their real estate acquisition, no frills store design and superior supply
chain management that involve many expert point-of-sale data analytics. Walmart also known as
the company that mix between their product and service. It kept tightly aligned with their own
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Besides, the fundamental of Walmart principle is everyday-low prices which is sell the
product in a lower price to their customer as low as the customer cant get from the other
company. In addition, Walmart also commit to customer service which is they also concern
about what really the customer want from the product that they sell and always concern about the
quality of their product that they want to sell to their customer. Furthermore, Walmart always
care about their relationship with their vendor. We can see that the strong relationship between
vendor and the company can make our company be more successful and our vendor will trust us
for a long time. Walmart also efficient in their operation network. We can see how the process
that Walmart do to make sure that the company that their joint ventures with is going well in not
making some losses.
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Existing opportunities
Walmart was established in Arkansas by Sam Walton since year 1962.
Walmart has grown rapidly from the smaller to the largest retailer in the world and
Walmart was a leader in the performance of information systems in track the product
sales and inventory, developed one of the most efficient distribution systems in the world.
Other than that, Walmart was one of the first companies to promote widespread stock
ownership among employees. However, Walmart was realized that its opportunities for
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Walmart was failed to attract the customer and retail environment in Japan.
Walmart thought that Japanese would adapt to the way of Walmart operates.
Japanese people like to buy in small quantity but American like to buy in bigger
quantities, stocking up
A lot of suppliers do not deliver the stock directly to the Walmarts stores or
distribution center.
Other than Walmart, a lot of stores have the same concept with Walmart. Such as
Tesco, Carrefour and also Macro.
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All the companies must compete to be the top spot in the world.
Other than that, Walmart need to compete with the companies that already
popular in that country.
Such as Japan, Walmart must compete wih 7-Eleven Japan Co.Ltd., Aeon Co.Ltd.
and also Ito-Yokado Co.
All the companies have the different strategies to make the customer be one of the
loyal customers for their companies.
4. Poor infrastructure
As we know, Mexica is the first country that Walmart choose to expand the
companies.
Therefore, the infrastructure still poor because Walmart still does not have the
experience in expanding the companies.
Other than that, the road in the Mexico is not in good condition so it is difficult to
attract the customer.
Walmart had decided to expand the companies internationally but a lots of problem was
occurred when the first shop was operate in Mexico. The problems are Walmart had problem in
replicating its efficient distribution system in Mexico, the infrastructure was also poor, crowded
roads, lack of leverage with local suppliers and the last one was problems with merchandise
selections. Because of this, Walmart had learned from its early mistakes and Walmart had
adapted its Mexican operations to match the local environment. Other than that, when Walmart
was compete with Tesco, Walmart had decided to compete by changing the concept of the stores
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Conclusion
Walmarts determination to expand globally regardless of profit or loss, have given the
huge success to the company and this can seen through Walmarts power around the world and
Walmarts domination into the market. Walmarts success is a great, brilliant and remarkable
story and it created history in the business world for maintaining and keep going till now on their
businesses not only domestically, but also globally. For a rapid growing, the huge and large
retailer like Walmart corporation, best entry modes are necessary and vital to enter into a new
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