Walmart

Walmart, a leading US retail giant, had gained international experience through joint ventures and subsidiaries in many countries like Mexico, Canada, Argentina and China. It had been successful in attracting the consumers on a large scale through its policy of 'Every Day Low Price' (EDLP), customer centric approach and encouragement given to customers to return the purchased items in case of any defect in the products. The customers were also enticed to purchase large quantities because of the low pricing when compared with the competitors. Walmart also offered a wide range of products and groceries which was another attraction to the customers to shop under a single roof. Through their international operations in Japan and Germany, Walmart had also learnt lessons on different consumer behaviour. While Japanese consumers felt that a low price was indicative of low quality and did not patronise many of Walmart stores, in Germany governmental restrictions on low price strategy favoured the local retailers leading to a disfavour of Walmart by the consumers. South American experience and Chinese experience for Walmart had boosted the international revenue to a comfortable level due to the policy of EDLP and also adopting to local cultures employing local people and procuring major stocks locally. In spite of failures in some of the countries, Walmart had a large scale presence in 15 countries and projected revenue of $405 billion for 2010. In the backdrop of this successful journey, Walmart had planned to enter the African continent, where many of the countries had shown reasonably good economic growth and increased levels of consumption, through acquisition of Massmart, a retail giant in South Africa having 288 stores. This joint venture would provide opportunities to Walmart to expand its footprint in African countries which were expected to register a growth of over 5% in their GDP. The case study analyses the opportunities and challenges that await Walmart in its...