The Globalization of Walmart

The Globalization of Walmart

1. Due to growth limitations in the domestic market, Walmart decided to expand internationally.

2. When initially expanding internationally, Walmart decided to begin with emerging markets, so as not to face established competitors, in the Americas. The first international store was a 50-50 venture that allowed Walmart to manage cultural and income differences as well as learning how to operate in the Mexican market. Walmart used the knowledge gained from Mexico to enter the market of Brazil with a 60-40 venture and then with a wholly owned approach in Argentina. Mistakes were made, but Walmart learned from them and made adjustments for the markets including competitive emphasis and acquiring acquisitions. The Latin America approach did not work for Canada though. Instead, Walmart entered the country via acquisitions with restructuring of practices to those that were successful in the US by using transition teams.

Walmart failed to achieve this type of success in Europe due to limited European infrastructure, lacking language skills, failure to centralize purchasing and the inability of suppliers to perform competency practices. There was also resistance from competitors, regulators and employee unions. With the inability to build a strong competitive base in Europe, Walmart sold its operations to competitors.

3. I believe the first thing Walmart should do is determine whether they can obtain and maintain a valuable competitive position in the markets of China and India. If they decide they can, the retail markets should be assessed to see the way business is typically conducted and to determine the area(s) where Walmart can obtain a competitive advantage. For instance, in China stores offer limited choices of low quality items in unappealing stores. Walmart could make their items of higher quality in a much more pleasant environment. Study the culture and values of the countries you wish to enter to better understand...