Report

Question 2

Discuss two main issues mentioned in the closing case”Wal-Mart’s Foreign Expansion”

Introduction

This case briefly describes Wal-Mart’s expansion experience in Mexico, China and some developed countries. Wal-Mart, founded in 1962 in US, is the world’s largest retailers. As its slogan “Save Money, Live Better” said, Wal-Mart has always kept its everyday low price strategy. Wal-Mart has also succeeded in managing the inventory system to achieve efficiency. However, during the expansion into other countries, Wal-Mart encountered many difficulties related to culture. In this report on the following, two main issues mentioned in the case will be presented in details. Firstly, how business interacts with culture in the case will be examined. Then there will be the analysis between culture and competitive advantage. Finally, a conclusion will be given.

The First Issue

The most significant issue mentioned in the case may be the interaction of culture and business.

With the trend of globalization, any cultural differences or changes will affect business practice and the costs of doing business. Conversely, any innovation in business practice will influence the culture.

Wal-Mart’s successful expansion into Mexico is a typical example of interaction between culture and business.

When Wal-Mart entered into Mexico market, it found Mexicans shopping habits are much different from that in the US. Consumers in Mexico preferred to shop at small local stores rather than supermarkets. The reason behind may be inconvenience for Mexicans to shop around in a faraway supermarket as many Mexicans lacked cars and Wal-Mart usually opened its supermarkets away from cities. While consumers in US were familiar with frozen foods, most Mexicans were more willing to buy fresh products, especially those items which cannot be kept overnight, because many Mexicans lacked large refrigerators. In addition to these different shopping habits, the living standards were different....