Walmart Takes on the World

Case Study- Wal-Mart Takes on the World.

1. Why has Wal-Mart viewed international expansion as a critical part of its strategy? 

Usually a company seeks to expand globally to aid the growth of the company. Same was the case with Walmart, it had started to experience limited growth in America right after fast paced expansion during the 1980-1990-time period. It had reached its saturation point where it was still profitable but sales were not increasing at a rate that would help the company to be continuously profitable in future. So Wal-Mart’s strategy of global expansion helped the company grow and be even more profitable.

2. What did Wal-Mart do to enable the company to achieve success in Canada and Latin America?

Strategically, the best decision by Wal-Mart was to enter one region at a time and start with the more populated yet small and emerging Latin America market comprising mostly of Brazil, Mexico and Argentina. If the company had decided to enter bigger markets like Europe first, they would have had to take market share from them which wouldn’t have been easy in a foreign market.

Wal-Mart made another smart move when it decided to go into Mexico in 1991 as a joint venture, a 50-50 partnership with Cifra, a known retail giant in Mexico. Wal-Mart learned the ups and downs of the market and the culture in Mexico with the help of Cifra. This was one of the biggest reasons for the company’s success in Latin America. This knowledge about the market further helped Wal-Mart management when entering Brazil in 1996. As the company was now more informed and confident, it went in again as a joint venture but this time keeping 60% of the partnership. Later the company opened store in Argentina on its own keeping sole ownership.

In Canada, Wal-Mart applied a different strategy as it was already an established market. Wal-Mart could not expand there solely through internal growth so the company decided to achieve successful expansion in Canada by...