Wal-Mart Internatinal Operations

Wal-Mart Update

Wal-Mart, whose international business is its fastest growing segment and already makes up roughly one quarter of its total business, is positioning itself for 20 years of worldwide growth according to the CEO . Wal-Mart is projected to spend up to US$750 million to build, renovate or relocate roughly 73 stores in Canada in 2012 . If Wal-Mart International (Over 9,000 stores under 60 different names in 15 foreign countries) was viewed as a stand-alone company, it would be the 3rd largest retailer in the world as of 2010 with sales of US$109 billion and a growth rate of 12.1%. 75% of Wal-Mart’s stores outside of the US operate under a different name as Wal-Mart has shifted towards smaller formats and acquisitive growth for global strategy. In comparison, Wal-Mart’s domestic unit did not experience any significant growth and virtually remained flat for 2010 .

Wal-Mart de Mexico has been the top performer with an operating margin of 7.9% in 2011 compared to 4.9% in total for all global operations during this same time. But Wal-Mart International does have some notable challenges. They are losing share in both Brazil and China and have no retail stores in India. In an effort to increase sales in Brazil, Wal-Mart is launching its “Everyday Low Price Strategy”. They also face stiff competition from Target who plans on opening up 150 locations in Canada in 2011 .

Problems with Wal-Mart de Mexico began in September of 2005 when a senior Wal-Mart lawyer was contacted by a former executive at Wal-Mart de Mexico. In the e-mail and follow-up conversations, the former executive (Later identified as the lawyer in charge of obtaining construction permits for Wal-Mart de Mexico) indicated that Wal-Mart de Mexico had paid bribes for permits throughout the country to fuel growth prospects. In response, Wal-Mart dispatched investigators to Mexico City. Those investigators found overwhelming evidence of bribery and hundreds of suspect payments...