Walmart Case Study

It is fascinating and mind-blowing how Wal-Mart moved up the ladder of success since 1962. In 1979, Wal-Mart had 229 discount stores, while its competitor, Kmart, had 1,981 stores. Within 25 years, Wal-Mart became the largest U.S. corporation in sales with over $405 billion in revenues. Wal-Mart became the industry leader because of different reasons, and the main reason is its ability to provide the lowest prices in the market. Looking at its domestic success, someone might assume that it has the same success across its national borders. However, as Forbes put it, “Overseas, Wal-Mart has won some, and lost a lot”. Analyzing the mixed success that Wal-Mart had internationally, there is no one reason behind it, reasons and factor of its success or failure internationally differ from one market to another. For example, in Japan, Japanese environment was hostile to large chains and protective of its small retailers. While in Germany, labor unions had plagued Wal-Mart’s entry along with unforeseen difficulties. Therefore, every market oversees has to be treated differently due to the differences in problems. To be able to fix that problem, Wal-Mart must slow the growth rate and expansion internationally and implement a transnational strategy.

According to Case 1-2, Wal-Mart’s international division is the fastest growing division, going from about $59 billion in sales in 2006 to over $100 billion in 2010. The problem with this fast growing rate is that problems and obstacles will rise quicker than usual. It becomes harder for a company to find solutions for problems in China, Japan, Brazil, Argentina and South Korea at the same time. However, with a slower growth rate, Wal-Mart could assure its success in those markets.

Lets take Hong Kong’s market for an example. The Japanese retailer, Yaohan, moved its headquarters from Tokyo to Hong Kong with the aim of becoming the world’s largest retailer. Helped by the close relationship between Chairman Kazuo Wada and...