Question

Discuss the successes and failures of Wal- Mart in various countries. What do the successes have in common; what do the failures have in common? Be specific. What can companies take away from this Wal-Mart example? Be specific. What can you learn from Wal-Mart and apply to your retailer in your chosen country? Be specific.

Answer 1

Wal-Mart was founded in 1962 by Sam Walton (1). Wal-Mart grew to two hundred seventy-six stores in their first decade of service (1). Wal-Mart’s plan was to sale products at low cost while delivering on outstanding service and customer relations (1). Wal-Mart also felt that they could target more customers if they offered convenient hours of business (1). Wal-Mart currently operates in fifteen countries around the world, supplying different needs, preferences and services depending on local retail habits (2). By servicing each geographic location in its own way and supplying the needs of a particular area they seem to do very well (2). Wal-Mart adjusts and adapts to local culture and serves the community in a way that the customers are accustomed to being served (2). Wal-Mart usually enters a foreign country by purchasing an existing chain and simply changing the name to Wal-Mart while retaining key personnel such as management who already know the culture (2). Wal-Mart spends lots of time researching and planning before entering a new market. It sometimes takes years to open in a new market overseas (Class notes). First they try to learn the culture, language, and habits of the citizens of a certain culture. Then they study the products which seem to do well in each different are and try to target these products for these cultures at low prices worldwide (Class notes). In the past two decades Wal-Mart has taken advantage of the internet technological advances to change the way many companies do business worldwide (3). The sheer size of Wal-Mart enables the company to buy in bulk at lower prices allowing the discount retail prices given to customers (3). Wal-Mart is able to by all products in great volumes and in return their supplier cuts some of the cost due the amount of product sold. Wal-Mart has great marketing and management plans before entering a market which allows the company to do very well in many different countries and cultures (3). Wal-Mart has also had a hand in helping manufactures realize the advantages of customer satisfaction through quality (3). Despite all of Wal-Mart’s international success they have also learned some valuable lessons, mainly in South Korea and probably the biggest debacle of all, Germany (Class notes). When Wal-Mart originally decided to move into Germany in 1997 the potential for success seemed quite promising (4). The company made their entrance into the German market by purchasing "Wertzkauf" which included twenty-one locations

Findings

Walmart has a significant presence in Mexico, the UK, Brazil, China and Canada. It has been successful in countries where it has adapted the Walmart model to the local market. International expansion for Walmart, along with other retailers, is now being highly impacted by the growth in online shopping. However, the use of technology for shopping is not a homogenous global experience. The increased demand for online retailers suggests that firms slow down (but not stop) brick and mortar international expansion.

Design/methodology/approach

Walmart’s successes and missteps in each country are analyzed. The studies looked at each country’s culture, shopping habits and discuss what worked and what did not in each country. The authors hope that managers planning international expansion will learn from the successes and failures of this giant retailer.

Practical implications

Considering the projected growth in online shopping, retailers with global aspirations need to have a strong and sustainable competitive advantage (e.g. products, operations, marketing and brand name reputation) in addition to a clear internationalization plan. The same factors critical to brick and mortar expansion are applicable to online growth. Having a successful, long-term presence in selected countries requires a clear understanding of each country’s infrastructure, demographics, political and economic systems, in addition to cultural awareness and an understanding of shopping practices