Lesson from Walmart

MKT 4443 -- International Marketing

Assignment # 3

Your Section # 1

892734651

Lessons from Wal-Mart

1a) (5 pts) Use the framework of this module to articulate the major global marketing issue(s) your article discusses?

The major issue being discussed in the article “After Early Errors, Wal-Mart Thinks Locally to Act Globally” is just how to extend Wal-Mart’s legendary dominance across the globe. Early on the retail giant made a number of mistakes in its international attempt at dominance, and there were many reasons for this; however, the main reason was because of their business strategy. The company mistakenly went into international markets, like Brazil, with a control posture. In other words, Wal-Mart went into Brazil thinking that their firm specific advantages, the layout of the store and prices, combined with their know-how would lead to a concrete winning formula in these new markets; however, that was not the case. Markets like in Sao Paulo, for instance, “proved inhospitable to the kind of vast stores with which Wal-Mart [dominated] in the American suburbs.” In other words, Wal-Mart did not take into account the local markets or “the fundamental local nature of retailing.”

Another issue that is brought up in the article is that “established competitors have greater scale and stronger relationships with local suppliers, which sometimes allows them to buy fresh groceries and regional food brands at lower prices.” This brings up an issue that is brought up in Chapter 4 about domestic competitors and how they will sometimes covertly or overtly put pressure on businesses to stay loyal to their domestic companies. Wal-Mart needs to figure out a way to “cater to local tastes for native products that are not popular elsewhere, while still making the most of the global purchasing might that lets it squeeze down its costs.”

1b) (5 pts) What ideas does the article suggest to address these marketing issues?

In order to address some of the issues raised above, the article points out that Wal-Mart learned that “one size does not fit all.” In other words, Wal-Mart realized that it had to take a step back and go with a more relaxed entry strategy and a protected strategic posture. One that takes into account their patentable know-how and firm specific advantages that have potential internationally, but also accounts for the need to learn about the market and develop more local familiarity.

Instead of going into new markets with their