Wal-Mart Around the World

MGT 409 | Section 1

Wal-Mart Around the World

1.  According to the case study, Wal-Mart international division achieved net sales of 125.9 billion in 2012, however, it didn’t not have such success in every country they entered. Out of the first three countries that Wal-Mart tried to enter, two of them are in the same continent that have the most of the sales, as for the third country, Brazil, most analysts estimated that company’s operation weren’t profitable. Most of the retail struggles Wal-Mart had encountered were how to adapted to the culture. For example, when Wal-Mart entered Japan, it was trying to replicate its successful EDLP model and unfortunately failed at first, because Japanese believed that there’s a positive correlation between prices and the quality of the product. I think Wal-Mart’s strategy for international market is mature on some level with western markets, but not yet with Asian markets

1. First of all, location definitely is important when it comes to choose how to penetrate the market, different countries have different rules on how foreign company should enter the market. For example, Chinese government require foreign retailers built joint ventures with local partners, this regulation is beneficial for the local retailers, so they don’t get overwhelmed and crushed by international corporation like War-Mart, however, it’s not so good for War-Mart since it’s hard for them to adjust different culture. Personally, I think the best strategy of penetrating a market is through acquisitions, in this case, it gives War-Mart enough control while allowing them to adjust. In the case of Canada, Wart-Mart started off with acquiring 120 of 142 Woolco discount stores, and eventually overtook Metro as Canada’s third largest retailer

1. India is a country full of opportunities and potential customers, but also extremely complicated at the same time. I think we should take a look at the case of china since there are lots of similarities of these two countries. Wart-Mart entered Chinese market with joint-venture method, and it was a rough ride. The first location Wart-Mart choose to land is Shenzhen which is a fair choice, but not great. Even though Shenzhen is a Port City and also next to Hong Kong, it does not have the connection that Beijing has, I personally think War-Mart would gain a lot more sales if they decided to land in Beijing. To sum up, I think using joint-venture method to enter Indian market can be risky, but as long as they make the right decision on choosing the location, it should be a success.

1. The answer is yes, exploring new markets with carefully-chosen strategy is always good for the company. The purchasing power of customers in one country is going to be saturated eventually, and in order to lead the company to achieve another level, exploring other potential markets is the necessary step.