Walmart Worldwide

   The situation of Walmart’s international markets actually indicates the biggest problem that this retailer struggled – they mainly used the same strategy, which is Everyday Low Prices (EDLP) model and replicated what they successfully did in the United State market to international market. The fact is that they could not just copy their successful strategies and put them in other countries, because international customers have various needs and cultures. Walmart should think more locally. Such as Mexico where Walmart opened and built good market, they still used EDLP model in Mexico, but they abandoned the U.S.-style robotic distribution centers and hired low-cost labor force. Furthermore, location characteristics definitely explained the performance differences. For example, South Korean customers like luxurious, service oriented shopping experience more than low prices, and EDLP model could not work in this country. Thus, Walmart could not always be successful due to different local costumers’ different needs, shopping habits, cultures and so on.  

   There was no best entry mode for Walmart, because Walmart should choose the entry mode based on the local situation, and the location characteristics drive the mode of entry. Compared Chinese market and U.K. market, Walmart built both of these two markets successfully. However, Chinese regulations required foreign retailers to establish joint ventures with local partners, so Walmart had to chose join-venture mode. Walmart entered the U.K. through acquisition of a successful local retailer and became the second largest retailer in U.K.

   Choosing a joint-venture mode to enter the Indian market was a good idea for Walmart. Because Indian customers were price intensive, JV mode could help Walmart to make sure that 90% of sourcing of Bharti-Walmart would be from the local market and implement in short time. Meanwhile, the JV mode would help Walmart focus on local customer preferences, regional diversity and incorporating Indian values to avoid the culture conflict that they made in German.

   In general, there is no best way to enter a new market, because the way should conform to the location characteristics. The company should think about whether their strategy, business value, and commission meet local customers’ needs or not. If the local customers do not need low-price and high-quality products, the retailer eventually would not be successful in this place. Also, the company should analyze whether the competitors are too strong to enter the local market or not and whether their brand reputation are too high to be replaced or not.