Globalization of Wal-Mart
Ye Myint Tun
California Mirama University
Case Study 1: Globalization of Wal-Mart
Please refer to the Mini-Case 9.1, “The Globalization of Wal-Mart” on page 251 and answer the following questions: 1. Why has Wal-Mart viewed international expansion as a critical part of its strategy? International expansion is different from the domestic expansion because geography areas, culture, tradition, behaviors and characteristics of the consumers are not similar, thus the management, concepts and strategies will be different in the expansion of international markets. The strategy will have to be careful according to the culture, geography and behaviors of the customers. Wal-Mart has taken this expansion as critical part of its strategy to achieve the goal in its targeted markets. The strategies should be drawn out with serious consideration and discussion to be fit into targeted geographic areas. Since they are taken as critical part, it is not surprising that Wal-Mart has been working on the right path of strategies and concepts to reach to the succeed. 2. What did Wal-Mart do to enable the company to achieve success in Canada and Latin America? Why did Wal-Mart fail to achieve similar success in Europe? Wal-Mart is able to reach its goal in Canada and Latin America rather than in Europe. Canada and Latin America are the neighbor countries of the United States of America and regarding to culture and geographic area, the individuals have the similar behaviors and characteristics rather than different culture and geographic distant areas. Besides, neighbor countries will have better opportunities for the market situation and the size of population. The resources for organizational, managerial and financial could be pursed in these regions rather than in the European countries. In European countries, the size of market is large but it will be hard to get market share from the already existing competitors and corporations. To go with the low risk level, it is better to go to Americas as the first focus to pursue a very deliberate entry strategy for the emerging markets. Therefore, going to Americas have more percentage of success not only because of population size and market situation but also because of culture and near geographic areas. 3. What should Wall-Mart do—or not do—to help ensure that the company achieves success in China and India? Since China and India are in the distinct countries which both have higher population in Asia, the potential markets are huge deals for Wal-Mart. It is necessary to understand the culture, tradition, behaviors and characteristics of individuals, and geographical areas of the targeted market regions. Wal-Mart could face failure in the markets of China and India because of the following factors, so Wal-Mart needs to be careful to be concerned for these factors. Lack of Local Consumer Insights
Destination Category: Asian consumers cook their meals almost every day and their food requires freshness. Wal-Mart food is not fresh enough handcuffed by their operation strategy of 'No promotion' and 'Inflexibility of operation'. Assortment: Same products could not make local consumers attraction with excitement, so it is necessary to attract with some new products or offers for local consumers. Value Equation: Cheaper price may mean lower quality. Universally true, but it may play stronger in Asian countries. Shopping Experience: It is more than buying stuff. Consumer's desired experience was finding treasures in unique environment. Failure to deliver THE experience could lead to the failure of Wal-Mart as well. Failure in Targeting
Wal-Mart should have targeted upper classes vs. lower income consumers like in U.S. At its infancy of modern retail like it was in South Korea when mom and pop stores are still dominant, Wal-Mart Hyper store format is very new and high class experience. Expectation gap involves among its target...
Please join StudyMode to read the full document