Case Study Of Globalization Strategy Of Walmart

Walmart is bad for America, as some say. The Globalization essay that was handed out in class had many good points. It states that Walmart puts many smaller businesses out of service. A recent study by

Walmart faced strong entrenched competition in Canada and Europe. In these developed countries, they couldn’t gain critical mass through internal growth, so they had to acquire companies that have been in the market already. They acquired Woolco, a money losing operation, applied many of the American business practices, and within a few years, the Canadian operations were successful. They have 317 stores, and they account for more than 35 percent of the Canadian discount and department store market. In Europe, Walmart entered Germany by acquiring the Wertkauf hypermarket chain in 1998 and entered the UK by acquiring the 229-store ASDA group. They the leader and are now losing ground to Tesco. A major problem for Walmart in the European market is overexpansion. Accompanied with the famous “Always low prices” approach, they met large resistance from the competition and regulators. Large price wars began because Walmart was accused of underselling the competition. They struggled to build a strong competitive base in German losing more than $1 billion. They were unable to create a competitive advantage, so they sold their operations to a competitor, Metro. They also faced problems in Korea, so

Wal-Mart has preferred to expand internationally by buying existing operations and converting them to Wal-Mart stores. The company entered Canada by purchasing the Woolco chain that was competing with Kmart in that market, and it entered Mexico in much the same way. The company entered Europe by purchasing the Asda stores in the United Kingdom and an operation in Germany that later failed. Wal-Mart entered foreign markets via acquisition for a couple of reasons. The first is that the company relies on real estate as the cornerstone of its business. The second is that as a cost leader, Wal-Mart needed to build up economies of scale that would allow it to enjoy strong bargaining power in these markets immediately. Moreover, moving rapidly into a market minimizing the ability of competitors to register an adequate response.

Within less than 30 years, Wal-Mart had transformed from a small rural retailer in Arkansas into the largest retailer in the U.S. In order to continue this rapid growth, the company had started to pursue international expansion grounded in the belief that the firm’s business model of offering quality products at low prices and great customer service would appeal to consumers everywhere around the world (p.8)[1]. China was of particular interest in going international as Wal-Mart’s top management held the opinion that it was the only market in which the firm’s success story in the U.S. could be repeated (p.2/8). However, in 2005 (nine years after its

Having strong presence in the retail industry, the firm expanded business to offer second hand car. The firm leverage on its competencies to provide its own product to consumer. Also, Wal-Mart works heavily with its suppliers. This symbiotic relationship can be seen as vertical integration due to the level at which Wal-Mart analyses its suppliers and improves their manufacturing processes. Wal-Mart definitely has the business strategy of Low Cost Leadership. They do nothing to really differentiate themselves from competitors and provide no-frills self-service stores that always provide the lowest prices. Wal-Mart has built enough clout with suppliers that they can dictate the prices and go in and change suppliers manufacturing processes in order to wring out more and more savings for the consumer.

Walmart is good for America because, they give higher pay, they have the best prices for everyone, and reach out globally to make better offers. They take much care of their craft. Personal experiences with Walmart have been positive. Seldom has a problem not been solved within minutes, a price not satisfying, or a cheaper option overseas not taken. They know what they’re doing, and we benefit because of that. It’s excellent to have such a widely available system that so many people can

The company uses foreign labor, including child workers, and sweatshops. This creates a hard life for those who are forced to meet Walmart’s needs. The company has been accused of paying officials in foreign companies in order to keep many details silent. But, we cannot know if those allegations are

Market Development. Walmart uses market development as its secondary intensive strategy for growth. This intensive growth strategy involves entering new markets to sell to consumers other than those that the company currently has.

Walmart is one of the biggest companies in the world, but it also has extremely tough competitors. Currently Walmart is the largest retailer in most countries of the world for numerous reasons. For one, they supply a wide variety of items to be purchased that include entertainment, groceries, health and wellness, hardware, furnishing, apparel and many more. Walmart also has over 11,100 stores in over 27 countries according to Market Realist. These two reasons alone give Walmart a huge advantage over its’ competitors. Walmart has both strengths and weaknesses when it comes to its’ competitors not only across the nation, but across the world as well. Some of the main domestic competitors of Wal-mart consist of Target, Costco, Amazon, and the dollar store trinity. Along with that, Walmart has international competition such as Carrefour in France, Metro in Germany, Tesco in the United Kingdom, Loblaw Companies in Canada, and Ahold in the Netherlands. Although Walmart has competitors with all of these companies worldwide, it still remains the “#1 retailer in Canada and Mexico and has operations in Asia (where it owns a 95% stake in Japanese retailer SEIYU ), Africa, Europe, and Latin America”, according to Hoovers. Strangely enough, Walmart is growing more overseas than it is in the United States. Even with all these companies it has to compete with, Wal-mart’s total sales are still almost 5 times its’ competitors. As it generates a net sale of over $483 billion in one year,

Is Wal-Mart a great move for the United States? As a consumer myself I like to believe that I am concern with what makes America grow and has a passion to help communities improve. With several decades invested with such low prices this explains why Wal-Mart has used the strategy to be a multinational corporation. According to Webster a multinational corporation “is a business that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate

In just over half a century Wal-Mart’s global reach had gone from just one store all the way to 11,450 stores in 27 countries. This is one way of saying that Wal-Mart is a multinational company and that its globalisation is only limited by its host’s country. The current increase in globalisation has accelerated due to the rapid growth of multinational companies such as Wal-Mart.

Walmart has promised to create more American jobs by supporting more American manufacturing. Also, Walmart has pledged to purchase approximately $250 billion in products, by 2023. It makes great economic sense for American’s economy for Walmart to shift from foreign goods to domestic goods.

Q2. How would you explain wal mart choice of countries during the early stages of international expansion in the 1990 's.

Ans:Wal-Mart,Inc runs a chain of large, discount department stores.it is the world’s largest public corporation by revenue. Walmart is the largest private employer and the largest grocery retailer in the United States. Walmart is one of the best known industries all over the world. Its concentration of a single business strategy is the basis of its success over the decades by this strategy without having to rely upon diversification to sustain its growth and competitive advantage. The leading marketing strategies of Wal-Mart are low prices, service and smile. However by adapting this strategy, it has risked itself by putting all of a company’s egg in one industry basket. While its global strategy worked elsewhere, the results were bad in Germany and Korea that Wal-Mart withdrew from those countries.

Walmart uses the backward expansion strategy to extend their geographical reach. The company is known for entering small, rural towns and saturates the area before entering the larger metropolitan areas. The international plan included new construction of buildings and acquisitions of existing buildings. In the foreign market Walmart attempts to match the culture and taste of local tradition. They employ locals in the area to manage the stores, so that local barriers can be reduced.