International Supply Chain: Wal-Mart Case Study

Wal-Mart is a brand that is well known around the world, especially in the USA. It has gradually developed into the largest retailer in the world. Wal-Mart’s globalization efforts have been happening rapidly. But have they been successful in all aspects of their international expansion or not? This is the main thought that is going to be discussed in this essay. The questions I will be looking at are based on a case called “Wal-Mart takes on the world” from the book of International Business The Challenge of Global Competition eleventh edition – Ball, McCulloch, Geringer, Minor, and McNett. Questions are the following:

As the world’s largest retail store in the world, Walmart wants to be in every market that they can be prosperous in. They know they rule the United States market, so why not try to expand overseas and dominate those markets as well. Now that they have reached limits on expansion here in the U.S., the next step was to test the water in other nations. As they began to go international, there were many critics saying they will never make it because their business practices and culture wouldn’t work in other countries. Yet the company’s globalization efforts progressed at a rapid pace. Its more than 4,263 international retail units employ more than 660,000

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

Since 1962 and the beginning of the discount retailer market Wal-Mart has been ahead of the retail game. By 1967 there were 24 Wal-Marts that had grossed 12.6 million dollars. In just 7 years Wal-mart had spread into 9 states. By 1979 Wal-Mart was the fastest store to reach a billion dollars in sales. In 2005 Wal-Mart has 3,800 domestic stores along with 3,800 stores internationally, and had made over 312 billion dollars. As you can see the Wal-Mart empire has grown monumentally. To move into this segment of the market would be tough.

The evolution of Wal-mart from the early 1960s to the present day has set a benchmark that few can achieve. Wal-mart executives have been successful nationally as well as globally. The knowledge and expertise in economics have made Wal-mart a global giant. The research completed is the final recommendations by the members of research team C and will address questions regarding global competition and issues of the organizations ability to expand or reduce current operations.

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.

In very much the same way Walmart is poised as the lion where we- substituted into the equation-are its' prey; existing solely to instill energy and fuel the power hungry lion that Walmart consists of. Replacing the surrounding wildlife are the small businesses that originated and had once prospered within the community; now starving and unsuccessfully surviving off of the scraps of leftover business Walmart so graciously provides. Perhaps your favourite bakery or coffee shop suddenly, out of nowhere was closed down briefly after the opening of a Walmart in the nearby vicinity. Now you know why.

5. International Growth- The video pointed out that internationally Wal-Mart has just scratched the surface and has lots of room for growth. Expect to hear more from Wal-Mart about where we’re going in emerging markets like India and China (Gogoi, 2007). Wal-Mart is committed to being a global company and feels like expanding internationally will drive growth and hopes to add 500,000 jobs worldwide in within the next 5 years (Clifford & Rosenbloom, 2010). Brazil,

Wal-Mart is one of the top 10 largest corporations. Wal-Mart must predict what is needed and wanted in communities. Executives have to be able to see the needs like in Brazil. Wal-Mart has gone in and created social retailing school and provide skills and services in

4.Given the 4 areas of the company, choose some supply chain processes and suggest appropriate performance metrics.

Wal-Mart’s sheer size gives it unrestrained economic power which allows it to drive down costs in the retail and manufacturing sectors and to enact its own standards with regards to its work force.

Wal-Mart is the number one retailer in the world in both sales and earnings, dwarfing many of its retail competitors. It offers a full assortment of products ranging from clothing to electronics. It currently has 6000 locations predominately within the United States with over $312.4 Billion in net sales during 2006. In addition to its strong domestic presence, Wal-Mart has expanded aggressively to Canada, Mexico, and Puerto Rico with over 1000 locations within those countries. This expansion can potentially create greater economies of scale for Wal-Mart services and merchandise. The synergies created by expansion will also drive profitability in the future by providing goods and services at even lower costs to consumers. In order to enter foreign markets successful, Wal-Mart engages in both joint ventures and acquisitions. By utilizing this method, Wal-Mart intends to leverage foreign retailer's market knowledge with its own core competencies of merchandising and supply chain management (Stilgoe, 2003).

Wal-Mart is arguably the most dynamic corporation in the last 50 years in the United States, if not the world. Arising from its beginnings in Bentonville, Arkansas, it has grown to over 4,400 discount stores, super centers and corner markets worldwide. Wal-Mart continues to expand despite public criticism of its labor practices as well as complaints about their treatment of competitors. The many strengths of Wal-Mart, like their low cost production and marketing practices, will aid Wal-Mart as it continues to grow in the retail

     When you talk about Wal-Mart the first thing that you have to remember is that they are the largest retailer in the world. Wal-Mart employs more people in the United States than any other company and is second only to the federal government in the number of employees that they have on the payroll. These are important facts to consider in that due to their tremendous size, Wal-Mart has an enormous