Wal-Mart is the leading company in retail markets worldwide, with a net sale of $ 344,992 million in 2007 (Wal-Mart, 2007). Recently, its one-day sales topped the GDPs of thirty-six sovereign countries.
“If it were a Independent Republic of Wal-Mart, it would be China’s sixth largest export market, and its economy would rank thirtieth in the world, right behind Saudi Arabia’s” (Moreton, 2006, 59)
Many would argue that Wal-Mart is “the face of retail globalization” (Helen, 2008, 10). Nevertheless, this multinational company had to struggle through testing times to reach this status.
The growth of any corporation is neither assured, nor a straightforward process – Wal-Mart’s development was not only connected with executive ambition, motivation, progression and new opportunities; but also inevitably uncertain times, unnecessary costs, legitimacy and resistance. This consequently lead to Wal-Mart’s failing in certain markets, and for this reason the board of directors need to comprehend why these different events occurred, as well as considering possible approaches to overcrossing certain barriers. This work takes a closer look at how Wal-Mart became so influential, which will be done through considering their history until present, and their strategy. Specifically discussed will be whether Wal-Mart adapted their global strategy in different countries, and if so, how such adaption was implemented.
Table of Contents
Introduction
The Company: Wal-Mart stores, Inc.
A brief History of Wal-Mart
Wal-Mart Today
The strategy of Wal-Mart
International expansion of Wal-Mart
Wal-Mart’s joint venture
Wal-Mart’s acquisitions
Wal-Mart’s grenfield investments
Conclusion
Objective & Topics
This paper examines how and why Wal-Mart successfully established its dominant international presence, analyzing the company's historical development and strategic implementation across diverse global markets while addressing challenges and failures in specific regions.
- Historical evolution of Wal-Mart from local store to global giant
- Analysis of core retail strategies including pricing and supply chain management
- Evaluation of international market entry modes: joint ventures, acquisitions, and greenfield investments
- Case studies on the impact of cultural and legal differences on corporate performance
- Critical assessment of management success and failures in foreign retail markets
Excerpt from the Book
Wal-Mart’s joint venture
Joint venture was taken for Mexico because it was geographically near to the home market, and in the beginning of the 90’s its economy recovered from stagnation, Subsequently, the retail sector grew fast; there were legal changes, an investment increase in this sector, and liberalising trade policy, all of which made Mexico attractive to enter. The joint venture (50%-50% alliance) in 1991 between Wal-Mart and Cifra was focused on introducing ‘Sam’s Club’ (Di Gregorio, 2008). Cifra operated Aurrera (food and household products), Superama supermarkets, Vips (restaurant division) and Suburbia (apparel stores). Over the next six years, these units became part of a joint venture. The success of the first Sam’s Club stores and the pending progress of the NAFTA encouraged Wal-Mart to achieve further shares and, until they finally bought Cifra out in 2000 (Tilly, 2006). Simuliarly, they bought the DeTodo business two years later, to transfer their store into a supercenter (Democrat-Gazette, 2008), and make Mexico one of the most profitable countries for Wal-Mart to date. The company decided to enter Mexico through a joint venture, because they used the existing distribution channels from Cifra to build on and to gain the partner’s local knowledge. To finance the joint venture, Cifra received mainly the debts load, another advantage for Wal-Marts joint venture was the rapid and extensive entry, Cifra was the leading retail company in Mexico, with less assets at stake and lower risk against the Greenfield investment, which were still restrict for foreigner at that time (DiGregorio, 2008).
Summary of Chapters
Introduction: Provides an overview of Wal-Mart's massive global scale and sets the research focus on understanding the strategic factors behind its international growth and adaptation.
The Company: Wal-Mart stores, Inc.: Traces the historical roots of the company, its expansion during the 1980s, and its contemporary operational segments.
International expansion of Wal-Mart: Analyzes the various entry modes utilized by the company for foreign expansion, focusing on joint ventures, acquisitions, and greenfield projects.
Conclusion: Summarizes the necessity for multinational enterprises to adapt to local cultural demands, noting Wal-Mart's mixed success due to varying levels of intercultural competence.
Keywords
Wal-Mart, International Business, Retail Globalization, Joint Venture, Acquisitions, Greenfield Investment, Corporate Strategy, Market Expansion, Supply Chain, Retail Management, Cultural Adaptation, Global Retailing, Emerging Markets, Financial Performance, Cross-cultural Competence
Frequently Asked Questions
What is the primary focus of this research paper?
The paper explores the internationalization strategy of Wal-Mart, specifically analyzing how the company established its global presence and the challenges it encountered in foreign markets.
What are the central themes discussed in the text?
Key themes include corporate history, the "everyday low price" strategy, entry modes like joint ventures and acquisitions, and the importance of cross-cultural adaptation in retail.
What is the core research objective?
The objective is to explain how Wal-Mart became influential globally and to determine whether it successfully adapted its strategy to fit different international countries.
Which methodology is applied in this study?
The author uses a qualitative analysis approach, examining historical company data, annual reports, and existing literature on management and international marketing to evaluate Wal-Mart's expansion.
What topics are covered in the main body?
The main body covers the company's history, its US business model, the specific use of joint ventures (e.g., in Mexico and India), acquisitions (e.g., in Germany and the UK), and organic growth through greenfield investments.
Which keywords best describe this work?
The work is characterized by terms such as retail globalization, international expansion, joint venture, and cross-cultural competence.
Why did Wal-Mart's entry into the German market fail?
The failure in Germany was attributed to strong local competition, a lack of cultural adaptation regarding customer service and staff behavior, and difficulties navigating restrictive local regulations.
What does the term "Thinking globally, Serving locally" imply for Wal-Mart?
It implies that while the company leverages its global scale and standardized systems, it attempts to tailor its operating formats and brand names to meet specific regional consumer needs.
- Citation du texte
- Marc Munzer (Auteur), 2008, How and why has Wal-Mart established its current international presence? An explanation, Munich, GRIN Verlag, https://www.grin.com/document/133691
