MSc International Business and Management

The Dynamics of Market Entry and Expansion Strategy in Emerging Markets: The Case of Wal-Mart in Latin America

Dino Ovcina

Author: Dino Ovcina Supervisor: Dr. Jeremy A Head

Institution: Sheffield Business School at Sheffield Hallam University Program: MSc International Business and Management Module: Dissertation

Date of Submission: 21 April, 2010

Abstract

This research investigates the internationalization process and potential issues related to market entry and expansion strategies. It focuses on Wal-Mart's entry and expansion strategies into the Emerging Markets of Latin America, and discusses the different entry and expansion decisions being made by the company. Furthermore, the research critically evaluates the dynamic challenges facing developed country firms in their market entry and expansion strategies in emerging markets. Its contribution to the existing literature is its focus on the dynamics of entry modes in emerging markets. The research, based on an inductive approach, has been conducted as a case study by the use of secondary data. Wal-Mart began its internationalization by entering the two geographically nearest markets, namely Mexico and Canada. The entry into Mexico, which occurred 1991, was the first strategic move aiming at reaching the company’s overall goal of becoming the leading player in Latin America. Mexico together with Brazil are the two main emerging markets of Latin America characterized by a high growth potential on one hand, but a risky economic and political environment on the other. However, in the 1990s the economic and political environment became more stabilized, leading to an increased targeting by developed country retailers such as Wal-Mart. Due to the cultural differences, different consumer preference and only recently stabilized economic and political