...1 How does expanding internationally benefit Walmart? After its beginning in 1962 Walmart ever since had constant growth rates and successfully gained market share in the merchandise and food retailing markets. “By 1990, however, Walmart realized that its opportunities for growth in the United States were becoming more limited”. To keep steady growth rates and profits the company decided to expand globally. The core competency of Walmart is the price. Selling merchandise and food for low prices made them earn market shares and continue the growth rates. Going global gives companies the opportunity of using location economies to secure the quality, use economy of scale to lower the productions costs per unit and benefit from learning effects. A global supply chain and global markets will lower the production costs since more volume is ordered following a higher demand trough international markets. Especially for Walmart expanding internationally supports and secures their core competency: Selling everyday life goods at a low price. 2 What are the risks that Walmart faces when entering other retail markets? How can these risks be mitigated? The strategy for success worked very well in the United States. That does not mean that it works very well in other countries. There are different preferences and consumer patterns in different countries. Adding to that Walmart may face strong competition from already established retailers that have a better understanding in local needs...
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...WAL-MART’S GLOBAL EXPANSION This report explores Wal-Mart’s global expansion plan in an environment where businesses have to adapt to the fast pace of change and cope with the challenges that are implicit in the emergence of an increasingly complex global economy. Principally, Wal-Mart grew to where it is today through the vision of its founder, Sam Walton. Over the years, it serves the needs of the community where it exists well. However, when it brings it business abroad, this report has identified three (3) key issues. It was obvious that the Supply Chain Management system which was successfully implemented back home is not so business friendly when it goes abroad. Furthermore, doing business in a foreign land means more than just providing goods which it thought was best for them. Cultural understanding plays an important role in the case of Wal-Mart as it faces many uphill tasks in dealing with sub-cultures that belongs to the communities. As we have found out from the analysis, pricing and discounting strategy is a key area that hobble Wal-Mart’s global expansion plan. What works in the home country generally may not necessary work in the host country. Wal-Mart boosts its reputation with a well established supply chain management and a pool of highly trained employees which they called ‘associates’. Perhaps one of its more obvious strengths is the strong branding that it has in association with high quality, low price products. Having said, its global expansion is still...
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...Established in Arkansas in 1962 by Sam Walton, over the last four decades Wal-Mart has grown rapidly to become the largest retailer in the world with 2004 sales of $280 billion, 1.5 million employees, and more than 4500 stores. Until 1991, Wal-Mart’s operations were confined to the United States. There it established a competitive advantage based upon a combination of efficient merchandising, buying power, and human relations policies. Among other things, Wal-Mart was a leader in the implementation of information systems to track product sales and inventory, developed one of the most efficient distribution systems in the world, and was one of the first companies to promote widespread stock ownership among employees. These practices led to high productivity that enabled Wal-Mart to drive down its operation costs, which it passed on to consumers in the form of everyday low prices, a strategy that enabled the company to gain market share first in general merchandising, where it now dominates, and later in food retailing, where it is taking market share from established supermarkets. By 1990, however, Wal-Mart realized that its opportunities for growth in the United States were becoming more limited. Management calculated that by the early 2000s, domestic growth opportunities would be constrained due to market saturation. So the company decided to expand globally. In 1991 Wal-Mart started to expand internationally with the opening of its first stores in Mexico. The Mexican operation...
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...Abstract Walmart is one of the world’s largest and most well-known retailers in the world today. It has achieved great success in areas like Mexico and Canada; however it has also seen failures in other areas like Germany and Hong Kong. This paper will discuss a brief history of Walmart’s global expansions and the strategies it chose to enter these markets. It will answer the following specific questions: When did Walmart enter the global expansion? What international markets did Walmart enter? What cultural challenges has Walmart faced? How did Walmart overcome these challenges? Where future expansions and opportunities are possible? To answer these questions, this paper will have four basic sections: A brief history of Walmart’s global expansion, what was their strategy with each expansion, cultural differences they faced, and where is Walmart going in the future. This paper will attempt to examine the strategies of its global expansion and how it used the challenges to continue success in future expansions. Walmart is the most well-known and largest retailer in the world today; with sales worth more than $200 billion, $35 billion of that from Walmart’s International Division. The company grew incredibly fast both in the United States and abroad. By tweaking entry modes, and studying the cultural differences and local threats, the core business strategies Walmart chose to build its business on in America would prove a great success in other countries...
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...African Expansion Case Study 2 Case Study Author: Karen Robson, Stefanie Beninger Presented to: Dr. Doreen Sams Analyst Name: Joe Slade Date Submitted: September 28, 2014 Contents Introduction 1 The Eclectic Paradigm and African Expansion 2 Conclusion 3 References: 4 Introduction Walmart had humble beginnings. The first store was opened in Rogers Arkansas in 1962 by Sam Walton. Sam Walton wanted to have a store that provided as many items as possible but doing so in a low price way. By 1967 the Walton family owned 24 stores, ringing up $12.7 million in sales. During 1970, Walmart went public. In 1972 the company was listed on the New York Stock exchange. By 1980 the company had 276 stores in 11 states under the Wal-Mart banner. Through a joint venture with Cifra, a Mexican retail company, Walmart went global, opening a Sam’s Club in Mexico City in 199. This marked the first foray into global expansion (Walmart Corporate Site, 2014). However, not all expansion into foreign countries went well. When Walmart decided to enter the German market in 1997, they did so by buying two retail store chains, Werkauf and Interspar. This was a difficult expansion process as neither one of these companies operated like Walmart. Walmart had issues with their distribution network and the German people were not used to shopping at a big box store like Walmart (Robson, Beninger, 2013). This did not deter Walmart into the global expansion, they continued...
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...Walmart’s Global Strategies Jennifer D. Wright National American University: Management Across Cultures 1 March 2015 Abstract Walmart is one of the world’s largest and most well-known retailers in the world today. It has achieved great success in areas like Mexico and Canada; however it has also seen failures in other areas like Germany and Hong Kong. This paper will discuss a brief history of Walmart’s global expansions and the strategies it chose to enter these markets. It will answer the following specific questions: When did Walmart enter the global expansion? What international markets did Walmart enter? What cultural challenges has Walmart faced? How did Walmart overcome these challenges? Where future expansions and opportunities are possible? To answer these questions, this paper will have four basic sections: A brief history of Walmart’s global expansion, what was their strategy with each expansion, cultural differences they faced, and where is Walmart going in the future. This paper will attempt to examine the strategies of its global expansion and how it used the challenges to continue success in future expansions. Walmart is the most well-known and largest retailer in the world today; with sales worth more than $200 billion, $35 billion of that from Walmart’s International Division. The company grew incredibly fast both in the United States and abroad. By tweaking entry modes, and studying the cultural differences and local threats...
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...WALMART SUCCESS IN MEXICO, CANADA AND CHINA: GLOBAL EXPANSION, STRATEGIES, ENTRY MODES, THREATS AND OPPORTUNITIES Lee Yee Mun B1000922 Help College Of Arts and Technology Bachelor of Science in Collaboration with Southern New Hampshire University, USA lemon_0611@hotmail.com Rashad Yazdanifard Faculty of Management, Multimedia University, Cyberjaya, Malaysia. rashadyazdanifard@yahoo.com 1 ABSTRACT Global expansion has been gaining a lot of attention. There are many important factors to be considered in the decision-making process such as business strategies, entry modes, and threats and opportunities in the markets. Appropriate strategies will minimize the risk of failure in international markets. The right business strategies and entry modes employed will increase the firm’s chances of success and influence the future of the retailer. Key words: global expansion, business strategies, entry modes, threats, opportunities, Walmart 1. Introduction The internalization of the retail industry has been researched widely, and majority of these studies have described the motivations and scales for international expansion by retailers (Akehurst & Alexander, 1995; Williams, 1992). Many models of internalization explains the sequence of foreign expansion, showing that companies who go international will do better in foreign markets that are similar to their domestic markets. This was why Walmart chose to enter the markets of Canada and Mexico (Johanson...
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...statement for Walmart is a simple statement to focus on consumer needs. “We save people money so they can live better. If we work together, we’ll lower the cost of living for everyone we’ll give the world an opportunity to see what it is like to save and have a better life”(Walton S.) Walmart’s company culture includes a list of values and beliefs it establishes through its management and employee relations. The company’s marketing efforts are to establish awareness that they are the price leaders in their market. In recent times, the company has focus on becoming involved more in local communities by charity and service. With the general instability of the global economy, corporations like to play it safe; Walmart is an example of a multinational which is making a bold move. Acquiring South African grocery chain Massmart offered Walmart a safe foothold to prepare for the next step, which is continental expansion. South Africa is arguably the most westernized country in Africa. Western companies in general perceive it as easier to do business there than in other African nations. II. SWOT ANALYSIS The SWOT analysis of Walmart shows that the company can have higher long-term success potential through aggressive global expansion, especially in retail markets in developing countries. Strengths: Walmart’s strengths are all related to the size of its business. These strengths enable the company to withstand threats despite its weaknesses. Walmart’s strengths for further global growth...
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...Walmart’s Successful Globalization Into The Chinese Market Stanley Armstrong Southern New Hampshire University Abstract There has been an increasing enthrallment over global expansion across the globe. Likewise, there are many things that factor into making such an enormous decision a successful one. Some of these factors include, the strategies to which the business will use, what modes of entry they will take, and what are possible threats and opportunities that may arise. Choosing the right strategy to enter into a new market is key in determining the success of the company now and in the future. I. Introduction “Walmart Stores, Inc. was founded by American retail legend Mr. Sam Walton in Arkansas in 1962. Over nearly 50 years of development, the company has served customers and is now the world’s largest private employer and retailer, on the top of the Fortune 500 list. Walmart is among the most recognized global brands.” (Walmart China Factsheet) II. Global Expansion Lately, many large companies within the retail division who seek to increase their profits and hold a greater market share have decided to expand their companies globally. Global expansion has grown to the point where its not only attacking large companies, but has increased the efforts of those small-scale companies, those who are foreign to expanding internationally, and even those who have already ventured into international markets. There have been...
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...Walmart: Global Strategic Expansion - Executive Summary Since introducing its first international store in 1991, Walmart has transformed itself from an American retail giant into a global one, leveraging a wealth of resources to strategically expand operations. Although Walmart must contend with several formidable competitors, the retailer has successfully opened thousands of stores across the globe; most frequently, it has added international units through the acquisition of foreign retailers, which simultaneously reduces its competition and furthers its dominance. Walmart has differentiated itself by coupling its understanding of political, economic, legal, and cultural systems within target markets with its low-cost, high-quality approach to mass retail. Utilizing simultaneous strategic multiple thrusts, Walmart has developed layers of competitive advantage to establish itself as the world’s leading retailer. Focusing on strategic expansion, Walmart currently operates 9,826 stores across twenty-eight countries, allowing it to capture global scale efficiencies by creating a coordinated and integrated network of interdependent stores. Each unit within its network is regarded as a source of ideas and capabilities, and innovation is diffused across the company through initiatives such as a market-by-market training program that helps increase the company’s responsiveness to local demands and preferences. Thus, Walmart has established itself as a transnational corporation by developing...
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...Compare and contrast the strategies of Carrefour and Walmart in the Chinese market Although the whole world has been affected by global recession, China’s economy still grows in a rapid rate compared with other countries’. Furthermore, the expansion of China’s retail market has attracted world’s largest retailers, Walmart and Carrefour, to pile in. The expansion strategies of the two global retailers seem to play a crucial role in the competition in China. Thus both similarities and differences of strategies are worth considering and will be respectively analyzed in the essay. One of the most significant similarities of Walmart and Carrefour’s strategies is that both of them learn about the diversity of regions and customers. Ed Chan, the Walmart China’s CEO, pointed out that not only income level, but also customer preferences were affected by the regional diversity (McKinsey Quarterly, 2009). It suggests that from coastal area to inland regions, the economy is less developed and the income level is accordingly lower. As a result, customer preferences vary from the eastern to the western part of China (McKinsey Quarterly, 2009). Similarly, Carrefour treats coastal and inland customers respectively to adapt to region differences in China. For instance, live fish is displayed to customers in fresh area but frozen fish is sold to people in vast regions according to the diversity of their preferences (Child, 2006). Another similarity is that in addition to coastal cities...
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...A Comparative Study of Walmart Operations in Canada & Mexico Table of Contents 1. Executive Summary…………………………...………………………………...…...2 2. Introduction………………………………………………………………………….3 3. Walmart and the Canadian Marketplace……………………………..…………3 A. Country Competitiveness B. Cultural Environment C. Political and Legal Environment D. Entry Strategies 4. Walmart and the Mexican Marketplace……………………………..………….10 A. Country Competitiveness B. Cultural Environment C. Political and Legal Environment D. Entry Strategies 5. Summary Comparison of Canadian and Mexican Markets…………………….18 6. Recommendation…………………………………………………………………….19 7. References…………………………………………………………………………...21 1. Executive Summary This report closely examines the operations of the world's largest retailer, Walmart, in Canada and Mexico. Assessments of market conditions in both countries have been conducted in terms of country competitiveness, cultural, political and legal environments and the strategies used by Walmart upon entry. Tying into these international business factors, specific aspects of international economic integration, monetary systems, social responsibility and corruption have also been reviewed. While being part of one continent and a common trade bloc (NAFTA, the North American Free Trade Agreement), considerable differences between Canada and Mexico are apparent. These differences are individually analyzed on the following pages. Inevitably, they...
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...Context: 1. Introduction 2 2. Background of Wal-Mart stores Inc. 3 3. Retail organization internatinalization expension 4 4. International Expansion of Wal-Mart in Maxico,china and canada 5 5. Comparison of Entry Modes 6 6. comparison of Opportunities 7 7. Final touch 8 8. Conclusion 9 9.Bibliography 10 1. Introduction: Being present and having to enter foreign markets is for many companies natural, while for other it is a new challenge that they have to face. This challenge, known as market entry, consists of three major decisions: where to enter, when to enter and how to enter different markets. Some companies are forced to internationalize in the early stages of their life due to small saturated home markets, while other companies choose to go abroad because of the great opportunities new markets might bring (Peng, 2006). Once deciding to go abroad and choosing the target market and timing, companies' need to consider the choice of entry modes. Generally, to choose international firm there are six different entry modes: exporting, turnkey projects, licensing, franchising, joint ventures, wholly owned subsidiary (Hill, 2004). Each entry mode its distinctive characteristics (see, e.g., Hill, 2004; Hill, et al, 1990; Hill and kim, 1988; Anderson and Gatignon, 1986; Madhok, 1997; Brouthers and Brouthers, 2000; Bishop 2006. Selecting a suitable entry mode is a difficult decision for firms interested in entering a foreign market (Agarwal and Ramaswami, 1992). Sometimes...
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...successful business. The modest beginnings and impressive 50-year growth of Walmart Stores, Inc. are an example of such practice. Walmart Stores, Inc. reflects decades of continued positive return for investors in its annual report and presents a five-tiered strategic plan. The Walmart Store, Inc. 2012 Annual Report lists these initiatives as ―1) Developing our people; 2) Driving the productivity loop; 3) Winning in Global ecommerce; 4) Reinvigorating our customer-focused culture; and 5) Leading on social and environmental issues (p. 3). This essay will focus on two initiatives driving the productivity loop and reinvigorating our customer-focused culture. These two initiatives are tied to short-term and long-term financial concerns, and expansion strategies. The following details the organization’s financial planning surrounding the initiatives, the risks involved in the ideas, and the effect on revenues and expenses. Driving the Productivity Loop With strategic planning the team determines where to spend money for expansion, cut costs to reduces expenses, and invest profit for sustainably. Supporting this framework is the short-term and long-term financial plans a successful business needs to operate. According to Titman, Keown, and Martin (2011), the primary objective of both short- and long-range financial planning is the estimation of the firm’s future financing needs (p. 564). In the case of Walmart, these financial goals and reviews are based on a positive record of providing...
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...Walmart’s Global Expansion 1.How does expanding internationally benefit walmart? Wal-Mart needed international expansion critically to remain a successful company. The main reason Wal-Mart needed to go global was because they could no longer achieve the growth needed in the US. This market was saturated. The United States represents only four percent of the world’s population, which meant Wal-Mart was missing out on ninety-six percent of the world’s potential customers. (Govindarajan, par. 7) Also, Wal-Mart needed to continue to make their US employees satisfied. With Wal-Mart’s aggressive stock purchasing programs, this meant that employee satisfaction was directly correlated to their stock prices. Walmart also realized that there were many emerging markets with lower levels of disposable income, which offered a large potential for discount retailers. (Govindarajan, par. 7) Therefore, Wal-Mart’s only option to achieve the growth needed was to enter the global environment. After its beginning in 1962 Walmart ever since had constant growth rates and successfully gained market share in the merchandise and food retailing markets. “By 1990, however, Walmart realized that its opportunities for growth in the United States were becoming more limited”. To keep steady growth rates and profits the company decided to expand globally. The core competency of Walmart is the price. Selling merchandise and food for low prices made them earn market shares and continue the growth...
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