Mini Case 12.1 Q2
International Business
Wal-Mart’s success in Latin America and Canada was due to the fact that they could respond quickly to cultural errors such as creating a large parking lot in Mexico’s Wal-Mart when many customers used the bus. This was solved by creating bus shuttles to make customers’ travels across the parking lot easier. They were “easy to address” mistakes. It also changed its competitive emphasis to customer service and providing more variety in its stores than the competitors. They also bought other local stores for pursuit of internal growth. Wal-Mart also quickly learned that when expanding internationally sometimes it does not work in your favor to “stick so closely to the domestic Wal-Mart blueprint…”Latin American Wal-Marts also had large success because they were large developing nations where market entry was easier. Although Canada was a more matured nation than those of Latin America, Wal-Mart still thrived there and bought 122 Woolco stores and transition teams were also brought in from the U.S. to aid the transformation.
Entry was the hardest in Europe. Although Wal-Mart took a similar approach as they had in Canada ( by acquiring 95 chain stores in Germany and 229 stores in the United Kingdom), but the market was very advanced and competitive. This was true especially in Germany. Wal-Mart had a limited European infrastructure with too many U.S. employees who didn’t speak German. Wal-Mart’s well-known inventory and systematic specialties were also foreign to suppliers. Also, German customers were used to bagging their own goods, unlike American customs. Germany also demanded that Wal-Mart raise their low prices because it had contributed to starting a price war with illegally low costs. Wal-Mart Germany lost more than $1 billion and the CEO admitted that it was a “challenging market that we have not figured out” (in