Case Study #1: Wal-Mart’s Foreign Expansion
1. Do you think Wal-Mart could translate its merchandising strategy wholesale to another country and succeed? If not, why not?
I don’t think Wal-Mart could translate its merchandising strategy wholesale directly to another country and succeed. Because different countries have different cultures and backgrounds, in order to succeed in another country, it needs to adapt to these differences and find a way that best fits in the local market. Apparently, the “U.S. style” does not work for all the countries. For example, Wal-Mart is famous for its low price strategy in the U.S. However, when it shifted its store with the same strategy to Germany and South Korea, it soon failed. People in the countries like Germany or South Korea do not care about the low prices as much as its target consumers in the U.S. do. What they care the most is if the store has higher quality products. So whether succeed in another country or not really depends on how well Wal-Mart understands the local consumer buying behaviors and how much they could change its merchandising strategy to fit in. As mentioned in the case, Wal-Mart hired local managers who knows well about Mexican culture to run the store, while built smaller stores with fresh food products for Mexican consumers so that they could simply walk in and get what they want. By doing so, they successfully melt in the local market and started to influence Mexican’s shopping habits.
2. Why do you think Wal-Mart was successful in Mexico?
It is because Wal-Mart learned Mexicans’ unique shopping behaviors as soon as they launched in Mexico. They noticed that most of the Mexican consumers didn’t have a car so that unlike their American consumers who prefer driving to the store and purchase a large quantity every time they shop, Mexican consumers would rather to walk to the store. Also Wal-Mart found out that Mexican consumers like to buy fresh merchandise such as meat, since they usually...
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