REPORT ON CASE STUDY: Wal-Mart in Japan
Question 1: How would you characterize Wal-Mart’s approach to global management? The trademark of Wal-Mart’s global management approach focuses on 3 main strategies: low price, best value, large selection of goods & high quality service. Being the world’s largest retailer, Wal-Mart will enter the international market by providing a wide variety of products at a lower price than its domestic competitors. In addition, one of the common strategies of Wal-Mart is to partner or acquire a local supermarket retailer who has already had a good knowledge of the market in order to save time & money. Wal-Mart is also famous for its great use of distributor network. They pay a lot of attention to choosing a good location when expanding their business, a strategy which has been proven successful in its original US market. Question 2: Do you agree with Wal-Mart’s entry strategy in Japan? What are some of the inherent risks? Do you think that a faster market entry would be more effective? In my opinion, Wal-Mart’s entry strategy in Japan (slow-and-steady) is quite appropriate with Japanese retail environment and economic situation. However, there are many challenges need to be overcome in this potential market: 1. Socio-cultural Differences: In Japan, consumers often equate bad quality with low price. Changing consumer perceptions is not easy or cheap. In addition, Japanese customers demand a quick entry and exit from the stores which makes cutting costs by eliminating staffs from the retail process unadvisable. 2. Fierce Competition: It is unavoidable that there are many strong domestic rivals in a highly potential retail market like Japan. 3. Distribution System: Traditionally, Japan's multilayered distribution networks have notoriously made selling merchandise more expensive for retailers. Wal-Mart's desire to remove middle man and wholesalers from this network is quite challenging. These above obstacles...
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