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? Wal-Mart cannot translate its merchandising strategy wholesale to just any country. It has to be willing to adapt its strategy to the local culture and the local buying patterns, etc. For example, where Wal-Mart was successful (China and Mexico), it adapted to meet the needs of the local shopper. In Mexico, Wal-Mart hired local managers to help it find ways to adapt to the local culture and to better meet the needs of local shoppers, it provided smaller stores that people could walk that were stocked with more fresh produce. In China, Wal-Mart redesigned meat packaging and offered live fish that the buyer could net and take home for dinner that day. This practice made Wal-Mart more appealing to the Chinese shopper because they prefer fresh meat and fish. In the countries in which Wal-Mart failed (Germany and South Korea), it failed to adjust its discount strategy that had previously worked but did not appeal to the local shoppers. The shoppers in Germany and South Korea preferred to shop at rival stores that stocked higher quality merchandise. Potentially Wal-Mart might have succeeded in these countries had it been willing to stock some higher quality merchandise; however, this would be counter to the strategy that has proved to be so successful for the company otherwise.
2. Why do you think Wal-Mart was successful in Mexico?
Wal-Mart was successful in Mexico is because it was willing to move in cautiously, adapt to the preferences of local buyers, and partner with local retailer, Cifra. Wal-Mart adeptly uncovered that having large stores that sold large packaged products would not be successful in Mexico. People there wanted to be able to walk to stores. Wal-Mart adapted to cultural issues by hiring local managers who understood the buyer. Wal-Mart then slowly worked to change...
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