Strategic Planning Individual Assignment
Table of Contents
“Wal-Mart takes on the world” Case overview4
1. International expansion as a critical part of Wal-Mart’s strategy5 2. Success in Canada and Latin America and why not Europe?5 3. How could the company ensure success in China and India?6 4. Transferring Wal-Mart’s business practices and culture internationally6 5. Can American success leverage International success?6
6. Early missteps when Wal-Mart began expanding internationally7 Conclusion7
Wal-Mart is a brand that is well known around the world, especially in the USA. It has gradually developed into the largest retailer in the world. Wal-Mart’s globalization efforts have been happening rapidly. But have they been successful in all aspects of their international expansion or not? This is the main thought that is going to be discussed in this essay. The questions I will be looking at are based on a case called “Wal-Mart takes on the world” from the book of International Business The Challenge of Global Competition eleventh edition – Ball, McCulloch, Geringer, Minor, and McNett. Questions are the following: 1.Why has Wal-Mart viewed international expansion as a critical part of its strategy? 2.What did Wal-Mart do to enable the company to achieve success in Canada and Latin America? Why did Wal-Mart fail to achieve similar success in Europe? 3.What should Wal-Mart do - or not do – to help ensure that the company achieves success in China and India? 4.How will Wal-Mart’s business practices and culture transfer internationally? 5.Can the company leverage its success in the American market to ensure success in the international marketplace? 6.Finally I will discuss some of the early missteps Wal-Mart experienced when the company began expanding internationally. Before answering these questions I will explain a little bit about Wal-Mart and what the case “Wal-Mart takes on the world” is about. Then finally I will give my conclusion.
“Wal-Mart takes on the world” Case overview
Wal-Mart began in the USA in the state of Arkansas. It was founded by Sam Walton in 1962. After the 1980’s Wal-Mart quickly became the largest retailer in the world, defeating its competitors Wal-Mart now has control of the U.S. retail industry. Globalization was naturally the next step because of limits to growth in its own marketplace. Thus Wal-Mart is looking outside the box for opportunities. Globalization efforts happened quickly despite the fact that many people were skeptical about Wal-Mart’s opportunities in the international marketplace. In the year 2006 over 40% of Wal-Mart’s stores were internationally located. Wal-Mart decided to target emerging markets as the starting point for international expansion in Europe, nations with growing populations in Latin America, and in Asia is targeted China. The first international store was opened in Mexico City in the year 1991. By forming a joint venture with the Mexican retail conglomerate, Cifra, Wal-Mart was able to overcome cultural differences. After some experience with Mexican partners Wal-Mart succeeded to expand further in Mexico, and entered Brazil and Argentina. In 1998 Wal-Mart became one of the first international retailers in China. After many frustrations and difficulties Wal-Mart became the 20th largest retailer in China at the end of 2005, with 59 stores. In the year 2006 the company outbid its largest competitor in China and acquired Trust-Mart, a chain of over 100 super centers located in 20 cities in China. This acquisition made Wal-Mart the largest network of food and department stores in China. Canada was entered in 1994 by the acquisition of 122 Woolco stores. Wal-Mart quickly transformed the Canadian stores to profitable operations. After two years the Wal-Mart started making profit in Canada. In Europe however Wal-Mart did not manage to succeed as well as planned. The...