Wal-Mart's Expansion to Other States and Countries
NORTH AMERICA
Wal-Mart’s first foray outside the United States was in Mexico in 1991. Although Wal-Market executives had no previous foreign experience, they recognized that there were substantial income and cultural differences in Mexico. Accordingly, the American retail giant established a 50/50 join venture with Cifra SA, Mexico’s largest retailer. Despite havig a partner, the company made a number of blunders. Among them were poorly translated signs and a merchandise assortment that including inappropriate items such as ice skates,, leaf blowers, and riding lawn mowers. To make matters worse, wal-mart’s vaunted information system would automatically re-stock merchandise that local managers had tried to close out. The Mexican stores sold American-stlyle packedge meat and vegetables, which many shoppers preferred to purchase from small neighborhood stores. Also, most Mexican suppliers shipped directly to stores rather than to retailer warehouses and distribution centers. Thus, wal-mart lacked the control that translates into low prices in the United States. As Sam Dunn, Director of administration for Wal Mart de Mexico, commented, “The key to this market is distribution. The retailer who solves that will dominate.”
One sign of Wal-Mart’s long –term commitment to Mexico was its decision in mid-1997 to convert its joint venture shares into Cifra common stock and purchase enough additional shares to have a controlling stake in the company; the new enterprise is called Wal-Mart de Mexico S.A de C.V. (Walmex). Meanwhile, Wal-Mart turned its sights further south. In 1995, the company teamed up with Lojas Americanas SA and opened five stores in Brazil; operating without a partner in Argentina, Wal-Mart opened four stores. By 2000, the company was operating 12 Supercenters in Argentina. The stores offer a staggering variety, with a typical mix of approximately 50.000 different products.
In 1994, wal -mart entered Canada by acquiring the 122-store Woolco chain. The
Wal-Mart’s first foray outside the United States was in Mexico in 1991. Although Wal-Market executives had no previous foreign experience, they recognized that there were substantial income and cultural differences in Mexico. Accordingly, the American retail giant established a 50/50 join venture with Cifra SA, Mexico’s largest retailer. Despite havig a partner, the company made a number of blunders. Among them were poorly translated signs and a merchandise assortment that including inappropriate items such as ice skates,, leaf blowers, and riding lawn mowers. To make matters worse, wal-mart’s vaunted information system would automatically re-stock merchandise that local managers had tried to close out. The Mexican stores sold American-stlyle packedge meat and vegetables, which many shoppers preferred to purchase from small neighborhood stores. Also, most Mexican suppliers shipped directly to stores rather than to retailer warehouses and distribution centers. Thus, wal-mart lacked the control that translates into low prices in the United States. As Sam Dunn, Director of administration for Wal Mart de Mexico, commented, “The key to this market is distribution. The retailer who solves that will dominate.”
One sign of Wal-Mart’s long –term commitment to Mexico was its decision in mid-1997 to convert its joint venture shares into Cifra common stock and purchase enough additional shares to have a controlling stake in the company; the new enterprise is called Wal-Mart de Mexico S.A de C.V. (Walmex). Meanwhile, Wal-Mart turned its sights further south. In 1995, the company teamed up with Lojas Americanas SA and opened five stores in Brazil; operating without a partner in Argentina, Wal-Mart opened four stores. By 2000, the company was operating 12 Supercenters in Argentina. The stores offer a staggering variety, with a typical mix of approximately 50.000 different products.
In 1994, wal -mart entered Canada by acquiring the 122-store Woolco chain. The