Wal-mart foreign expansion
Wal-mart is the world’s largest retailer. The company employs some 1.8million people,operates3,900 stores in the united states and 2,700 in the rest of the world, and generated sales of $345 billion in the fiscal year ending january31,2007. some $77billion of these sales wrer generated in 15 nations out side of the united states. Facing a slowdown in growth in the united states, wal-mart began its international expansion in the early 1900s when it entered mexico, teaming up in a joint venture with cifra, mexico’s largest retailer, to open series of super-centers that sell both groceris and general merchandise. Initially the retailer hit some headwinds in mexico. It quickly discovered that shopping habits wewe different. Most people prefered to buy fresh produce at local stores, particularly items like meat, tortillas , and pan dulce, which didn’t keep well overnight. Many consumers also lacked cars, and did not buy in large volumes as in the united states. Wal-mart adjusted its strategy to meet the local conditions, hiring local managers who understood mexican culture, letting those managers control merchandising strategy, building smaller stores that people could walk to, and offering more fresh produce, at the same time, the company beliveed that it could gradually change the shopping culture in mexico, educating consumers by showing them the benefits of its american merchandising culture. After all, wal-mart’s managers reasoned, people once shopped at small stores in the united states, but starting in the 1950s they increasingly gravidistribution systems in mexico, wal-mart was able to lower its own costes, which it passed on to mexico’s largest retailer, and the country is widely considered to be the company's most successful foreign venture.
Please join StudyMode to read the full document