Wal-Mart's Foreign Expansion
Brief Summary of the Case:
The case explores the expansion of the world’s largest retailer, Wal-Mart, internationally. Wal-Mart began its international expansion in the early 1990s in an effort to continue its growth. The company began with a joint venture in Mexio. Initially, the company tried to implement strategies similar to those that had proved so successful in the United States, however Wal-Mart quickly realized that to succeed, it would have to adapt to local demands. The company hired local managers who understood the Mexican culture and buying preferences, and changed its strategies accordingly. Wal-Mart continued its international ...view middle of the document...
Most often than not, it will not and that is because it is a completely new environment and culture.
2. Why do you think Wal-Mart was successful in Mexico?
Wal-Mart was successful in Mexico because they adapted their merchandising strategy to the Mexican culture by doing research on retail market in Mexico, their shopping behavior and the local cultural norm. This helped Wal-Mart learn the unique shopping behaviors of the Mexicans, which allowed them to rejuvenate their strategies accordingly. For example, Wal-Mart noticed that most of the Mexican customers did not own a car unlike most of the American customers and they found that the Mexican consumers preferred buying fresher since they usually cooked the food that day; therefore, they stocked their stores with more produce and meats. Basically, adaption is the key to survival is different environments and economies.
3. Why do you think Wal-Mart failed in South Korea and Germany? What are the differences between these countries and Mexico?
Wal-Mart failed in South Korea and Germany because they didn’t adapt to the culture as well as they did with the Mexican culture. In addition, the products that Wal-Mart offered weren’t up to the standards of South Korean and German culture. The cultures that are in countries like Germany, and South Korea have a preference of high end and higher-quality merchandise than what was offered by Wal-Mart. The low price strategy is fantastic in some cultures; however, it is gratuitous in a place to where paying more is accepted. Therefore, key difference between these countries and Mexico is that Mexico accepts the low...