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Wal Mart's Globalization Efforts Essay

1652 words - 7 pages

Wal-Mart's Globalization Efforts
Over the years Wal-Mart has grown by leaps and bounds. Their presents has now been seen in "thirteen international markets" (Ball, Donald A.; Geringer, J. Michael; Minor, Michael S.; McNett, Jeanne M. 395). They began in Mexico, in 1991. From there they moved into Canada (1994), Hong Kong (1994), Brazil (1995), Argentina (1995), China (1996), Indonesia (1996), Germany (1998), South Korea (1998), the United Kingdom (1999), Japan (2002), Guatemala (2005), El Salvador (2005), Honduras (2005), Nicaragua (2005), Costa Rica (2005) and India (2007). Although they were not successful in every market, Wal-Mart is looking towards the future and the possibility of ...view middle of the document...

They chose to enter into a joint venture with a Thai partner instead of one from Hong Kong. They also had location issues. "…They didn't factor in how customers would get to the stores" (Mahajan-Bansal).
Wal-Mart "built three units in Argentina and five in Brazil" (Wal-Mart Corporate). They entered the market by greenfield stores and then acquisitions. In Brazil, they initially made mistakes with the product mix and had strong competition. "Established competitors have greater scale and stronger relationships with local suppliers, which sometimes allow them to buy fresh groceries and regional food brands at lower prices" (Bustillo). However, they found a way to overcome these issues to become the "third largest retailer in Brazil" (Brazil Fact Sheet).
In Argentina, "they entered in 1995 by setting up 100%-owned greenfield stores" (Mahajan-Bansal). Stores were both small in size and in numbers. As of July 31, 2011, Wal-Mart had a total of sixty-six retail stores in Argentina (Argentina Fact Sheet). Wal-Mart is the number three retailer in Argentina, but "Argentina hasn't been a high priority market for Wal-Mart (Mahajan-Bansal).
"In 1996, Wal-Mart entered China through a joint-venture agreement" (Wal-Mart Corporate). It was "one of the first international retailers in China" (Ball, Donald A.; Geringer, J. Michael; Minor, Michael S.; McNett, Jeanne M. 396). Joining with partners who had political clout was just the boost that Wal-Mart needed to have a chance at success in China. Wal-Mart had to learn more about the culture to figure out what items would sell best there. Local products were mostly offered at the request of the local government. As of 2006 Wal-Mart had the "largest network of food and department stores in China" (Ball, Donald A.; Geringer, J. Michael; Minor, Michael S.; McNett, Jeanne M. 397).
Also in 1996, Wal-Mart made an appearance in Indonesia. However, there presence there was not as a store owner, rather a partner with no financial obligation. This was made possible through an agreement with Suharto, the then president of Indonesia. The failure of the store there had nothing to do with Wal-Mart's product mix or location. The store was burned to the ground during a riot. This caused Wal-Mart to leave only two short years after opening(Rowell).
"In Europe, Wal-Mart entered Germany by acquiring the 21-unit Wertkauf hypermarket chain in 1998 and 74 Interspar stores in 1999" (Ball, Donald A.; Geringer, J. Michael; Minor, Michael S.; McNett, Jeanne M. 397). Although they acquired established companies quickly, the acquisitions happened faster than staffing could. For this reason, many management positions will filled by Americans.
Cultural differences played a part in the issues Wal-Mart had in Germany. "German customers, used to bagging their own goods, did not respond well to American practices such as clerks who bagged purchases" (Ball, Donald A.; Geringer, J. Michael;...

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