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Wall Mart Gobal Strategy Essay

931 words - 4 pages

In 1991 Wal-Mart decided to expand globally due to the fact that Wal-Mart started to face bounds to growth in its domestic market and literally has been forced to quest for international opportunities. According to David Glass Wal-Mart CEO instead of waiting for companies to start to come to the US market and increase the competitive pressure at home, expanding internationally will assist in safeguarding Wal-Mart domestic position dominance. Specifically, international expansion will keep prospective competitors in their home markets rather than to quest the US market.
Mexico was the focus of Wal-Mart first expansion effort for a number of reasons. First, it was geographically interesting ...view middle of the document...

Wal-mart bought out Cifra, and in 2000 changed its name to Wal-Mart de Mexico.

When Wal-Mart decided to go global early 1990’s, Wal-Mart concentrated on Canada and Latin America. It started with Mexico in 1991 through a 50-50 joint venture with Cifra, and in 1994 Wal-Mart entered the Canadian market via acquiring 122 Woolco Stored form Woolworth. Wal-Mart decision to enter Argentina and Brazil was based on high growth rates of the Latin American markets. On May 9, 1994 Wal-Mart decided to invest heavily in Brazil, through a partnership with Lojas Americanas, Brazil’s leading department store chain whereas Wal-Mart will own a controlling 60% of the Brazilian joint venture. In Argentina, however, Wal-Mart decided to go alone.

The success of Wal-Mart in Canada and Latin America was due to a number of reasons. Firstly, Wal-Mart entered Canada 1994 the same year as NAFTA the North American Free Trade Agreement (NAFTA) which made it easier for US companies to enter these markets. Secondly, Canada and America share the same borders as result consumers were already acquainted with Wal-Mart; consequently they share the same cultural markets. Wal –Mart already had brand awareness and by carrying everyday low prices to the marketplace, brand acceptance and consumer loyalty will flow logically. Thirdly, from the very beginning, Wal-Mart changed the product mix that it carried in its Canadian stores; hockey equipment was prominently featured in stores. In addition, to cater to the to the large Muslim community in Toronto, Wal-Mart carried “hallal” foods. Through applying such business strategies and practices Wal-Mart operations in Canada became profitable after two years. In Latin America Wal-Mart succeeded because the emphasis was on customer service and...

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