This website uses cookies to ensure you have the best experience. Learn more

Walmart Case Study

4844 words - 20 pages

Table of Contents


Executive Summary
Walmart Company is currently the world’s largest retailer, and has aggressively entered into the international market since year 1991. Its global operations spanning across 15 countries is attributed to its effective employment of international business strategy.

Its early global expansion strategy into Mexico and Canada is characterised by entering into regions that are geographically closest and culturally most similar. This strategic move allowed Walmart to fully utilise its existing financial and managerial resources to tap into new markets, whilst mitigating risks if the operations fail abroad. Its subsequent expansion into ...view middle of the document...

However, its subsequent expansion to countries such as Germany, South Korea and Japan was unsuccessful due to cultural differences that worked against the Walmart’s model. These problems stemmed from issues related to cultural, consumer’s shopping patterns and political and legal systems. The aforementioned combined factors play a vital role when it comes to determining a company’s success and performance. Walmart’s global expansion reveals many lessons which will further be analysed in the following sections of the report. Lastly, Walmart’s future expansion in the BRIC (Brazil, Russia, India, China) countries will be covered.

1.0 What was Walmart’s early global expansion strategy? Why did it first choose to enter Canada and Mexico rather than expand in Europe and Asia?
1.1 Walmart’s early global expansion strategy
When Walmart started venturing beyond its large domestic markets, the company first needed to determine the appropriate mode of entry. Walmart was driven by both market-seeking as well as resource-seeking initiatives when it chose to enter the Latin America and Canada. According to WalMart Watch (2012), the three primary tactics used by Walmart prior entering a country are;
1.) Building partnerships with local businesses and organizations
2.) Working with government officials
3.) Tapping into the burgeoning middle class’s purchasing power
Besides both countries having the closest geographic proximities with Central America, the proactive reasons that lured Walmart to enter into Mexico and Canada was the creation of the North American Free Trade Agreement (NAFTA) that came into effect in year 1994. According to Ghosh (1998), NAFTA reduces US’s firm’s costs of doing business, hence allowing Walmart to gain a competitive advantage over other competitors when operating in the Canadian and Mexican market.
1.1.1 Canada
Walmart entered the Canadian market in year 1994 via an acquisition of a local retail store, Woolco (Sternquist, 1997). This was a logical move for Walmart considering that;
i) Firstly, Canada is a mature market. Setting up a greenfield operation may be unattractive, considering that adding new stores will only intensify competition within an already saturated market.
ii) Secondly, Canada’s geographic proximity with the United States allowed Walmart to exercise its cost effective logistics in Canada (Agren & Ogier, 2011). This allowed Walmart to reduce transfer costs related to transportation and corporate communication.
iii) Thirdly, Canada has significant income and cultural similarities with America. This is aligned with Sternquist (1997) who stipulated that cultural proximity is an important factor for mass retailers when operating in a foreign country.
iv) Fourthly, faced with limited managerial and financial resources, the penetration to the Canadian market meant that Walmart would face relatively little need for new learning. This is aligned with Walmart’s decision to keep...

Other Papers Like Walmart Case Study

Walmart Casestudy Essay

516 words - 3 pages Walmart Case Study Perla L. Rodriguez MT203-02 December 22, 2014   Introduction Walmart is the world’s biggest private employer as well as the world’s largest company by revenue. Walmart has established guidelines for setting the pay for employees ranging from their CEO to the store-level employees. Those guidelines however, vary widely when determining incentives for the different employees. CEO Compensation Mike Duke is the Chief

Walmart Issue Essay

2535 words - 11 pages sustainable development. Sustainable Development, 10(4), 187-196. Gillett, J. 1993. Ensuring suppliers’ environmental performance, purchasing & Supply Management ,28-30. Hassini, E., Surti, C. & Searcy, C. 2012. “A literature review and a case study of sustainable supply chains with a focus on metrics” International Journal of Production Economics 140(1): 69-82. Hill, R. C. & Bowen, P. A. 1997. Sustainable construction: principles and a framework

Ba 364 Walmart Case 1

623 words - 3 pages liked or not Walmart kept growing anyways. To change their image in positive reaction Walmart donated sum of the money to the local communities. My whole view on this case study is very turning. Personally I do not like Wal-Mart because the way they treat the employees and customers now. In the opening of this case you can see that Samuel Walton wanted Wal-Mart to reach very high with great customer service and provide merchandise with low price

Walmart Retail Analysis

2127 words - 9 pages

Walmart - Competitive Advantage

4319 words - 18 pages Walmart – Case Study Operations Management – SCH-MGMT-670 Catna, Shanmuga 9/24/2014 Operations Management – SCH-MGMT-670 To what extent can Walmart’s competitive advantages be transferred into international spheres? Based in Bentonville, Arkansas, Walmart Stores, Inc. was founded in 1945 by Sam Walton and is now one of the largest retailers worldwide. It operates stores in a variety of formats, such as supermarkets, discount stores

Walmart: Financial Analysis

2413 words - 10 pages . As a result, the city council put forward an emergency ordinance that blocked large-scale building projects without completing a detailed study on how their actions would affect the community at-large (Is Walmart Good for America?, 2005). In addition, zoning laws have been passed in other parts of California to keep the larger merchant out. The retailer has been plagued with accusations of discrimination and harassment; it has also been

Sears and Walmart

3198 words - 13 pages CASE ANALYSIS: Sears, Roebuck and Co. vs. Wal-Mart Stores, Inc. FIN 490 Fall 2013 Group member: Nanxun An, nan3, UIN: 659073843 Luke Gu, conggu2, UIN: 652690239 Di Jin, dijin1, UIN: 652831461 Weiyi Sun, wsun23, UIN: 677661443 Question 1: RETAIL STRATEGY SEARS VS WALMART Generally speaking, the difference of retailing strategies between Sears and Wal-Mart can be divided into five aspects. * Stores and Retail Area Sears: The

Walmart China Issues

5080 words - 21 pages the home country of the company, which is considered as legal activity.   Costs of staying in expensive hotels, golfing lessons and small stops in... Saturday, April 4, 2009 CASE STUDY: Wal-Mart in China Wal-Mart Stores: Everyday Low Prices in China Summary: (Taken From Harvard's site) Although Wal-Mart, the world's largest company by revenue, was into its 9th year of operations in China, its stores were still losing money. It had

Asda Walmart Essay

1617 words - 7 pages countries. On 26 th of July 1999, it successfully acquired the UK based third biggest retail chain ASDA with its 229 stores for 11billion dollars. (OU case study for B200 TMA 07, 2005, pg.61,55,54). In this essay I will identify and examine the benefits and costs that have occurred as a result of Wal-Mart’s takeover of ASDA, however, first it will be necessary to define the term “multinational corporation” and identify the motives that may


532 words - 3 pages Wal-Mart People pursue opportunities that increase their utility. They behave in a calculated manner, analyzing costs and benefits, which allow them to allocate their money to maximize their pleasure. There are constraints, however, on a person’s budget that forces them to rationalize their purchases. Lately, these constraints have risen with the unhealthy state of the U.S. economy. The American citizens have become increasingly concerned with


798 words - 4 pages WALMART STORES NEED UNIONS Have you ever been accused of something you didn’t do while at work? Have you ever had your hours you have worked cut from your check? Situations similar to the previous questions happen all the time at Wal-Mart stores everywhere. Wal-Mart associates needs someone to help defend them. Even though organizing unions throughout Wal-Mart will cost a significant amount of money, all Wal-Mart stores should have unions

Related Essays

Walmart Case Study

2789 words - 12 pages WALMART Andrew Louis Webster University MNGT 5650 Kenneth Chapman Wal-Mart study Case#1 1. What threats and challenges is Wal-Mart currently facing? From the beginning, Walmart did not have many threats. However, not only the competition is different, several global retailers such as Target, Carrefour, Costco, and Amazon, are working hard to keep efficiency. They are trying to work together to shrink the prices difference

Walmart Case Study

659 words - 3 pages Joyce Layne Wal-Mart a Case Study Managerial Accounting February 4, 2015 ------------------------------------------------- History Walmart was originally founded by Sam Walton, who opened the first store in Rogers, Arkansas in 1962. His original vision was to bring everyday low prices to more rural areas by building large discount stores in small towns. While other competitors focused on populations greater than 500,000 this gave

Case Study Walmart

661 words - 3 pages BRIEF: Wal-Mart Store, Inc: Dominating Global Retailing 1. How does the retail structure help explain Wal-Mart’s success? * Suppliers are not allowed use middle agents to negotiate price. Wal-Mart can get lowest price and ignore price increase, even charge suppliers for delayed or missed delivery. * Customers save money for the low price on Wal-Mart merchandise. They are globally based. Data mining help the

Walmart Case Study

513 words - 3 pages After reading “Walmart: The Future Is Sustainability” I’ve learned that the giant retailer has come a long way from when the founder Sam Walton opened his first store. Although Walmart faced negative images from their stakeholders; over the years the company has increasingly demonstrated efforts to become more sustainable. For example, according to Ferrell Fraedrich in Business Ethics: Ethical Decision Making and Cases, Walmart is becoming a