Walmart International Expansion Essay

831 words - 4 pages

MiniCase 12.1
Question 1
Wal-Mart needed international expansion critically to remain a successful company. The main reason Wal-Mart needed to go global was because they could no longer achieve the growth needed in the US. This market was saturated. The United States represents only four percent of the world’s population, which meant Wal-Mart was missing out on ninety-six percent of the world’s potential customers. (Govindarajan, par. 7) Also, Wal-Mart needed to continue to make their US employees satisfied. With Wal-Mart’s aggressive stock purchasing programs, this meant that employee satisfaction was directly correlated to their stock prices. Walmart also realized that there were many ...view middle of the document...

First reason is that they attempted to grow at a rate they could not sustain. By purchasing too many stores, Wal-Mart over extended themselves. They had to put American’s in many open management positions instead of hiring native employees. This proved to cause problems for Wal-Mart as Europe was not as adaptable to American culture as Latin America. It also posed a huge language barrier as many of the American managers did not speak the native languages. Another problem Wal-Mart faced was many challenges in the European market. The Wal-Mart philosophy of “always low prices” and “open late” caused a lot of contention. The German government required Wal-Mart to raise prices to avoid starting price wars with competitors. They also would not allow the stores to remain open past 8pm on weekdays and 4pm on Saturday, closed on Sunday. Wal-Mart tried to open their stores at 7am to counter this, however they were quickly shut down. In the end, too many cultural and sociological differenced caused Wal-Mart to eventually exit this market.
Question 3
Wal- mart’s strategy in China is to “go native” adapt to the local Chinese market. In the United States we like our food all wrapped up and compact. The Chinese want the freshest food as in it can still be moving. When Wal-mart opens stores in a new city they send teams that arrive 5 months earlier and research local consumption habits and confirm store merchandise. Wal- mart also has been working with universities and the...

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