Wal-Mart is a household word in the U.S., but it is quickly becoming a well-noted name in the international realm. Wal-Mart became an international company in 1991 when a Sam’s Club opened near Mexico City. In 1993, Wal-Mart International was created to oversee the growing opportunities for the company worldwide. The international area is under rapid growth and worldwide consumer acceptance. Wal-Mart has over 2,660 stores in fourteen countries and the Low Price Promise is an advertising strategy that is known in any language. Sales have topped over $62.7 billion and continue to show a marked increase in profits every year. (International Overview, page 1-3)In dealing with the international market, Wal-Mart has had to adopt several different kinds of international strategy. I will discuss the types in terms of the strategy process: analysis, formulation, strategic choice and implementation. Due to the complexities of the market, Wal-Mart uses different techniques in different parts of the world. They have been successful in capturing the globe’s attention and cash flow, but some countries have presented problems.
Wal-Mart identifies strengths, weaknesses, opportunities, and threats very effectively when looking towards expansion. The SWOT is used as a company tool in making important decisions when incorporating international strategy into their fiscal planning. Wal-Mart’s strengths include its reputation for rock bottom prices, super efficient logistics and its huge size. Its weaknesses include its failure to learn the complexities of some international markets, such as Germany and China and its large size presents a problem in countries like Ireland, where there is a cap on large businesses and corporate sprawl. They have many opportunities for expansion and Wal-Mart capitalizes on these opportunities by moving into almost every large segment of the globe. They actively recognize threats to their markets and leadership spends large amounts of time in learning what will be potential threats into countries they move into. The company studies the SWOT of their market as they move to formulate strategies and alternatives to moving into the market.
The Essay on International Financial Market
This paper will discuss the advantages and disadvantages of starting a Greenfield Production Facility in one of two places Estonia or Turkey. The paper will then conclude with my recommendation to Acme as to which foreign country is best suited for their investment. International Financial Market As a multinational enterprise that is considering establishing a Greenfield Production Facility in or ...
Their global expansion has been achieved through a combination of building new stores or moving into existing operations instead of starting from scratch or a series of acquisitions and mergers where customers want to see them. These strategy formulations have given the company excellent market penetration and positions the company for future development. Their main global or international strategy is their continued local focus on the culture of a country. They have a unique ability to transport the company’s message and effective retailing concept to each country. They make a formulated effort to adapt to local cultures and become involved in the local community. By serving each hometown in the same way, Wal-Mart makes strategic choices based on this and have realized significant growth. (International Overview, page 1)
Wal-Mart has moved into country-by-country adopting different strategies and implementing this strategy in different formats. Wal-Mart is the world’s largest retailer and continues to push its international market in the event that its U.S. market slows down. Mexico was the first testing ground for Wal-Mart International where they went in and just acquired existing stores-and that became a common theme in other countries like the UK, Germany, and Japan. The strategy of corporate take over puts the company at a great advantage-the competition is eliminated, they acquire real estate, and now have a massive presence in the target location. By taking over existing stores-Wal-mart avoids community opposition. They have made this work in Mexico, where they control over 50 % of the grocery sales in Mexico and they currently operate 608 units in this country under a variety of names.
The Term Paper on Wal Mart Company Stores One
... international locations were department store chains that Wal-Mart has bought out. Two years after entering the international market Wal-Mart International ... the profit margin up, Wal-Mart exports a great deal from these countries also. They have come ... strategies and more importantly, make plans to assist management in implementing these new developments. It is for these reasons that Wal-Mart ...
The country’s biggest three competitors have joined forces to try and fight Wal-Mart, but to no avail. Wal-Mart then moved to Puerto Rico, adopting the same strategy of taking over existing stores with equal success. The next strategic advance was made in Canada in 1994 where again their strategy and implementation was buying ailing Woolco stores. Wal-Mart now operates successfully over 200 stores and now the Sam’s Club concept was brought to Canada. In 1998, another big move was made into Germany. This country presented a big problem to Wal-Mart where the chain really failed to understand Germany’s retail culture and the stiffer competition of other hyper retailers. In 1999, their losses here were almost $200 million; they were in trouble with unions and the German Cartel Office for pricing to low. The strategy of taking over existing stores did not work here as major shareholders refused to sell. (Third World traveler, page 4-5)
This German experience did not prevent them from moving into another large market-the UK. The strategy remained the same, to buy an established competitor. In the UK, Wal-Mart merged with Asda and together they have forged over 259 stores across the UK. Asda was part of the local culture and with Wal-Mart made them a very popular choice in the UK. In Asia, the company is looking for further expansion, despite setbacks in South Korea, shoppers here were not interested or impressed with the company and many felt that bad locations were picked, prices were too high and poor selection of merchandise was being offered. Despite problems in Korea, they moved on in Asia, Wal-Mart in 2002 agreed to purchase 6.1% of Seiyu, a large Japanese retail chain. Seiyu operates 400 stores throughout Asia, and Wal-Mart is entitled to increase its ownership to 66.7% over time. (Third World Traveler, page 7)
The Term Paper on Wal Mart Stores Inc
Wal Mart Stores Inc Abstract Explores the marketing strategies employed by Wal-Mart Corporation and their efforts to compete in the "new" economy. Includes an assessment of Wal-Mart's expressed and apparent positioning and value proposition based upon internal documents, public relations statements, web page and advertising. Includes an assessment of Wal-Mart's competitive position and strategy. ...
In Brazil, Wal-Mart tries another tactic and went into partnership with Lojas Americanas, which is Brazil’s leading department store chain. Wal-Mart will own 60% in this joint venture implementation and Lojas Americanas would retain the remaining 40%. (Global Marketing Management, page 1-2)Wal-Mart use different international strategies and have been very successful in joint ventures and corporate takeovers. When they make a choice to go in alone, like in China, they have been less than successful. Wal-Mart will continue to expand globally and as Wal-Mart goes through the strategy process- they will continue to work through their SWOT and formulate different strategies based on looking at all alternatives. They will make choices based on past successes and failures in the market.
Works Cited
Rowell, Andy, “Welcome to Wal-World”, Third World Traveler October 2003. 18 August 2007 “Wal-Mart Operations in Brazil”, Global Marketing Management, 1997. 9 July 07 “International Overview”, Business Week. September 26, 2006. 9 Jul 2007
